ISLAMABAD (April 24 2010): The report submitted by Sui Southern Gas Company Limited (SSGC) to the Supreme Court has raised the question as to who had recommended Shell Company for multibillion dollars LNG contract as a firm, '4 Gas', had not designated it as a supplier for the 'LNG Mashal Project'. According to the report, '4 Gas' designated GDF, Mitsubishi, BP and Woodside as its designated suppliers.
Price Negotiations Committee held discussions with whoever was willing to discuss supply of LNG to Mashal and choose to recommend the best offer which was that of GDF Suez. But the report submitted by SSGC has not shown how Shell Company was inducted in the project and even its offer was submitted to the Economic Co-ordination Committee (ECC) of the Cabinet as the second lowest bidder for LNG deal under LNG Mashal Project.
According to SSGC, the consultants appointed for the same had also recommended the '4Gas'-GDF Suez combination. The report gives the impression that it had already been decided to award contract to '4 Gas'-GDF Suez combination without any other party following the recommendations of the consultants.
The SSGC said that '4 Gas' participated in the Expression of Interest (EoI) and qualified at every level. '4 Gas' designated GDF, Mitsubishi, BP and Woodside as its designated suppliers. Price Negotiations Committee held discussions with whoever was willing to discuss supply of LNG to Mashal and choose to recommend the best offer which was that of GDF Suez.
According to SSGC, the consultants appointed for the same had also recommended the 4Gas-GDF Suez combination. "It is submitted that there is nothing illegal about the Mashal Project. This Hon'ble court has no jurisdiction, and there is no law to scrap this project if the ECC has approved it and still wants the same to go ahead with it," the SSGC added. But SSGC also missed the point that then ECC chairman Shaukat Tarin had stated many times that he was kept in the dark by Petroleum Ministry when summary was submitted for approval.
It is also pertinent to mention here that this is not a project which is being constructed by government funds. '4 Gas' is a private company that is making investment in the Mashal Project and taking the risks. According to SSGC, GDF Suez is LNG supplier willing to offer the best terms and conditions available in the market today which are acceptable to the government of Pakistan.
There is no reason to end this project. Submission of incomplete summary by the Petroleum Ministry to ECC or holding back information from ECC is the fault of the ministry and not of the gas suppliers or terminal operators. "In the end it is submitted that Pakistan may need more terminals and hence it has been recommended that ECC should approve future projects like Mashal to meet the increasing demand," the report said, adding that any action taken to jeopardise the Mashal Project is unjustified and wrong for the country.
Saturday, April 24, 2010
World Bank asks FBR to estimate number of VAT taxpayers: action plan prepared
ISLAMABAD (April 24, 2010): The World Bank (WB) Review Mission has asked the Federal Board of Revenue (FBR) to immediately estimate the prospective taxpayers who are expected to join value-added tax (VAT) net with the start of initial registration process next month for introduction of the VAT from July 1, 2010.
Two weekly holidays notified
ISLAMABAD (April 24, 2010): In its first move after decisions for power conservation, the federal government has issued the notification regarding two-day weekly holiday in government and semi-government offices round the country, whereas the State Bank of Pakistan has also announced two holidays for the banking sector. Interior Ministry issued the notification on Friday for two weekly offs in government and semi-government offices, and working hours in the offices have also been changed.
SBP announces five-day working week for banks
KARACHI (April 24, 2010): Following the federal government directive, the State Bank of Pakistan on Friday announced to observe two weekly holidays to help the government to overcome energy crisis. "All bank, DFIs and exchange companies will also comply with the central bank's directive and will observe two holidays in a week," said Syed Wasimuddin, chief spokesman, SBP.
Friday, April 23, 2010
Six percent power tariff hike: IMF may be approached for waiver
ISLAMABAD (April 22 2010): Pakistan may again approach the International Monetary Fund (IMF) for waiver of 6 percent increase in power tariff, due from April, after a comprehensive strategy based on long-, medium- and short-term measures being announced by Prime Minister Yousaf Raza Gilani to address the energy crisis and resolve the issues of power sector.
Sources said that the issue of waiver on power tariff was not resolved during the recent talks with the IMF delegation and the final decision to this effect was to be taken by political leadership. The relaxation on power tariff was reported to have been linked to the satisfaction of Asian Development Bank and World Bank who wanted Pakistan to devise a clear strategy for addressing the growing energy crisis and the issues of power sector including circular debt.
Sources said that measures to be unveiled on Thursday after three days' deliberation at the energy conference would hopefully address the concerns of ADB and WB and also their suggestion at least to some extend for use of gas as input for power generation through closure of CNG stations and industrial units for one-day a week to divert 150 MMCFD gas to the power sector.
Pakistan wanted waiver with respect of 6 percent increase in electricity tariff that was due from April 1 because of expected strong backlash from the masses who are already protesting across the country against intolerable power outages. This waiver would not have any impact on fiscal deficit and money for other heads would be use for subsidy. They said that total impact of holding on due increase in power tariff would be around Rs 25 billion for the next three months, which would be met by using Rs 25 billion subsidy earmarked in the budget for wheat import.
Under IMF conditions, the government had agreed to raise the power tariff by 24 percent during the current fiscal year, in three phases. Tariff was increased by six percent in the October-December quarter and another 12 percent in January-March, while another six percent was committed by the government to the IMF to become effective from April 1. Sources said that further increase in electricity tariff at this point in time of deepening power crisis was not possible.
Any increase in the electricity tariff would aggravate anger of the masses against the government and they might resort to protest and riots. This would ultimately have negative impact on growth and revenue and increase in the price of power would escalate inflationary pressure as well.
Having taken into consideration all these aspects, sources said, the government may request IMF for waiver in power tariff increase due from April 1. The government has not been able to reduce transmission and distribution losses or improve efficiency; subsidy on electricity would reach Rs 146 billion against Rs 66 billion budgeted for the ongoing fiscal year.
The government had allocated Rs 66 billion for power subsidies in the ongoing budget, while Rs 55 billion approval was sought during the second quarter of on-going fiscal year. At present, approval of another estimated Rs 25 billion is being requested from the IMF.
Sources said that the issue of waiver on power tariff was not resolved during the recent talks with the IMF delegation and the final decision to this effect was to be taken by political leadership. The relaxation on power tariff was reported to have been linked to the satisfaction of Asian Development Bank and World Bank who wanted Pakistan to devise a clear strategy for addressing the growing energy crisis and the issues of power sector including circular debt.
Sources said that measures to be unveiled on Thursday after three days' deliberation at the energy conference would hopefully address the concerns of ADB and WB and also their suggestion at least to some extend for use of gas as input for power generation through closure of CNG stations and industrial units for one-day a week to divert 150 MMCFD gas to the power sector.
Pakistan wanted waiver with respect of 6 percent increase in electricity tariff that was due from April 1 because of expected strong backlash from the masses who are already protesting across the country against intolerable power outages. This waiver would not have any impact on fiscal deficit and money for other heads would be use for subsidy. They said that total impact of holding on due increase in power tariff would be around Rs 25 billion for the next three months, which would be met by using Rs 25 billion subsidy earmarked in the budget for wheat import.
Under IMF conditions, the government had agreed to raise the power tariff by 24 percent during the current fiscal year, in three phases. Tariff was increased by six percent in the October-December quarter and another 12 percent in January-March, while another six percent was committed by the government to the IMF to become effective from April 1. Sources said that further increase in electricity tariff at this point in time of deepening power crisis was not possible.
Any increase in the electricity tariff would aggravate anger of the masses against the government and they might resort to protest and riots. This would ultimately have negative impact on growth and revenue and increase in the price of power would escalate inflationary pressure as well.
Having taken into consideration all these aspects, sources said, the government may request IMF for waiver in power tariff increase due from April 1. The government has not been able to reduce transmission and distribution losses or improve efficiency; subsidy on electricity would reach Rs 146 billion against Rs 66 billion budgeted for the ongoing fiscal year.
The government had allocated Rs 66 billion for power subsidies in the ongoing budget, while Rs 55 billion approval was sought during the second quarter of on-going fiscal year. At present, approval of another estimated Rs 25 billion is being requested from the IMF.
BRIndex30 up by 10.29 points
KARACHI (April 23, 2010): On Thursday, BRIndex30 opened in the positive zone at 8,842.14. It closed at 8,852.43 with a net positive change of 10.29 points and percentage change of 0.12. It showed intra-day high of 8,935.28 and intra-day low of 8,835.83. The volume of BRIndex30 was 121,940,029, which was 65.66 percent of KSE All Share and 92.93 percent of KSE-100.
Equities move both ways on LSE
LAHORE (April 23, 2010): Equities on Thursday moved both the ways on the Lahore Stock Exchange (LSE) and finally ended with marginal losses amid descending transaction volume on account of investors' behaviour who adopted conscious approach. The LSE-25 index registered insignificant decline of 1.51 points and was ended at 3307.14 against 3308.65 of Wednesday, while trading turnover squeezed to 11.767 million shares, as compared to previous volume of 13.807 million shares.
US Congress takes step towards Iran sanctions
WASHINGTON (April 23, 2010): The US Congress took a critical step Thursday towards imposing new economic sanctions on Iran, as lawmakers warned time was running out to keep Tehran from developing nuclear weapons. "This may be our last chance to apply pressure on Iran before it is too late," said Republican Representative Ileana Ros-Lehtinen, who charged Iran was sprinting "to the nuclear finish line."
Swiss mull laws to allow break-up of UBS and Credit Suisse in crisis
BERNE (April 23, 2010): UBS and Credit Suisse should change their structure to allow their break-up in the case of an insolvency to limit the risks for the Swiss economy, a government commission said on Thursday. In an interim report on the too-big-to-fail issue, the commission urged lawmakers to enable regulators to force the banks if necessary to adopt a structure that allowed to keep key businesses going in case of an insolvency.
Former MPA among five shot dead in Charsadda
PESHAWAR (April 23, 2010): At least five people including Alamzeb Omarzai, a former MPA, were shot dead in an attack by armed men at Charsadda Chowk near Sui-Gas Office on Thursday morning. Talking to APP, PPP-Sherpao spokesman said that four armed men in a double cabin pickup started indiscriminate firing at the vehicle, killing Alamzeb on the spot.
Customs blows the lid off tax frauds involving billions
KARACHI (April 23, 2010): The R&D wing of Pakistan Customs has blown the lid off tax frauds of billions of rupees committed by prominent importers of auto parts, chemical and steel, it is learnt. Sources told Business Recorder on Thursday that the action was taken on a tip-off, which revealed that a large number of importers are involved in tampering of Goods Declarations (GDs) to clear import consignments at nominal duties and taxes through Pakistan Customs Computerised System (PaCCS).
Benazir Smart Card scheme launched
LAHORE (April 23, 2010): Benazir Income Support Programme (BISP) was a revolutionary step by the government that had no precedence, said President Asif Ali Zardari on Thursday. BISP is a step towards making Pakistan a welfare state, and through which efforts are being made to eliminate poverty and strengthen women socially and financially. According to the vision of Quaid-e-Awam Shaheed Zulfiqar Ali Bhutto and Shaheed Mohtarma Benazir Bhutto.
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