Wednesday, 7 September 2011

Daily Business News in Brief: 08.09.2011

Pakistan, Kazakhstan discuss trade, investment, security

ASTANA – Pakistan and Kazakhstan September 7 signed an agreement to enhance bilateral trade and help business leaders promote investment in diverse fields, the Associated Press of Pakistan reported.
Officials signed the agreement at Government House after talks between Prime Minister Yousuf Raza Gilani and his Kazakhstani counterpart, Karim Massimov.
The deal’s objective is to promote market research, develop commercial relations and expand projects between the two countries, media reported.
The agreement would encourage regular exchange of their business delegations between the two countries and remove obstacles in bilateral trade, media added.
Gilani discussed trade and regional security with Kazakhstani President Nursultan Nazarbayev, media reported.
Pakistan appreciates Kazakhstan’s support of its effort to become a full Shanghai Co-operation Organisation member, Gilani said, adding that the two countries share an interest in a peaceful, sovereign Afghanistan, Associated Press of Pakistan reported.

Pakistan would be happy to open its seaports to Kazakhstani trade, Gilani said, according to Kazinform.

Payment to IPPs: Finance may borrow Rs 100 billion from banks

The Finance Ministry is likely to borrow Rs 100 billion from commercial banks to pay at least half of the overdue amount of independent power producers (IPPs), against total dues of Rs 210 billion.

The committee on energy, headed by Finance Minister Dr Abdul Hafeez Shaikh, on Wednesday discussed different options for arranging the huge amount required by the power sector to avert a deepening power crisis that would further compromise growth in all sectors.

The IPPs account for over 50 percent of total power generated in Pakistan due to the failure of successive governments to undertake hydropower projects, the cheapest source of energy. "The government has to inject substantial amount to facilitate the IPPs to run their financial affairs smoothly," said IPPs Advisory Council Chairman Abdullah Yusuf while talking to Business Recorder.

The committee will meet with Prime Minister Yousaf Raza Gilani on Thursday to discuss different options to resolve inter-circular debt, which basically has put the entire energy sector at risk. Sources in the Finance Ministry said that the government had earmarked nothing in the federal budget for 2011-12 to clear the overdue amount of the IPPs. However, now with the IPPs' increasing pressure on the government with the threat of invoking GoP guarantees, the economic managers are compelled to move expeditiously.

"The government has to arrange about Rs 100 billion, as 'supplementary grant', to pay the IPPs or borrow from the banks. The IPPs have no other option but to go for legal remedies if the government fails to fulfil its commitment," commented a power sector analyst.

The proceedings of the third meeting focused on the issues related to power generation especially the IPPs including the circular debt, outstanding payments and a sustainable way forward to devise a permanent solution to the liquidity issues of the sector. The committee held detailed discussion with the representatives of the IPPs. Two smaller committees, with a clear mandate, were formed. These subcommittees will develop proposals for the resolution of issues highlighted during the third meeting. According to the IPPs Advisory Council, if the backlog of overdue amount is not cleared, power production constraints would further aggravate power shortage.

Currently, the country is facing shortage of about 4000 MW, mainly due to mismanagement and inter-circular debt. Sources said that the committee would recommend immediate increase of electricity prices by up to 12 percent to the Prime Minister which the committee believes is necessary to deal with inter-circular debt.

Pakistani forces gain extra powers against militants

PESHAWAR – The federal government has armed security forces and civil authorities with more power to crush militants in the tribal areas and the Malakand Division of Khyber Pakhtunkhwa (KP).
The Actions (in Aid of Civil Power) Regulation, 2011 strengthens the security forces and political and civil administration in the Federally Administered Tribal Areas (FATA) and Provincially Administered Tribal Areas (PATA).
The law that extends to the two militancy-infested regions is retroactive to February 1, 2008, although the government promulgated them only in August, according to the government.
The law authorises troops to use the force necessary to “achieve the objective during any armed action” and to take any action “necessary in this regard.”
They are empowered to search any place suspected of hiding miscreants or their weapons. Anybody suspected of “challenging the authority” of the federal or provincial government will be considered in violation of the new laws, as will anybody granting “refuge to miscreants,” the law says.
Penalties include capital punishment. The clause making the law retroactive to 2008 protects troops who took action that otherwise might have been subject to prosecution.
The action follows the recent extension of the Political Parties Act to FATA, which observers hailed as a belated strengthening of democracy there.
The law protects law-abiding citizens from criminals, KP Governor Barrister Masood Kausar said.
“We have come up with a piece of legislation aiming at strengthening the hands of security forces and government authorities to guard own people and country against terrorists,” he told Central Asia Online.
Law protects civilians from abuse
The law requires troops to exercise caution to minimise collateral damage.
“The commander of armed forces shall issue instructions to troops under their control that the armed forces shall adhere to the principles of proportionality and necessity,” it says.
Any misuse of authority during armed action will land the accused in trouble, the new law warns. Any violation is subject to military or civil investigation, depending on the offending official’s status.
Liberal democrats and nationalists backed the new law.
“We support this law,” Mian Iftikhar Hussain, minister for information of KP, said.
The Pakhtunkhwa Milli Awami Party welcomes the law, said Arbab Mujeeb of the party.
“The Uzbek and Chechen terrorists were beheading innocent people in tribal areas, and the government promulgated the law to put a brake on such acts,” he said.
Right-wing Islamist parties, however, have said the law violates Article 247 (Tribal Areas) of the constitution.
“These regulations violate human rights in tribal areas. They will create disturbances in tribal areas instead of eliminating terrorism,” Maulana Sirajul Haq of Jamaat-e-Islami said.
The Pro-Taliban Jamaat Ulema-e-Islam (led by Fazlur Rehman) also expressed opposition to the regulation.

Brief News:
Ø 11killed in bombingoutside Delhi Court
Ø Karachi situationworsethan Waziristan, SC informed
Ø 2 PIA flights get bomb threats
Ø Peshawar faces imminent terror threat
Ø US slaps sanctions on three Qaeda members
Ø Pakistan improves 5 ranks on Global Competitiveness Index
Ø Bombers kill 26 at FC DIG’s house


Mohammed Saleem Mansoori

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