Friday, 25 November, 2011Pages: 8 profit.com.pk

ISLAMABAD

AMER SIAL

Government’S plan to im-pose a massive levy of rs140per mmBtU on compressednatural gas (CnG) will bring

its price closer to petroleum productsand pave the way for profitable opera-tions of state owned enterprises in theLiquefied Petroleum Gas (LPG) busi-ness, an official source said.

Government had already directedstate owned entities involved in oil andgas sector to start their own LPG produc-tion and marketing businesses to curbprivate sector cartelisation in the sector.State owned Sui Southern Gas CompanyLimited (SSGCL) has already purchasedLPG import terminal of a private sector

company. Source said intention of gov-ernment is to increase CnG prices to im-ported LPG price level, so that stateowned entities could operate profitabilitywithout any threat of losses. reports ofstanding committee on finance on gas in-frastructure development cess bill 2011and petroleum levy amendment bill 2011have already submitted to the house. Gov-ernment plans to pass these two bills dur-ing current session.

CnG is the most preferred alternatefuel in motor vehicles in Pakistan, follow-ing unprecedented hike in petroleumproducts globally. Share of gas in energymix has increased to 50 per cent duringlast few years as industrial sector wasusing gas for power generation. CnG sec-tor uses only 7 per cent share in total gassupply of 4 bcfd while general industries

utilise 29 per cent share. Pakistan is facedwith a gas shortfall of 2 bcfd.

Chairman All Pakistan CnG Associ-ation (APCnGA) Ghiyas AbdullahParacha said they would be left with nooption other than to move to court as thelevy would affect their business. He saidthe sector was already in trouble as theywere operating their gas stations for 15days in a month. “there is no logic forthe imposition of levy.”

Paracha appealed to parliamentariansthat they should not approve impositionof levy on CnG sector as it will lead to anincrease of rs8 per kg in retail price. Hewarned that if load shedding was not re-duced they would seek public support topressurise government.

He said imposition of levy will rendernull and void all previous decisions of

eCC in which CnG pricing formulas wasapproved and hence new formula willhave to be decided. He said gas load-shed-ding, low gas pressure, higher utility billsand overall inflation has already de-stroyed CnG industry and this new in-crease will push them towards totaldestruction. He said Petroleum ministrywas employing levy to force CnG stationsto convert to LPG. more than 3.5 millionvehicles ply on CnG that help in an an-nual saving of $2.6 billion by decline ofpetroleum imports by 3.8 billion litres perannum. APCnGA estimates that two daysgas load shedding in Punjab alone causesan additional burden of rs42 billion perannum on people. CnG sector is the onlysector that pays highest gas tariff and con-tributes rs27.1 billion in advance GStand rs5.1 billion in advance income tax.

Imposition of CNG levy to pave way for LPG businesses

g Auto sector now employs 192,000 people directly g Employment in car industry hovers between 5,500-6,000 persons

g APCNGA plans to move court against levy g Rs8 per kg price increase in CNG expected

Global cotton prices toremain firm on China’sprocurement plan

KARACHI

STAFF REPORT

AFter witnessing a slump in earlypart of the year, cotton prices seemto have stabilised in recent

months, said market observers. this isdespite re-emergence of global economicslowdown, credit crunch situation inChina and surplus global cottoninventories (approximately 9.8 millionbales), they added. “Contributing factorsto prices stability are China’s reserveprogramme for cotton procurement andexpected switch from cotton to highyielding soybeans and corn crops,” viewedFurqan Punjani of topline Securities.overall, the analyst said, lint prices duringlast couple of months had remained inrange of $0.9-1.10/lb and same trend wasexpected to prevail in next couple ofmonths. Being hurt by inventory losses bycarrying high priced cotton lint, outgoingquarter was one of the toughest for localspinners, he said. Stabilisation incommodity prices during ongoing quarterhas reduced risk of another round ofinventory losses, thus normalising grossmargins scenario. though lately monetarytightening has become a major concern forentire industrial sector in China, but dueto promising export pattern of textileindustry demand for the crop seemsstable. this is evident from the fact thatgovernment of China has shown aconsideration to build up their depletedinventories only a few cents below currentprice levels. With cotton consumption inChina expected to remain firm at 45.5million bales (39 per cent of globalconsumption) cotton lint prices areanticipated to stand firm in upcomingmonths. moreover, change in supply sidedynamics as farmers have started to ratesoybeans and corn crop over cotton fornext sowing season in China would alsostand as a major prices supporter in longrun. Unexpected slow down in volumetricsales in both exports and local marketsduring FY11 on account of record (post UScivil war) cotton prices forced spinners tocarry forward huge inventories procuredat higher prices.

Dollar reservesshrink to $16.9b

KARACHI

STAFF REPORT

CoUntrY’S liquid foreignexchange reserves contracted to$16.961 billion during the week

that ended on the 18th of this month, theState Bank reported. this shows adecrease of 0.4 per cent or $70 millionwhen compared with 11th november ofthe preceding week. then, central bankhad stated that the country held $17.031billion. Before that (up to 4th november)the country’s dollar reserves had shrunkto $17.028 billion. the week underreview saw State Bank possessing$13.202 billion, down $67 million fromits previous week’s holdings of $13.269billion. the previous week bank’sforieign exchnage reserves had stood at$13.280 billion. Commercial banks wereno exception as they also had theirreserves slightly downing, by $4 million,to $3,758.9 million compared to $3.762billion of last week. SBP chiefspokesman Syed Wasimmudinattributes such ups and downs inforeign exchange reserves to growth inbanks’ deposits and withdrawals androutine debt repayments.

ISLAMABAD

JALALUDDIN RUMI

Government will supportmanufacturing of a low-cost,energy-efficient and spaciousindigenous car which will cost

almost three-fourths of other cars inPakistan with same specifications. engi-neering Development Board (eDB)should facilitate and support industry inmanufacturing a hundred per cent in-digenous car which can be termed as atruly national car and which should be-come a symbol of quality in the world ofauto engineering, said Federal SecretaryIndustries Aziz Ahmad Bilour.

Automotive industry has been an ac-tive and growing field in Pakistan for along time. However, it is still not as es-tablished to figure in prominent list oftop automotive industries. Despite sig-nificant production volumes, transfer oftechnology and localisation of vehiclecomponents remains low. most cars inthe country have dual fuel options andrun on CnG which is more affordableand cheaper than petrol in the country.

Bilour said industrialists need tobring innovation, out-of-box ideas andknowledge-based activities in manufac-turing to boost demand for Pakistaniproducts in international market. Pro-posal for conversion of existing car mod-els into bullet-proof cars was alsodiscussed. the meeting was informedthat by using latest technology, locallyassembled cars can be converted intobullet-proof cars without adding unnec-essary weight and disturbing efficiencyof the car. eDB Ceo, Aitazaz niazi pro-posed that exports of engineering goodsfrom Pakistan, which currently stand at$1.45 billion, can surge up tremendouslyif engineering companies are facilitatedand sponsored to exhibit their productsin industrial fairs world wide. engineer-ing companies are currently facing diffi-culty in exhibiting their productsinternational fairs because of financialconstraints. Bilour directed eDB to ex-plore possibility of manufacturing envi-

ronment-friendly hybrid cars which arefast becoming popular in United Stateswith a mileage of 51-53 miles per gallon.

According to ministry of industries,Pakistan produced its first vehicle in1953, at national motors Limited, estab-lished in Karachi to assemble Bedfordtrucks. Subsequently buses, light trucksand cars were assembled in the sameplant. the industry was highly regulateduntil early 1990’s. After deregulationmajor Japanese manufacturers enteredPakistan’s market thereby creating somecompetition in this sector. Assemblers ofHIno trucks, Suzuki Cars (1984),mazda trucks, toyota (1993) andHonda (1994) in particular, enteredonce deregulation was introduced. As-sembly of Daihatsu and Hyundai cars(1999) and various brands of LCvs andrange of mini-trucks commenced re-cently. Journey of auto industry in Pak-istan from 1953 to 2011 has been rough,

tough and sometime very smooth. Carindustry saw boom in 2006-2007 whensales touched a record peak of 180,834thanks to rising car financing up to 70-80 per cent by banks due to low interestrates and rising rural buying.

Since then the industry has beenstriving hard to reach same sales levelamid high interest rates and Yen appre-ciation against rupee. But high farm in-come is giving much support to car sales.Good crops this year will keep car salesbrisk despite increase in prices.

Car industry has invested over rs20billion in the last four to five years tomeet growing demand. Direct employ-ment in car industry hovers between5,500-6,000 persons.

Auto sector now employs 192,000people directly and around 1.2 millionindirectly and has rs98 billion of invest-ments and contributes rs63 billion asindirect tax in the national exchequer.

In the meeting, representatives ofnational Fertilizer marketing Limited(nFmL) proposed that their organisa-tion is preparing a Central Digital Dis-tribution System which will facilitatecustomers and government to keep atrack of fertiliser consignments andrecord of stocks. managing DirectorUtility Stores Corporation of Pakistan(USC) briefed the meeting about futureexpansion of USC in which the corpo-ration has planned to open 2000 newstores in the country. Proposal for dig-italisation of USC network by prepar-ing a management Information Systemwas also discussed. this system willimprove transparency and consider-ably reduce the operational cost of thecorporation. Department of explosivesproposed their ideas for ensuringsafety and security of life and propertyof citizens while giving clearance forsale of hazardous material.

Govt to support low-costcar manufacturing

Pakistan and the trustdeficit; first India, nowBangladesh? Page 2Govt extends tender date toNov 30 Page 8

Planning and economicgrowth Page 3

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debate02Friday, 25 November, 2011

ISMAt SABIR

on the objection of Bangladesh,european Union move togrant trade preferences, GSPplus status, to Pakistan as an

aid measure following last year floods inPakistan, has been halted. these meas-ures were to facilitate Pakistani textilesexporters to export to european market.In a recent meeting Bangladesh has ob-jected entry of eight items of the clothingsector of Pakistan to the eU market. Pak-istan was shocked over the ambigous op-position of Bangladesh in the session ofcouncil for trade in goods of Wto held onnovember 7. unilateral tariffconceSSionS: Pakistan wasexpecting the two years unilateral tariffconcession package proposed for about75 items to be exported to eU. Indiaannounced to withdraw its objection overthe facility the eU is willing to give toPakistan. earlier, India was opposingeuropean concessions to Pakistan toextend this facility. India was opposingproposal with support of vietnam andPeru. trade officials said it was likely thatPeru would also drop its reservations.

eU had announced concessions forPakistan on 75 tariff lines on September16, 2010, which were subject to the Wtowavier. But the proposal was continu-ously opposed by India in the Wto forthe last one year. It was hoped that Pak-istani exporters would get access to eUmarket but now Bangladesh entered the

arena to oppose this scheme.competing with pakiStan:World trade organisation rules saythere should be no discrimination andall trade partners must be dealt at par.therefore, eU can not take an excep-tional measure for Pakistan, i.e. the eUshould treat all Wto members impar-tially, and any member of Wto canblock the deal. Bangladesh competeswith Pakistan for textile products in theeuropean market. therefore,Bangladesh Garment manufacturersand exporters Association said that it isworried about this decision. they saidPakistan is a cotton growing countryand has an extra advantage that wouldcreate an uneven competition, if eUprovides trade benefit to Pakistan.

on the other hand, Chairman of AllPakistan textile mills Association(APtmA) said that products of the SouthAsian country, Bangladesh, are morecompetitive than ours. He said it will nothurt their share because eU is a large andopen market for products. moreover, it iscategorised as a least developed countryand enjoys quota and duty free access toeU market, unlike Pakistan. Further,Bangladesh’s cost of doing business islower as compared to Pakistan.

Pakistan qualifies for market accessto the eU on humanitarian grounds sim-ilar to Bangladesh. Pakistan was badly hitby one of the worst floods in history, be-sides bearing the brunt of terrorism.therefore, Pakistan has been given thespecial favour keeping in consideration

Pakistan’s pivotal role in the war on ter-ror and the colossal harm the economysuffered on account of floods. $23 billion bangladeShi exportS to eu: It is to be notedthat Bangladesh exported goods worthabout $23 billion to eU, in FY2011. outof the total, the share of readymade gar-ments was more than 80 per cent.Against this, Pakistan exported textileitems valuing only $2.5 billion to theeU in the same period. therefore,Bangladesh should not worry with re-gards to Pak-eU trade deal, ChairmanAPtmA said.

Bangladeshi clothing sector exportsincreased from $2 billion, a few yearsback, to $16 billion to the eU. Againstthis Pakistan’s exports to the eU were$1.5 billion only in the clothing sector ina market of $80 billion. Furthermore,this facility of cut in tariffs is only for twoyears that would give a small boost toPakistani exporters.

Bangladesh launched a petition to theWto on the issue and expressed the fearthat countries like Bangladesh would bebadly affected, if the proposed GSP facil-ity was granted in favour of Pakistan.

Pakistan sought eU GSP for 75 itemsincluded eight items in which Bangladeshhas a big share. these items includeleather goods, shoes, knitwear, jeans,home textile and readymade garments.

eU was to exempt Pakistani mainvalue added textile and leather prod-ucts exports from custom duty for thenext two years. Further, undenatured

ethyl alcohol of actual alcoholicstrength of 80 per cent was also in-cluded in the 75 items.trade potential with eu: theexemption will benefit sixty five textileproduct categories. However, bed linen,with four out of 10 eU imports in thatcategory already exported from Pakistanwould not be benefited. the list also in-cludes six items of leather goods andthree of footwear.

the list includes dried mushroomsand truffles, whole, cut, sliced, broken orin powder, cotton yarn, plain weave cot-ton fabric, woven fabrics of cotton, twillweave cotton fabric, overcoats, anoraksetc, of cotton, knitted 100 per cent, floorcloths, dish cloths, dusters and similarcleaning cloths, made up articles of tex-tile materials etc.

Lifting duties on the products wouldresult in an estimated increase of eU im-ports from Pakistan to about $150 mil-lion. According to original eU proposalannounced in october 2010 duty suspen-sions, if approved unanimously by theWto, would benefit about 900 millioneuros, $1.27 billion, to Pakistani exportsto eU and Pakistan could boost sales tothe eU by 100 million euros. the planwould not only affect mainly textile butalso ethanol exports.

Cotton and textile account for abouttwo thirds of Pakistan’s exports. exportsfrom Pakistan to eU are currently val-ued around 3.4 billion euros per annum,920 million euros of which comes fromthe 75 items.

no doubt the custom duty exemp-tion will benefit these sectors of Pak-istan but the actual beneficiaries will beeuropean countries who will get finestproducts of the world on cheapest pricethat can be sold at higher prices in theinternational markets.multi annual indicativeprogramme: Pakistan and europeanUnion (eU) signed an agreement underwhich the latter would provide euro 225million to the former under the multi an-nual Indicative Programme 2011-2013 forrural and natural resource development,education and human resource develop-ment, governance and trade develop-ment. Finance minister Dr Abdul HafeezShaikh and Dirk niebel, German Federalminister for economic Cooperation andDevelopment and Andris Piebalgs, euro-pean Commissioner for Developmentsigned the agreement. Under thearrangement, eU committed a grant ofeuro 75 million per annum for a period ofthree years for rural development andnatural resources management, euro 90million, education and human resourcedevelopment, euro 70 million, gover-nance, euro 50 million and trade devel-opment, euro 15 million. eU iscooperating with Pakistan in trade andeconomic development.

now the government should ap-proach Bangladesh to withdraw its ob-jection on Generalised System ofPreference (GSP) facility to Pakistan,before the next meeting of Wto that isscheduled on november 30.

EDwARD HADAS

AroUnD 100 BC, a roman nobleman calcu-lated that it took about 100,000 sesterces ayear to live comfortably. that was roughly200 times the amount of money a poor city

dweller needed to eke out a living. If an Americanneeded the same multiple of the subsistence incometo join the upper middle class today, the thresholdwould be $3.5 million. the United States economy hasbecome less equal lately, but it remains much moreegalitarian than the ancient roman republic.

the modern news on economic inequality is muchmore good than bad. the good news is very good. thegreatest moral problem caused by inequality – the un-equal access to the most basic economic goods, thosewhich support life – has become less severe. the por-tion of the total population that suffers from this bot-tom-inequality is probably the lowest ever in history.

true, we do not know how many ancient romanswere on the wrong side of the bottom-inequality, butstatistics for the most recent decades are encouraging.In 1970, 26 percent of the world’s population sufferedfrom , according to the Un’s Food and Agriculture or-ganisation. the proportion is now 13 percent – stillscandalously high, but the gain in food-equality is clear.nor is food an isolated example. electricity is a relativenew development, but the Soviet dream of universalelectrification has already nearly become a reality;more than 80 percent of the world’s population canplug in, according to the . Health care and sanitary liv-ing conditions are now considered basic goods – andaccess to them has become more equal. the average lifeexpectancy at birth is 65 or above in countries account-ing for roughly 80 percent of the world’s population.

the bad news is on the other end of the incomespectrum. there has been an increase in top-inequality– a widening gap between the elite and the rest – inthe United States, the UK and a few other countries.the bottom 90 percent in the United States are not ex-actly suffering; they have been on average for the lastfew decades. But the rich, especially the very rich, havebeen getting richer much faster. the top 10 percent of

earners took in 32 percent of the nation’s total incomethree decades ago. that has risen to 46 percent. theshare taken by the top 1 percent has more than dou-bled, from 8 to 18 percent, according to the . In the UK,the newly published from the High Pay Commissionpoints out that the top 0.1 percent’s portion has mul-tiplied from 1.3 to 6.5 percent.

the increase in top-inequality is bad in principle.

People are not different enough in their abilities or intheir dedication to work to justify the recent increasesin the gap between rich and relatively poor. the dam-age can be seen in practice. the commission makes agood case that top-inequality reduces social solidarity,making companies less efficient and slowing GDPgrowth. It also points out, along with the book , thatgreater top-inequality is associated with societieswhich have more health and behavior problems.Still, there are four mitigating fac-torS: First, the allocation of wealth within a society isusually best left to the collective judgement of that soci-ety. the people have not, not yet at least, definitively re-jected the widening gap between rich and poor. thatsuggests the problem is not widely perceived as grave.Second, the elite just might be able to do some good withtheir extra resources. the ancient romans offered breadand circuses and renaissance princes sponsored artists.In modern industrial societies, the financially secure elitecould be a helpful alternative to governments for cultural,social and economic initiatives. third, whatever the evilcaused by top-inequality in rich societies, it is much lesssignificant than the good news on bottom-equality. Asthe American and British masses get richer, it becomesharder to argue that they lose out in a morally significantway when the elite gain. even the poverty which causesthe social problems identified by the Spirit Level is ar-guably more spiritual and social than strictly material.

Finally, if the people do decide that the recent in-crease in top-inequality is unjust, the trend can be re-versed with much less trouble than bottom-inequality.major social changes are required to increase crop yieldsor trade in the remaining deprived parts of the world,but the rich can be curbed fairly easily in developedeconomies. Choose from the following list: shame, taxes,limits on the range of pay inside companies or incomecaps in the particularly lucrative financial sector. evenfor the very rich, the sacrifices needed to reduce inequal-ity would be mild. As Bill Gates pointed out, more moneystops meaning much after the first few millions. In hiswords, “it’s the same hamburger”. REUTERS

The two sides of inequality

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THere are instructive elements in the socalled anti capitalism movements acrossthe west. they reflect public anger over theincreasing rich-poor disparity that was ex-posed in the wake of the 2008 recession.

the main reason is that while the rich did suffer duringthe downturn, they also rebounded very strongly. Anddespite losing large sums through investments in com-modity, bond and equity markets, they have recollectedwell enough for most to record impressive increases intheir net worth. However, the same can’t be said of the

middle and lower incomegroups, who have seen theirincomes and purchasingpower suffer, while employ-ment generation has notnearly been strong enough.

Significantly, thoseprotesting this uneven in-come distribution also re-alise that the very systemwhose excesses they are

mobilising against has the capacity to restore economicbalance if used in the right manner. While the economicpendulum has been allowed to swing sharply to theright, the system has an inbuilt self-correcting mecha-nism that can remedy such income disparities. ourproblems, while also revolving around a constantlywidening have-have not cleavage, are a strikingly dif-ferent mix. We are without a credible planning processthat can provide a viable blueprint for progress. evenconstitutionally mandated institutions like the planningcommission have been destroyed.

Without an institutional planning mechanism,were continue to tread along without a credible long-term vision, which invariably means short-term deci-sion-making is reactionary and ad hoc, failing toaddress structural weaknesses. therefore our eco-nomic, social and security outlook remains compro-mised. It bears noting that even during our recent

decade of growth, disparities were seen sharply in-creasing with the rich getting phenomenally richerwhile poverty could not be addressed meaningfully.

Going forward, we need to channel debate towardsadopting a near and long term vision in keeping withour particular economic demographics. Yet relevantquarters are without necessary capacity to identify andpursue planned goals. our mainstream political partiesno longer develop think tanks and strategic structureswithin themselves. they continue to be dominated byindividuals and there seems little effort to alter a statusquo that has survived and thrived over the years.

our present dilemma is that not only does the po-litical system not address the economy’s most pressingissues, there is also no political will at the highest level.And without proactive institutional planning, our per-formance will remain haphazard. Already we havelagged far behind regional economies as Asia’s higher-yielding emerging markets lead the international effortto bottom out of the recession.

not only have we failed to posture towards ad-dressing our structural problems as a nation, there isalso no individual will, be it at the social or politicallevel. In such circumstances, we cannot possibly hopeto grow beyond a sub-optimal 3-4 per cent of GDP an-nually, which is not nearly enough to arrest our unem-ployment levels. this means the economy cannotaccommodate the six odd million entrants in the jobmarket every year. this will bring its own negative so-cial spillover, wasting the population dividend due tolack of proper planning.

Without achieving higher growth, we will be lefteven further behind in the comity of nations. Accordingto recent research, our per capita income is projectedto grow to $8,500 by the year 2050, while India’s is ex-pected to balloon to $42,000, magnifying the impor-tance of setting our house in order. With such abysmalgrowth while contemporaries leapfrog ahead, oureconomy, social structure, and especially the strategicsecurity position will come under immense strain. notonly will we be caught in a low growth cycle, our im-mediate security will also be compromised.

Like those demanding a fairer distribution of re-sources and income in the west, we must also demandour power centres to develop a planning mechanismthat will deliver greater fruits to the middle and lowerincome groups. When their participation in the eco-nomic process increases, investment, saving, spendingand job creation also benefit.

The writer is a former finance minister

The stock market has beenunderstandably edgy the pastcouple of days as the state bankmulls another rate cut,mimicking the regional growth-

first mantra, even as critics warn of addedpressure on the fiscal deficit. It’s hard todisagree with stakeholders stressing thefutility of such exercises so long as thegovernment is unable to cure its addictionto daily debt, crowding out the privatesector from the money market andcompromising a promising opportunity tostimulate investment, employment andconsumer activity.

Also, what might suit thai, malaysianand Australian economies might notnecessarily prove the elixir of life for ours.In none of these economies is the centre’sfiscal position so unnecessarilycompromised as ours. In none doesincorporating an easier monetary outlookfail to impress the private sector. In not oneof these examples is the government’sposition so ridiculously large in the money

market. And no other capital lets thegovernment willingly feed hemorrhagingstate enterprises and make up by borrowingfrom banks. the interest rate is not just aboardroom decision. It turns the tap, eitherway, on a host of inter-related factors, andno part of the cycle functions in isolation.

those with sound memory willremember how ineffective monetary policyproved all the while the number was jackedup, resulting in an inability to controlinflation even as private sector participationnearly ground to a halt. Disrespecting marketdynamics on the way down will onlyexacerbate the problem. If increased liquidityis not quickly channeled into productiveinvestment that engineers the second-roundmultiplier, it will feed into cost pushinflation, choking middle and lower incomegroups already squeezed by rigid wages andan inhospitable jobs market. the centralbank is playing a dangerous game. It’s farmore prudent to create the environmentwhere toggling the interest rate is likely tohave on-ground results.

SBP cut – a

double-edged sword

Without institutionalplanning, the economywill remain trapped insub-optimal growth

Planning andeconomic growth

Shaukat Tarin

South Asia�s whispering enemies

member of South Asian Association forregional Cooperation met last week inmaldives for their 17th annual summit.It is pretty evident that India has thehegemony in the South Asian regionwhich is why all the meetings and coop-eration between the countries remainfruitless. We are well aware of the factthat the main driving forces in the re-gion are Pakistan and India and untiland unless the relationship betweenboth the countries does not improve, thecooperation at the region level cannot beattained. even though, the bilateral rela-tions have warmed slightly over a fewmonths, but the decades long rivalry stillpersists to be a hurdle for SAArC.

ALI RAzA

kARAchI

European debt crisis

With Italy following Greece and Portu-gal into the quagmire of debt crisis,the fact that China is now being toutedas their saviour makes it an interestinglittle situation. However, reading eu-ropean press, the most bizarre thingthat I found was that the europeanswanted to dictate how China shouldproceed in trying to bail out europe.this clamour has also been echoed byUnited States of America that is notbeing able to swallow the pill thatChina is now the top dog in the globaleconomic matters. europeans are in amess and it seems as if only China canhelp, they should let the global dynam-ics do the talking if they want to es-cape the situation.

BILAL SHEIKH

LAhORE

E D I T O R I A L

Debt, corruption and Islamic banking

In last week’s column, I suggested thata political party like Pakistan tehrik-e-Insaf should adopt the promotionand implementation of Islamic bank-ing as part of its election manifesto.

While Imran Khan may not seem like someoneinterested in Islamic banking and finance, it (Is-lamic banking and finance) at times attracts in-terest from the least expected individuals andinstitutions. Until recently, I used to deliver aone-day training course in Islamic banking andfinance at the London-based Chartered Instituteof Securities and Investment. on one such train-

ing, I met two individuals from the London met-ropolitan Police. on my inquiring, they in-formed me that they belonged to the financialcrime branch and were interested to learn aboutIslamic banking and finance to see if it waslinked to financing of terrorism or any other fi-nancial crime such as money laundering. Priorto this I didn't expect police to be interested inIslamic banking and finance. today, Islamicbanking practitioners come from all ethnic back-grounds (from Americans to the Chinese), na-tionalities (from ethiopian to South Korean),and from all faith groups (from Jews to Hindus).

I would not be surprised if tomorrowImran Khan decided to embrace Islamic bank-ing and finance, perhaps not for his love forIslam or Islamists but certainly because of thepotential contribution that Islamic banking andfinance can make to the cause of national debtstrategy and elimination of corruption from thePakistani economy. Islamic banking and fi-nance, being asset-based, should in principlebe less prone to financial crime, but it would befair to assert that it is no more or less vulnera-

ble to abuse by those who look for weaknessesin a financial system to exploit in their favour.However, because Islamic financing is alwaysprovided for doing business or trading, it is rel-atively difficult for the recipients of Islamicfunds to "run away" with the money. In inter-national transactions, if equity-based tools ofIslamic finance are used to bring foreign capitalinto Pakistan, technically the new injection offoreign capital into the country will not lead toan increase in national debt. even in the caseof the government using sukuk for raising debt-based shari'a compliant capital, the financingwill always be tightly linked to an already exit-ing asset or will be used for creating new assets.

this close proximity with the assets beingfinanced makes Islamic banking and financeless prone to corruption. For large transactions,almost always there exists a double due dili-gence phenomenon (as part of regular bankingpractices but also an oversight function by theShari'a supervisory board).

there are some industry observers whoargue that Islamic financial transactions are

more prone to abuse,given that they are morecomplex. For example,sukuk (a Shari'a compliantequivalent of a bond)structures normally relyon a number of offshore companies (called spe-cial purpose vehicles or SPvs), which can po-tentially be used for tax evasion and similarkinds of financial crime. After all, the famousenron debacle resulted from a complex nexusof SPvs that the company used before it even-tually collapsed. While it is true that sukuk-typestructures tend to be more complex than con-ventional bonds, it is primarily because of thelack of legal infrastructure in a number of coun-tries where sukuk have in the past been issued.malaysia provides a good example of a countrythat has developed a comprehensive frameworkfor the issuance of sukuk. therefore, theresukuk structures tend to be less complicatedand consequently less prone to dispute, corrup-tion and fraud. there is a need to study thatmodel for the further development of an Islamic

capital market in Pakistan.once a transparent Islamiccapital market is devel-oped, fears of misuse andabuse of Islamic financialstructures will diminish. It

is important that the government develops acomprehensive plan to privatise the existingbanks and financial institutions only throughtheir conversion to Islamic financial institu-tions. the likes of Abu Dhabi Islamic Bank andmany Qatari banks and financial institutionsare looking for shopping opportunities out oftheir respective jurisdictions. Creating an up-beat environment in favour of Islamic bankingin Pakistan will certainly attract their attention.Bringing an international class of new investorsinto Islamic banking in Pakistan will also easeout corrupt practices in the banking sector, bymaking such institutions less exposed.

The writer is a Shari’a advisor tobanks and financial institutions and can becontacted at humayon@humayondar.com

Hamayon Dar

For comments, queries and contributions, write to:

Email: profit@pakistantoday.com.pk Ph: 042-36298305-10 fax: 042-36298302 website: www.pakistantoday.com.pk

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F r i d a y, 2 5 N o v e m b e r, 2 0 1 1

I would not besurprised if Imran Khandecided to supportIslamic banking

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Friday,25 November,2011

04news

Chief Justice, Iftikhar muhammad Ch

Public exchequer must besaved and no one be givenrelaxation in this regard

KSE recovers by 95 points on

renewed interest in commodity scripsKARACHI

STAFF REPORT

tHe Karachi stocks mar-ket got rid of a days-long bearish trend on

thursday that saw the benach-mark 100-share index gaining95.44 points. the market ob-servers attribute the recovery inthe oversold market to the in-vestors’ renewed interest incommodity scrips.

“Stocks showed recovery inoversold market on renewed in-terest in commodity scrips,”viewed Ahsan mehanti, a directorat Arif Habib Investments.

the day saw the KSe 100-share index recovering to11,729.41 points as compared to11,633.97 points of the previousday. the intraday high and lowstood, respectively, at 11,755.15and 11,571.74 points.

the trading volumes alsorose by 17 million shares andwere recorded at the ready-

counter at 50.796 million sharesagainst Wednesday’s 33.656 mil-lion. the turnover had dipped toa record low of 28 million duringtwo trading days. the tradingvalue also gained some face andjumped to rs2.5 billion againstrs1.2 billion of the previous day.the market capitalisation slightlyincreased and was counted atrs3.052 trillion compared tors3.02 trillion a day earlier. Intotal 321 scrips were traded, ofwhich 129 gained, 103 lost and89 remained unchanged. “Senti-ment remained bullish led by oiland fertliser scrips,” mehanti

said adding that “(the investors’)expectations loomed over possi-ble gas reserves discoveries inZin block of the oGDC.”

Bank Al-Falah appeared asa volume leader on the day andcounted its traded shares at8.073 million at the highest pershare rate of rs12.05. thebank’s share price set in thegreen zone by upping tors11.99 after opening atrs11.95. other top 10 best per-formers included Fauji Fer-tiliser Bin Qasim, JahangirSiddiqui Company, Azgardnine, Fauji Fertiliser XD, Fa-

tima Fertiliser Company, engroCorporation, Lotte PakPtA, oiland Gas and Arif Habib Com-pany SD. these scrips recordedtheir traded shares at 5.8 mil-lion, 3.4 million, 3.3 million,3.3 million, 3.0 million, 1.7 mil-lion, 1.5 million, 1.4 million and1.3 million, respectively.

According to analysts, the daywitnessed thin activity as the in-vestors remained cautious afterglobal commodities and stockscontinued thursday to fall on un-certain growth prospects in theworld’s economic centers namelyeurope, United States and China.

“Strong valuations in Pak-istan oil and Gas sector, resump-tion of gas supply to fertiliserproducers and positive expecta-tions for banking sector earningsoutlook played a catalyst role inpositive close at KSe,” said Ahsanmehanti. on the future market,the turnover climbed to 8.167 mil-lion against 6.429 million of theprevious day. the futures scripsthat were rated as plus numbered106, whereas minus scrips num-bered 33 and 1 remained un-changed. FFBL-nov was volumeleader of the day with 1.022 mil-lion of its shares traded.

Indian HC vows to address MFN concernsLAHORE

STAFF REPORT

InDIAn high commis-sioner in Pakistan SharatSabharwal has said thatbusiness community’sconcerns regarding mFn

to India will be addressed fully. Inthis regard a team of Indian expertsis visiting Pakistan in the first quar-ter of 2012 to discuss non-tariffBarriers, he added. Indian high com-missioner was speaking at LahoreChamber of Commerce and Indus-try. LCCI President Irfan QaiserSheikh presented welcome address,while Senior vice President KashifYounis meher and vice PresidentSaeeda nazar also gave their point ofview on trade with India.

High commissioner said post-mFn agreement implications areunder active consideration amongconcerned authorities of both coun-

tries. He said customs coordinationbetween the two countries is beingworked out to sort out all customsprocedures related issues. He addedthat the bottom line for present In-dian regime is to promote trade be-tween Pakistan and India in largerinterests of people of the countries.

He said India was making effortsto resolve visa problems for Pak-istani business community and thatmultiple visas for one year will be is-sued to businessmen under visa lib-eralisation policy by the Indian highcommission. Draft of said visa policyis likely to be approved by Indiangovernment, he added. He furthersaid that at present visas are grantedunder 1974’s visa policy of India.

However, frequent travellers vis-iting under business visa are ex-empted from police reporting.

He said Pakistani business com-munity had showed a positive re-sponse for promoting trade with

India and Indian government alsomade strenuous efforts for increas-ing bilateral trade volume from $2billion to $6 billion plus. Sharat Sab-harwal pointed out that a separategate and other facilities were beingestablished at Wahgah/Atary borderfor handling of export cargo 12 hoursdaily. establishment of a separategate would also provide hurdle-freetransportation facilities at the bor-der, he added.

Sharat Sabharwal disclosed thata well-equipped check post worthrs1.5 billion had been established atPak-India border which will facilitatebilateral trade between the coun-tries. He said bilateral trade was ontop of the agenda and Indian expertswill help overcome energy crisis inPakistan. Indian and Pakistani busi-ness communities are willing to pro-mote economic and trade relationswith idea of enhancing volume of bi-lateral trade between the neighbour-

ing countries for peace and to endpoverty," he added. In his welcomeaddress, LCCI President Irfan QaiserSheikh said earliest removal of nontariff Barriers will largely consoli-date business community efforts asmost of the businessmen are notfully aware of Indian standards andquality parameters which also varyfrom city to city. Pakistani exportershave to spend a lot of time andmoney to obtain certain certifica-tions and fulfill requirements ofclearing; but still they fall short ofconforming to any particular condi-tion, he added.

He said there are numerous con-ditions for getting shipments clearedwhich include agriculture permits,phyto-sanitary certificates, Indianstandard of quality, licensing re-quirement for import of vehicles,textile specific barriers, health andsafety regulations and many more. Itis hoped that this area will be taken

care of in near future by Indian gov-ernment with special preferencegiven to Pakistan. He said it can besaid without a doubt that potentialgains from increased economic inte-gration between India and Pakistanare large. trade between the twocountries is unnaturally small andscope for gains from increased tradecorrespondingly large.

It goes without saying that dueto tight visa policy, bilateral trade be-tween India and Pakistan has re-mained undersized and averagesaround $1.7 billion over the past 3years through regular channels.Whereas overall volume of trade be-tween India and Pakistan through ir-regular channels like Dubai,Singapore and etc is estimated to bearound over three billion dollars perannum. According to some esti-mates, trade with India has the po-tential to be anywhere between 8 to10 billion dollars. “If trade between

Pakistan and India is liberalised thevolume of exports of these com-modities to India can take a quan-tum jump.” Similarly, there is a greatpotential for export of fish, resins,animal and vegetable fats, beverages,spirits, vinegar, leather and leathergoods, carpets, and tobacco. Simi-larly, Pakistan can import cottonseed, meat, dairy products, vegeta-bles, fruits, tea, tanning, dyeing ex-tracts, chemical products, rubberand rubber products, raw materialsand semi finished products etc.

SAArC Chamber vice Presi-dent Iftikhar Ali malik, LCCI formerPresidents Shahzada Alam monoo,mian tajammal Hussain, mianAnjum nisar, former KCCI Presi-dent Qaiser Ahmad Sheikh, formerSenior vice Presidents Abdul Basit,Sohail Lashari, former vice Presi-dents Aftab Ahmad vohra andShafqat Saeed Piracha also spokeon the occasion.

wheat price in-crease condemned

LAHORE

STAFF REPORT

PAKIStAn Flour millsAssociation (PFmA) hasstrongly criticised

government’s decision to increase wheatsupport price from rs950 to rs1,050 permaund. PFmA has warned governmentthat if rs100 increase is not withdrawn,flour millers will be compelled to launchcountrywide strike. Addressing a newsconference former PFmA Chairman Asimraza Ahmad said instead of controllingfertiliser prices, government hadincreased flour price that would onlyinflate flour prices in urban centres andhurt flour milling industry. He pointedout that profiteers were minting money,around rs700 to rs800 per bag, throughfertiliser black-marketing but nobodywas stopping their hand. He indicatedthat the country already had wheat stocksof around 10 million, of which 5.5 millionis surplus from domestic need. He saidPunjab Food Department had around 4.6million tonnes, Pakistan AgriculturalStorage and Supplies Corporation(PASSCo) had 2.5 million tonnes, SindhFood Department had 1.5 million tonnes,Khyber Pakhtoonkhwa held 0.25 milliontonnes while private sector was holding1.5 million tonnes. Asim said governmenthad made a similar mistake in the pastwhen it increased wheat support pricefrom rs600 to rs950 per maund.though famers got relief from thegovernment decision but it forced urbanmasses to buy expensive flour andnegatively affected local flour millingindustry. Local wheat products hadalready become uncompetitive ininternational market, further priceincrease would ultimately stop wheatproducts exports from Pakistan, heunderlined. He stressed that it was reallyunfortunate that Pakistan had surpluswheat stocks but it could not export dueto high price in the country. He pointedout that many countries were offeringwheat to Pakistan at $230-$260 pertonne at Karachi port, but by increasingprices government was compellingmasses to buy wheat and its products atexorbitant rates. He urged governmentto immediately withdraw its decision;otherwise flour millers would announcea countrywide protest. He further statedthat government should controlfertiliser prices to reduce prices of allgrains. responding to a question, Asimestimated that rs100 increase in wheatsupport price would increase 20-kilogram flour bag price by rs80 tors90 per bag.

sECP developsdatabases on equityand debt markets

ISLAMABAD

STAFF REPORT

SeCUrItIeS and exchangeCommission of Pakistan (SeCP) hasdeveloped various databases that

include a wide range of informationrelating to equity and corporate debtmarkets of the country. SeCP has taken thedecision in order to ensure the provision ofaccurate and timely information relating toperformance and dynamics of capitalmarket to various stakeholders. thedatabases include, information regardingequity securities for the time periodranging from as earlier as 1992 and relatesto public offerings and issue of shares. Itfurther contains information relating todebt instruments and securities including,listed and privately-placed term financecertificates, commercial papers, sukuk andsecuritised structure debt instruments.

speakers at Punjab university’sseminar apprehensive about mfNlahore: Speakers at Punjab University’s seminar on opening trade with India warned that by awarding mFn status toIndia in haste and without approval of parliament, government would endanger Pakistan’s economy, culture andtraditions. Pakistan Steel mills former Chairman General (r) muhammad Javed, Pakistan Association of AutomotiveParts Accessories manufacturers (PAAPAm) Chairman Syed nabeel Hashmi, Dean of Social and Behavioral Sciences -Punjab University Professor Dr muhammad Hafeez, Agri Forum Pakistan Chairman Ibrahim mughal and ‘together Fortomorrow’ President Dr muhamad Asim addressed the seminar. they underscored that bureaucracy was creating a bogeyof consumerism. Consumer interest was a fake argument as India still provides subsidy to its industries and any countryunder Wto providing subsidy, could not be given mFn status they proclaimed. they pointed out that India ‘officially’opened its markets for Pakistan in 1996 by granting it mFn status. However, its peculiar Pakistan specific import tariffsand trade barriers restricted Pakistani exports to very low levels, they added. “now we would open our markets for India ifwe pride it with mFn status,” said General (r) Javed adding that with our liberal import policy, Indian goods would floodour markets without corresponding increase in our exports. General (r) muhammad Javed said it is very unfortunate thatgovernment policies do not match national interest which is creating chaos and panic among masses. He urged people andmedia to play their due role in bringing positive change in the country. PAAPAm Chairman, Syed nabeel Hashmi, saidPakistani bureaucracy is making important economic decisions in haste. Commerce Secretary, Zafar mahmood, isconsoling Pakistani manufacturers by proclaiming that he will put many industries in negative list. But on the other hand,in his visit to India he said that negative list will be valid for a year only. He said government of Pakistan is makingPakistan a trading economy at the cost of revenue-generating local industries. nabeel suggested that in the first phase,trade with India should be initiated with import of raw materials, machinery and equipments, moulds and dies etc.Further, transfer of technology through Joint venture and technical Assistance Agreements should be allowed he added.this would make Pakistani auto industry competitive, he concluded. STAFF REPORT

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Friday,25 November,2011

news

CORPORATE CORNERLG establishes new hDstandard in mobile handsets

lahore: LG has come up with a new breakthroughin the form of “true HD IPS” display. true HD IPSdisplay made its world debut on the new optimusLte smartphone in Seoul, Korea, where both thephones and displays set a new standard for best-in-class resolution on a 4G connected device. the newsmartphone’s 4.5–inch true HD IPS display,developed in close collaboration with sister companyLG Display, offers advanced resolution, brightnessand clarity and shows colours in their most naturaltones. PRESS RELEASE

PACRA assigns Ifs ratingof ‘AAA’ to state Life Insurancekarachi: Pakistan Credit rating Agency(PACrA) has maintained the Insurer FinancialStrength (IFS) rating of “AAA” (triple A) to StateLife Insurance Corporation of Pakistan (SLIC).the rating denotes SLIC’s exceptionally strong

capacity to meet policyholder and contractobligations. At the same time, risk factors areconsidered minimal, and the impact of adversebusiness and economic factors is expected to beextremely small. PRESS RELEASE

microsoft launches mEAwindows Phone 7 Challenge iSlamabad: microsoft Gulf has announced thestart of an exciting competition with the officiallaunch of the meA (middle east and Africa)Windows Phone 7 Challenge. meA WindowsPhone 7 Challenge is a student technology contestwhich has been conceived to attract entries fromstudents across middle east and Africa. As part ofthe competition, contestants need to sendinnovative contest entries based on microsoftWindows Phone technologies that address thetheme: ‘Imagine a world where technology helpssolve the toughest problems’. PRESS RELEASE

samsung launchesmultiview mv800 Cameralahore: Samsung electronics Co Ltd hasrecently launched an innovative and compactdigital camera with the name of multiviewmv800. It is the perfect combination of style andease-of-use, which enables social extroverts tocapture and record all the highlights of theiractivities. this multi-view camera is available incolours like vivid red, stylish black and snow whiteand offers the best-in-class imaging technologythat ensures premium results, even for the

beginners. PRESS RELEASE

PC and marriott Karachi promotegroom packages for Amir Adnan

karachi: A memorandum of Understanding(moU) has been signed at Pearl Continental Karachi,between mr Amir Adnan, famous Fashion Designer,mr rolf r. Bauer, Director of operations, HashooGroup of Hotels, mr rehan Faiz Pirzada, executiveAssistant manager, Pearl Continental Karachi andmr mirza mansoor, General manager, Karachimarriott Hotel for promoting exclusive packages forAmir Adnan grooms. PRESS RELEASE

NEW DELhI: S Masood hashmi, President andcEO of Orientm Mccann Erickson, Pakistan withPrasoon Joshi, chairman and cEO, MccannWorldgroup India, EcD, Mccann Erickson, APAcRegion and chairperson Mccann Global creativecouncil at ADASIA 2011 held at Taj Palace, NewDelhi, India. PRESS RELEASE

I think and hope that thethinking will evolve and that theECB should play an essential roleto re-establish confidence

foreign minister france, Alain Juppe

StRASBOURG

REUTERS

FrAnCe pressed Germany onthursday to let the europeanCentral Bank act decisivelyto halt a stampede out ofeuro zone government bond

markets that has raised doubts about thesurvival of the single currency.

French Presidentnicolas Sarkozy metGerman Chancel-lor Angela merkeland new ItalianPrime ministermario monti inS t r a s b o u r g ,seeking a trade-off between eUtreaty change toimpose greaterfiscal discipline oneuro zone states,demanded by Ger-many, and more emer-gency help from thecentral bank. French offi-cials hoped Berlinwould relent inits opposi-t i o n

to a bigger crisis-fighting role for theeCB after Germany itself suffered afailed bond auction on Wednesday, high-lighting how investors are wary even ofeurope's safest haven. "there is urgency(for eCB intervention). We will talkabout it today in Strasbourg," FrenchForeign minister Alain Juppe told FranceInter radio before the crisis summit ofthe euro zone's three biggest economies

in the eastern French city. "I think andhope that the thinking will evolve

and that the eCB should play anessential role to re-establish con-fidence," Juppe said.

Sarkozy took a step towardmerkel this week by agreeingto amend the europeanUnion's treaty to permit in-trusive powers to change na-tional budgets in euro areacountries that go off the

rails. But the German leaderhas so far maintained her linethat the treaty forbids the po-

litically independent eCBfrom acting as lender of

last resort to buy gov-e r n m e n t

bonds. With contagion spreading fast,a majority of 20 leading economistspolled by reuters predicted that theeuro zone was unlikely to survive thecrisis in its current form, with someenvisaging a "core" group that wouldexclude Greece.

In signs of public resistance to aus-terity in two southern states undereU/ImF bailout programs, riot policeclashed with workers at Greece'sbiggest power producer protestingagainst a new property tax, and Por-tuguese workers staged a 24-hour gen-eral strike. Credit ratings agency Fitchdowngraded Portugal's rating to junkstatus, saying a deepening recessionmade it "much more challenging" forthe government to cut the budgetdeficit, highlighting a vicious circle fac-ing europe's debtors.

Fitch cut Portugal to BB+ from BBB-, which is still one notch higher thanmoody's rating of Ba2. S&P still ratesPortugal investment grade.

German Bund futures fell to theirlowest level in nearly a month afterWednesday's auction, in which the Ger-man debt agency found no buyers for halfof a 6 billion euro 10-year bond offeringat a record low 2.0 percent interest rate.

Bond investors are effectively onstrike, interbank lending to euro areabanks is freezing up, ever more banksare dependent on the eCB for funding,

and depositors are withdrawing in-creasing amounts from southern eu-ropean banks. A special report byFitch on Wednesday suggestedFrance had limited room left to ab-

sorb shocks to its finances, such asa new downturn in growth orsupport for banks, without en-dangering its triple-A credit

status. monti's presence inStrasbourg marked Italy'sreturn to grace in europe

after the era of scandal-plagued for-mer prime minister Silvio Berlusconi,who resigned this month. the newprime minister was expected to dis-cuss with merkel and Sarkozy the eco-nomic reforms planned by hisgovernment of technocrats.

Keeping Italy solvent and able to bor-row on capital markets is vital to the sus-tainability of the euro zone.

Wednesday's German bond auctionpushed the cost of borrowing over 10years for the bloc's paymaster abovethose for the United States for the firsttime since october.

GERMAN EXPOSURE

Finance minister Wolfgang Schaeu-ble's spokesman said the auction did notmean the government had refinancingproblems and few on financial marketsdisagreed. Some analysts said Berlin justneeded to offer a more attractive yield.

But it was a sign that, as the bloc'spaymaster, Germany may face creepingpressure as the crisis continues todeepen. one senior ratings agency officialsaid it could give Berlin cause to re-exam-ine its refusal to embrace a broader solu-tion. "It's quite telling that there has beenupward pressure on yields in Germany -it might begin to change perceptions,"David Beers of Standard & Poor's told aconference in Dublin. merkel has shownno sign of bending to calls, most notablyfrom France, to allow the eCB to act moredecisively. She has said the eU treatybars the eCB from acting as a lender oflast resort and printing money to buygovernment debt. She rejected joint "eurobonds," dismissed a proposal to mutu-alise the euro zone's debt stock, and re-buffed attempts to allow the bloc's rescuefund to borrow from the eCB or the ImF.

German economy minister Philipproesler of the Free Democratic junior

coalition partner called on thursday forparliament to jointly reject euro zonebonds "because we don't want Germaninterest rates to rise dramatically." Yet atthe same time, merkel has declared thatthe only answer to the crisis was "moreeurope" and won endorsement from herparty to press for a fully fledged euro-pean political union based around theeuro zone. With time running out forpoliticians to forge a crisis plan that isseen as credible by the markets, the eu-ropean Commission presented a study onWednesday of joint euro zone bonds as away to stabilize debt markets alongsidetougher fiscal rules for member states.

the borrowing costs of almost alleuro zone states, even those previouslyseen as safe such as France, Austria andthe netherlands, have spiked in the lasttwo weeks as panicky investors dumpedpaper no longer seen as risk-free.

"Bunds are starting to lose their ap-peal because markets have to believe theeuro bonds story and Germany is veryclose to starting, essentially, to guaranteethe debt of other countries," said Achil-leas Georgolopoulos, strategist at LloydsBank in London. the crux of an accelera-tion of the crisis in the past month wasItalian bond yields' jump to levels above7 percent widely seen as unbearable inthe long term, despite stop-go interven-tion by the eCB to buy limited quantities.

STABILITY BOND

outside the euro zone, a top Britishfinancial regulator said British banksshould make contingency plans for a po-tentially disorderly break-up of the cur-rency area, or the exit of some countries,as the sovereign debt crisis rages on.

"Good risk management means plan-ning for unlikely but severe scenarios andthis means that we must not ignore theprospect of a disorderly departure ofsome countries from the euro zone," An-drew Bailey, deputy head of the Pruden-tial Business Unit at the UK's FinancialServices Authority, told a conference.

In a reuters poll conducted over thelast 10 days, 14 out of 20 prominent aca-demics, former policymakers and inde-pendent thinkers agreed the euro zone'smake-up would change. A new "core" eurozone with fewer members received quali-fied backing from 10 economists as a pos-sible solution, with seven of them sayingGreece should be excluded from it.

Sarkozy to press Merkelon ECB after bond fiasco

kARAchI: Mr Yasin haider Rizvi – Vice PresidentTOTAL Oil Pakistan heading Lubricant BusinessSociety of Pakistan (LBSP) seminar at Sheratonon “Opportunities and challenges of Virgin andUsed Oils in Pakistan”. PRESS RELEASE

LAhORE: Director Ali Akbar Group, Saad Akbarhanding over the key to Distributor Target, ZariMarkaz. PRESS RELEASE

Profit for e-paper_Layout 1 11/24/2011 10:30 PM Page 5

top 5 perForMers sector wisesymBOL OPEN hIGh LOw CuRRENt ChANGE vOLumE symBOL OPEN hIGh LOw CuRRENt ChANGE vOLumE

Food ProducersAL-Noor Suger Mills 55.09 55.09 52.35 55.09 0.00 35Bawany Sugar 11.10 12.00 11.10 11.10 0.00 1Clover Pakistan 51.41 53.00 51.41 51.41 0.00 100Colony Sugar Mills 1.90 1.90 1.63 1.63 -0.27 14,431Crescent Sugar 12.00 13.00 12.99 12.99 0.99 771

Household GoodsAL-Abid Silk Mills 23.34 23.60 23.34 23.34 0.00 2Diamond Ind. 8.20 9.03 8.20 8.20 0.00 2Hussain Industries 3.90 3.90 3.80 3.90 0.00 6Pak Elektron Ltd. 4.20 4.40 4.20 4.25 0.05 8,650Tariq GlassXD 8.65 8.89 8.65 8.65 0.00 10

Personal GoodsAmtex Limited 1.31 1.44 1.30 1.38 0.07 26,864Artistic Denim XD 19.50 19.45 19.00 19.01 -0.49 74,958Ashfaq Textile 7.10 8.10 8.10 8.10 1.00 5,000Azam Textile 1.35 1.40 1.34 1.35 0.00 5,200Azgard Nine 3.71 3.85 3.62 3.66 -0.05 672,596

Future ContractsAHCL-DEC 29.94 29.94 29.80 29.89 -0.05 9,000AHCL-NOV 29.94 29.76 29.55 29.61 -0.33 34,500ANL-DEC 3.74 3.80 3.71 3.75 0.01 1,286,500ANL-NOV 3.74 3.80 3.65 3.65 -0.09 1,354,000ATRL-DEC 127.13 127.50 127.00 127.23 0.10 12,000

Pharma and Bio TechAbbott Laboratories 102.51 103.20 102.50 102.74 0.23 6,920Ferozsons (Lab) Ltd. 76.66 78.00 76.66 76.66 0.00 100GlaxoSmithKline Pak. 69.25 69.90 69.00 69.00 -0.25 3,312Highnoon (Lab) 29.29 29.50 28.70 29.38 0.09 3,502IBL HealthCare XD 12.78 13.29 12.80 13.18 0.40 9,773

Fixed Line TelecommunicationP.T.C.L.A 10.80 10.95 10.70 10.74 -0.06 873,286Pak Datacom LtdXD 34.50 34.50 34.00 34.50 0.00 50Telecard Limited 0.96 1.00 0.89 0.90 -0.06 179,056Wateen Telecom Ltd 1.85 2.00 1.82 1.88 0.03 2,098,153WorldCall Telecom 1.11 1.17 1.05 1.06 -0.05 74,429

ElectricityGenertech 0.36 0.42 0.32 0.32 -0.04 3,307Hub Power Co.XD 37.11 37.15 37.00 37.01 -0.10 416,249Japan Power 0.68 0.68 0.64 0.65 -0.03 164,679K.E.S.C. 1.63 1.71 1.63 1.70 0.07 232,001Kohinoor Energy 17.01 17.00 16.61 17.00 -0.01 300,022

BanksAllied Bank Ltd 62.23 62.80 62.10 62.23 0.00 216Askari Bank 10.95 11.00 10.80 10.86 -0.09 77,973B.O.Punjab 5.69 5.80 5.62 5.65 -0.04 350,983Bank Al-Falah 12.07 12.31 12.00 12.04 -0.03 5,499,424Bank AL-Habib 29.87 30.00 29.75 30.00 0.13 71,128

Non Life InsuranceAdamjee Ins 47.94 47.59 46.80 47.07 -0.87 15,293Atlas Insurance 36.49 36.49 35.27 36.49 0.00 2Century Insurance 7.23 6.80 6.36 6.51 -0.72 10,100Cres.Star Insurance 2.40 2.99 2.00 2.01 -0.39 1,123EFU General Ins 36.61 36.51 36.50 36.51 -0.10 1,713

Life InsuranceAmerican Life 14.50 14.50 13.50 14.50 0.00 2East West Life Assur 1.40 2.34 1.40 1.40 0.00 1EFU Life Assur 65.53 68.80 65.53 65.53 0.00 157

Financial ServicesAMZ Ventures A 0.35 0.33 0.25 0.25 -0.10 36,032Arif Habib Investmen 16.40 16.40 15.56 16.40 0.00 101Arif Habib Ltd. 16.03 16.29 15.96 15.97 -0.06 2,207Dawood Cap.Man XB 1.25 1.29 0.75 1.25 0.00 4Dawood Equities 1.09 1.07 0.83 0.86 -0.23 631

Equity Investment Instruments1st.Fid.Leasing Mod 1.52 1.53 1.53 1.53 0.01 2,500Allied RentalModXDXB 21.64 22.45 21.64 21.64 0.00 1Atlas Fund of Fund 5.86 5.85 5.85 5.85 -0.01 29,600B.R.R.GuardianXD 2.00 2.00 1.72 2.00 0.00 493Cres. Stand.ModXD 0.49 0.44 0.34 0.42 -0.07 69,931

MiscellaneousCentury Paper 13.14 13.38 13.00 13.02 -0.12 6,090Pak Paper Prod. 31.00 31.95 31.00 31.00 0.00 100Security Paper 36.17 36.90 35.80 36.00 -0.17 20,59Pakistan Cables 32.17 32.25 32.17 32.17 0.00 280P.N.S.C.XD 14.72 14.80 14.00 14.14 -0.58 13,152Pak.Int.Con. SD 69.00 69.89 68.01 69.00 0.00 5TRG Pakistan Ltd. 1.40 1.50 1.36 1.49 0.09 273,110Murree BreweryXDXB 69.73 71.00 68.50 69.00 -0.73 4,134Shezan Inter.XD 115.96 115.96 115.00 115.96 0.00 122Pak Elektron Ltd. 3.95 4.24 4.00 4.01 0.06 9,551Tariq GlassXD 8.40 8.90 8.01 8.50 0.10 16,928Khyber Tobacco 25.37 25.37 24.11 25.37 0.00 305Pak Tobacco Co. 59.69 59.69 56.90 59.69 0.00 1Shifa Int.Hospitals 30.33 30.44 29.70 29.70 -0.63 16,240Hum Network XD 15.46 16.44 14.55 15.46 0.00 63Media Times Ltd 7.96 8.96 6.96 7.96 0.00 309P.I.A.C.(A) 2.02 2.12 2.00 2.03 0.01 111,186P.T.C.L.A 10.69 10.83 10.60 10.81 0.12 595,488Telecard Limited 0.80 0.86 0.80 0.82 0.02 173,000Wateen Telecom Ltd 1.88 2.02 1.90 2.01 0.13 572,733WorldCall Telecom 1.05 1.09 1.02 1.08 0.03 225,075Sui North GasXDXB 17.20 17.50 17.01 17.44 0.24 15,390Sui South GasXDXB 19.61 20.20 19.51 19.69 0.08 7,317EFU Life Assur 68.54 69.99 67.50 68.86 0.32 9,301AKD Capital Ltd.XD 26.44 27.27 26.44 26.44 0.00 201

symBOL OPEN hIGh LOw CuRRENt ChANGE vOLumE

Oil and GasAttock Petroleum 411.14 412.75 406.10 406.99 -4.15 18,325Attock Refinery 126.72 127.68 125.01 125.37 -1.35 226,908Burshane LPG XD 23.22 23.89 23.22 23.22 0.00 1Byco Petroleum 7.20 7.38 7.19 7.25 0.05 1,147,404Mari Gas Co.XB 96.00 97.00 93.15 93.74 -2.26 47,325

ChemicalsAgritech Ltd. 15.00 15.48 15.00 15.00 0.00 1,002Arif Habib CoXDXB SD 29.85 29.90 29.45 29.51 -0.34 252,944Bawany Air Products 5.00 5.25 5.00 5.25 0.25 1,000Clariant Pakistan 156.34 156.74 155.00 155.18 -1.16 2,897Dawood Hercules 39.08 39.35 38.50 38.62 -0.46 15,788

Industrial metals and MiningDost Steels Ltd. 1.51 1.59 1.46 1.48 -0.03 71,503Huffaz Seamless Pipe 9.20 9.48 9.06 9.06 -0.14 2,002Int. Ind.Ltd. 33.86 33.00 32.18 32.53 -1.33 16,754Inter.Steel Ltd. 10.80 11.00 10.77 11.00 0.20 5,352Siddiqsons TinXD 6.97 7.25 6.97 6.97 0.00 205

Construction and MaterialsAl-Abbas Cement 1.91 2.19 1.90 1.90 -0.01 3,005Attock Cement 52.50 52.52 52.40 52.49 -0.01 1,288Bal.Glass 1.95 1.98 1.95 1.95 0.00 100Berger Paints 14.18 13.70 13.70 13.70 -0.48 500Buxly Paints 6.00 6.50 6.00 6.00 0.00 1

General IndustrialsCherat Packaging 28.15 28.60 27.80 27.86 -0.29 14,445ECOPACK Ltd 3.10 3.15 2.85 3.11 0.01 110,806Ghani Glass LtdXD 39.88 40.50 39.00 39.34 -0.54 1,261MACPAC Films 9.00 9.38 8.53 9.38 0.38 502Packages Limited 89.50 92.00 85.03 88.55 -0.95 17,243

Industrial EngineeringAL-Ghazi Tractors 169.86 172.00 168.00 169.86 0.00 68Bolan CastingXD 28.00 28.55 28.00 28.00 0.00 4,001Ghandhara Ind. 6.94 7.40 7.34 7.38 0.44 500Hinopak Motor 96.11 95.76 91.31 95.76 -0.35 11K.S.B.Pumps 26.95 27.13 25.61 26.95 0.00 418

Automobile and PartsAgriautos Industries 60.27 60.99 60.27 60.27 0.00 50Atlas Battery Ltd. 172.01 172.01 172.00 172.01 0.00 100Atlas Honda Ltd. 125.27 126.00 125.00 125.00 -0.27 500Bal.Wheels XD 26.00 25.99 24.70 24.84 -1.16 537Dewan Motors 2.15 2.60 2.11 2.13 -0.02 79,586

BeveragesMurree Brewery Co. 110.49 111.43 109.00 111.18 0.69 1,170Shezan Int’l 150.02 150.00 145.05 145.58 -4.44 203

Mutual Funds

fund Offer Repurchase NAv

Alfalah GHP Cash Fund 501.2900 501.2900 501.2900 Askari Islamic Asset Allocation Fund 114.7196 111.8516 111.8516Askari Islamic Income Fund 103.6501 102.6136 102.6136 Askari Sovereign Cash Fund 100.6900 100.6900 100.6900 Atlas Income Fund 519.3500 514.2100 514.2100 Atlas Islamic Income Fund 519.0900 513.9500 513.9500Atlas Money Market Fund 516.9700 516.9700 516.9700 Atlas Stock Market Fund 453.1500 444.2600 444.2600 Crosby Dragon Fund 82.9800 81.3500 81.3500

fund Offer Repurchase NAv

HBL Money Market Fund 100.2768 100.2768 100.2768 HBL Multi Asset Fund 87.0103 85.3042 85.3042 HBL Stock Fund 97.6745 95.2922 95.2922 IGI Income Fund 101.8987 100.8898 100.8898IGI Stock Fund 112.3545 109.6141 109.6141 JS Principal Secure Fund I 121.5000 111.5200 117.3900 JS Principal Secure Fund II 104.1200 96.5000 101.5800 KASB Cash Fund 0.0000 0.0000 100.1087

Markets

Friday, 25 November, 2011

06top 10 sectors

49% 01%Construction & Materials

Chemicals Real Estate Investments

03%Electricity

01%03%

Fixed Line Telecommunication

17%Equity Investment Instruments

Financial Services

09%Banks10%Oil & Gas04%Personal Goods04%

International Oil PriceWTICrude Oil

$96.58

BrentCrude Oil

$107.02

STOCK MARKET HIGHLIGHTS

Index Change Volume Market ValueKSE-100 11729.40 +95.43 41,341,966 2,533,096,420LSE-25 3056.94 +32.42 1,134,449 37,187,937ISE-10 2635.27 +26.61 68,500 1,925,270

Major Gainers

Company Open High Low Close Change TurnoverRafhan Product 2600.16 2700.00 2540.00 2684.75 84.59 15Bata (Pak) Ltd. 745.07 782.00 708.00 770.00 24.93 11,805Pak Oilfields Ltd. 352.88 360.98 351.50 360.18 7.30 990,650Fauji FertilizerXD 168.30 176.00 167.25 175.52 7.22 3,317,726Attock Petroleum 400.43 408.00 396.50 406.68 6.25 35,721

Major Losers

Nestle PakistanXD 2810.98 2899.00 2700.00 2759.94 -51.04 168Hinopak Motor 86.44 82.12 82.12 82.12 -4.32 886Packages Limited 88.01 87.85 85.00 85.04 -2.97 20,401Habib Bank Ltd XD 115.41 116.10 112.35 112.60 -2.81 319,942IGI Insurance Ltd. 46.02 48.20 43.72 43.72 -2.30 42,287

Volume Leaders

Bank Al-Falah 11.95 12.05 11.90 11.99 0.04 8,073,761Fauji Fert 57.15 58.70 56.70 58.49 1.34 5,891,916Jah.Sidd. Co. 5.40 5.79 5.36 5.54 0.14 3,405,019Azgard Nine 3.34 3.52 3.11 3.45 0.11 3,344,003Fauji Fertilizer 168.30 176.00 167.25 175.52 7.22 3,317,72

Bullion MarketPer Tola (PKR) Per 10 Gm (PKR) Per Ounce US$

Gold 24K 55,753.00 47,850.00 1,698.00Gold 22K 51,608.00 44,245.00 –Silver (Tezabi) 1,051.00 902.00 35.05Silver (Thobi) 1025.00 880.00 –

Interbank RatesUS Dollar 87.6404UK Pound 136.2897Japanese Yen 1.1357Euro 117.3856

Buy SellUS Dollar 87.30 88.00Euro 116.74 117.94Great Britain Pound 135.50 136.78Japanese Yen 1.1283 1.1354Canadian Dollar 83.09 85.23Hong Kong Dollar 11.09 11.33UAE Dirham 23.78 23.93Saudi Riyal 23.29 23.42Australian Dollar 84.70 87.16

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07

Friday, 25 November,2011

closing bell

A B C D E F G H

8

7

6

5

4

3

2

1

White to play: play and mate in 3 moves

cY IN ThE PITS

chESS

BOONDOckS

DILBERT

GARFIELD

BALDO

sudoku solution

crossword solution

chess solution

Today’s soluTions

1.Qxc6+[1.nxc7+ rxc7 2.Qxc6+

rxc6 3.rd8#] 1...bxc6

2.Nxc7+ Rxc73.Rd8# *

Your sense

of belonging is

heightened today,

and you should find that

you enjoy the artistic and

communal elements of your

surroundings even more than

usual. Share the passion!

ariesTry not to

believe the hype

today -- remember

that not all that glitters is

gold. You may be the only

skeptical voice in the chorus,

so make sure that you're able

to stand your ground.

taurusTry not to

come on too

strongly today -- people

are resistant to anything

they perceive as preaching.

Your energy is better spent

on gentle persuasion or

even on solo projects.

gemini

Try not to worry

too much about

it, but you've got a

problem at home that

needs a remedy. It may

involve bringing in someone

from outside, though too

much socializing won't help.

cancer

Things are

looking bleak

-- but you have to

persevere! Failure can only

come if you walk away or

otherwise give up, but you

can easily move past this dark

phase to make a difference.

You may

find it difficult

to handle someone's

minor complaints or silly

quibbles, but that's no reason

to let yourself go off the deep

end! Just kick back and let

them prattle for now.

leo

Make a new

friend or work

connection today

-- your social energy needs

exercise! You may find it

easier than usual to say hello

to that cute stranger, too,

so go for it if you want!

aQuarius

Try doing

whatever you

can to overcome tension at

the workplace or even at home

today. Silly jokes, changes in

topic or even launching a

fight can help to make life

easier in the long run.

virgo

Someone thinks

they know

better than you -- and that

doesn't feel good, of course.

The thing is, they probably

have some measure of power

over you, so the best you can

expect is a compromise.

piscescapricorn

You've got big

ideas, and now

is the best time for

you to spin them out

and see where they might

lead. You might not have to

take action quite yet, as

planning is more important.

libraYou need to

deal with your

instincts today --

they are almost certainly

leading you in the right

direction. It might not feel

perfectly right, but that's why

you have to simply have faith.

scorpioYou feel just

right today -- things

are really looking up!

Your great energy helps

you to find new ways to get

things done and impress all

the right people. All you have

to do is turn on that smile!

sagittarius

BRIDGE

cROSSWORD

fill in all the squares in the grid so that each row,

column and each of the squares contains all the digits.

the object is to insert the numbers in the boxes to

satisfy only one condition: each row, column and 3x3

box must contain the digits 1 through 9 exactly once.

hOW TO PLAY

WORD SEARch

ACROSS

5 Sad regent (anag) — disaffected (9)

8 Bitterness — digestive fluid stored in the gall

bladder (4)

9 Interrogate (8)

10 central American country, formerly British

honduras (6)

11 Erase (6)

13 Dirty (6)

15 Offhand — informal (6)

16 Deep fissure in a glacier (8)

18 Mislay — fail (4)

19 Anxious (3,2,4)

DOWN

1 Over and above what is usually expected (8)

2 French cubist painter, d. 1963 (6)

3 Mean (6)

4 Exploit (4)

6 Piece of dining-room furniture (9)

7 hopeless endeavour (4,5)

12 Lethargic (8)

14 Gloomy (6)

15 Intelligent (6)

17 Electrical unit of measurement (4)

adults

allows

always

apparent

birthday

business

craft

dour

effect

emerge

fire

great

house

lets

little

master

matters

months

more

nearby

policy

post

proof

provide

puns

purpose

rapid

saws

scheme

several

similar

spend

spite

switch

teach

towns

truthC

MY

K

SUDOkU

Profit for e-paper_Layout 1 11/24/2011 10:32 PM Page 7

Friday,25 November,2011

news

08suGAR CERtIfICAtION IssuE

Govt extends tenderdate to Nov 30

KARACHI

GhULAM ABBAS

DeSPIte the Free trade Agree-ment (FtA) signed betweenPakistan Sri Lanka, the exportof commodities like fruit and

vegetables from the former to the latterare going to be badly affected as the for-eign country has imposed ‘Special Com-modity Levy’ on imports.

the recently imposed levy has startedaffecting the exports of agricultural prod-

ucts to Sri Lanka which may reduce theover all exports of the country, exporterstold Profit. It is worth mentioning herethat the foreign country is the major im-porter/buyer of Pakistani onion, Potatoand Kinnow. A Special Commodity Levywas imposed by Sri Lanka on ImportedAgricultural Products such as GreenGram, Black Gram, and others to protectits domestic farmers. the levy was im-posed for three months.

After the new levy, the duties onmany export items from Pakistan have

been doubled as the duty on Kinnow hasincreased from $2.19 per 13 kilograms to$4.47. the duty on onion has increasedfrom 9 cents to 22 cents per kilogramwhile the levy on Potato has increasedfrom 4.5 cents to 30 cents per kilogram inthe foreign country.

According to sources in fruit and veg-etable exporters market, under the newduty the export of Kinnow to Sri Lanka isfeared to be reduced by 60 per cent dur-ing the current season as the South Asiancountry is considered a major market for

Pakistani fruit. the fresh move is likely toaffect the expected 13000 to 15000tonnes of Kinnow export to Colombo thisyear, they said. Pakistan had exported al-most 35000 tonnes potato last year.

Interestingly, according to sources,there is no additional duty on imports ofPan, Chalia, Coconut Powder, Pineapple,and others from the foreign country inPakistan. According to the sources, thefresh move of Colombo was against thespirit of the Pak-Sri Lanka FtA which en-sures free trade and reduced duty on im-

ports. “the concerned authorities likeministry of Commerce, trade Develop-ment Authority of Pakistan and othersshould immediately take up the issuewith Sri Lankan government to avoidnegative impacts on Pakistan exports,”they said.

“All Pakistan Fruit and vegetable ex-porters, Importers and merchant Associ-ation has also planned to visit theCounsel General of the foreign country toexpress their concerns about the fresh de-velopment in Colombo,” they added.

g Pakistani export of Kinnow, Onion, potato to suffer most g 60 pc reductions in Kinnow export to sri Lanka expected

Pakistan’s exports to Sri Lanka in jeopardy

Chairman fBR, salman siddique

LAHORE

STAFF REPORT

CHAIrmAn All Pakistan textilemills Association (APtmA),mohsin Aziz has said massive

decline in textile exports in the month ofoctober, both in value and quantityterms, is alarming and this trend is likelyto continue in the month of november.He cited that ImF’s latest report has alsoendorsed APtmA concerns regardingsluggish economic trends, particularlyrising trade deficit amidst dwindlingexports. He said exports may drop furtherin coming months due to unfavourablecircumstances.According to him, textile exports despitehaving increased in value terms duringlast four months of current fiscal year,still declined in quantity terms in october.exports of cotton yarn, cotton cloth,knitwear, bed wear, towel and readymadegarments have registered decline by 26per cent, 32 per cent, 26 per cent, 28 percent, 12 per cent and 14 per centrespectively, he added. Chairman APtmAsaid short supply of energy was the majorreason behind drop in exports, as textileindustry has been denied gas supply for120 days during 2011 against much lesserdays during previous year. Further, hesaid, high interest rate was restrictingindustry expansion. According to him, a

reduction of 150 basis points to produceexport surplus has failed in pushing creditoff-take, which means interest rate is stillon higher side and both commercial andindustrial borrowers are reluctant forfurther financing.Chairman APtmA said interest rate theworld over ranges between zero to oneper cent and the discount or policy rate isnot more than 8.5 per cent in theregional economies against Pakistan,where it is still in the double digits; 12per cent. He said ImF is also of theopinion that improvement inemployment and living standards is notachievable unless economic reforms takeplace by ensuring industrial expansionand new set ups with reduction ininterest rates. He said SBP should reducediscount rate by 250 basis points inupcoming monetary policy on november30th to ensure single digit mark up in thecountry. According to him, curbinginflation should be the priority ofgovernment but still it should not be at thecost of industrial growth; as reduction indiscount or policy rate would not affectinflation and instead it would be helpful increating new jobs. Chairman APtmA hasurged government to ensure uninterruptedenergy supply to industry forthwith,besides reducing mark up to single digit tolet industry expand and perform tocontribute in national economy.

fBR has unearthed duties and taxes’evasion of over Rs55 billion as 28,000containers carrying commercial cargo underthe Afghan transit trade (Att) went missingon route from Karachi Port to Afghanistan

KARACHI

GhULAM ABBAS

Government had issued atender to buy at least 0.2million tonnes sugar fromlocal market, and now it has

extended the date of tender to 30thnovember. Issue of certifying thesugar to be bought from PakistanSugar mills Association (PSmA), how-ever, is still unresolved.

Pakistan Standards and QualityControl Authority (PSQCA) has deniedto certify quality of sugar to be pro-cured by trading Corporation of Pak-istan (tCP) from local mills. this is dueto the fact that mills of PSmA were notcertified by the authority.

As government itself has includedsugar in list of compulsory items re-quired to be certified from PSQCAthrough an act of Parliament, certifica-tion of the kitchen item before procure-ment has become a challenge for theconcerned authorities, sources said.

According to sources, under the un-resolved quality issue, concerned au-thorities which were to finalise thematter before 22nd november have ex-tended date for tender issued by tCP tothe end of this month. economic Coor-dination Committee (eCC) was alsolikely to discuss the issue in its sched-uled meeting on 28th november.

In reply to a recently sent letterfrom tCP, in which the corporationhad sought PSQCA’s help in certifyingquality of locally produced sugar, theauthority has refuses to approve stan-dard of the products saying that themills were not certified. there was al-ready a court’s stay over certificationof quality and standards of sugar pro-duced by PSmA as local sugar millershad gone to Supreme Court of Pak-istan against PSQCA. According tosources, PSQCA in its letter sent totCP, has made it clear that no organi-sation can produce listed item withoutgetting license from the authority.Both products (sugar) and bags wereneeded to be certified by PSrCA.

Despite all arrangements made byeCC and tCP, to procure limited sugarfrom the local millers through the re-cently issued tender, government is yetto take final decision about procure-ment as there was confusion over qual-ity issue. Since tCP has already made it

mandatory in its documents that qual-ity of the products should be as perstandard of PSQCA, certification ofkitchen items has become an issue forconcerned authorities.

In recently issued Gallop tendernotice of tCP for purchase of 200,000mt sugar, it was mentioned that bidsshould be in sealed envelops for a min-imum quantity of 5,000 mt and maxi-mum of 20,000 mt white sugar packedin polypropylene woven sacks. this isto be done as per detailed specificationand PSQCA approved standards asmentioned in tender documents.

However, sources said that as both

PSQCA and tCP were government or-ganisations, there should be a way outto resolve quality issue.

Until quality issues were resolvedprocurement of sugar from PSmAwould be gross violation of govern-ment’s acts and also procurement rulesof tCP. It is worth mentioning herethat earlier PSmA had greatly appreci-ated government’s decision procure200,000 tonnes sugar, from localmillers as the move would indirectlyhelp growers. the association had re-ceived bids of minimum price of rs65and maximum of rs66 per kg in anopen public tender.

g ECC to discuss sugar procurement issue on Nov 28 g PsQCA denies certifyingsugar from PsmA g tCP seeks help from PsQCA to certify sugar

sPECIAL COmmODIty LEvy

Reduction in exportsalarming: Chairman APtmA

LAHORE

STAFF REPORT

WAter and Power DevelopmentAuthority (WAPDA) has decidedto deploy state-of-the-art tunnel

boring machines (tBms) for on-schedulecompletion of the strategically important969 mW-neelum Jhelum hydropowerproject. Deployment of tBms on the proj-ect will reduce the construction period byabout two years, resulting in an estimatedbenefit of rs90 billion.

Chairman WAPDA, Shakil Durrani, ex-pressed these views during his visit toneelum Jhelum hydropower project. Hewas accompanied by member (Water)WAPDA, Syed raghib Abbas Shah and Chiefexecutive officer/managing Directorneelum Jhelum hydropower company, LtGen (r) muhammad Zubair.

Chairman inspected the diversion tun-nel at nauseri, where river neelum was di-verted in october 2011 to initiateconstruction of the weir. He also visitedother components of the project includingweir site, de-sander, main tunnels, etc.

Speaking on the occasion, the chairman

said neelum Jhelum is a priority project ofWAPDA’s least-cost energy generationplan. Since completion of the project is vitalfor the country, WAPDA is taking all possi-ble measures for the purpose including de-ployment of two tBms on the project. thetBms being imported from Germany bythe contractor are expected to reach Pak-istan by January 2012, he added. Laudingthe efforts of the project authorities, thechairman said completion of the tunnel todivert river neelum, is a landmark in im-plementation of the project.

the diversion tunnel was completed inoctober in record time of two years.

neelum Jhelum Hydropower CompanyCeo/mD, briefing the Chairman, said thatoverall progress on the project stands at 27per cent. He further said about 17-kilometerlong tunnels have so far been constructed.these include both access and main tunnels.the project is scheduled to be completed in2016. on completion, the project will pro-vide about 5.15 billion units of electricity an-nually to national Grid. Benefits of theproject have been estimated as rs45 billionper annum. the project will pay back its costin about 7 years.

wAPDA to ensure early completionof 969 mw-Neelum Jhelum Project

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