Zardari will be made to pay back every single penny: Sanaullah

LAHORE – Punjab Law Minister Rana Sanaullah on Saturday said President Asif Ali Zardari would have to return all the looted money to the masses at all costs. In a statement, the minister said after coming to power, the Pakistan Muslim League-Nawaz (PML-N) would ensure that every penny looted by the Pakistan People’s Party (PPP) would be deposited to the national exchequer.

Commenting on a statement by Sharjeel Memon, Sanaullah said everyone in the country was aware of the looting and plundering by Zardari. He alleged that tales of his corruption had become international news as well.

He said that PPP leaders like Shajeel Memom had been dreaming of forming a government in Punjab for several decades, adding that this dream would never be realized.

He claimed that PML-N would not only form a government in Punjab but would win majority seats in the whole country in the next elections as well.
Sanaullah said popularity of the federal government was linked with its corruption, adding that all international monetary organisations like World Bank, Asian Development Bank and Transparency International were witnesses to the good governance of Punjab’s government.

Imran can’t win a single seat: Kh Asif

PML-N leader Kh Muhammad Asif has said that Imran Khan is depressed after the failure of his “tsunami” and now a hopeless “Change Khan” is standing at the crossroads.

Commenting on a statement of Imran Khan on Sunday, he said Imran had now realised that he could not win even his own seat in the forthcoming general elections as agencies were not supporting him. He said that after the next election, it would become clear who was considered by the people a lion and who a circus lion.

He said Imran would soon realise his position as he would come out of the dream world after his defeat in the next elections. “Proponents of so-called change have been badly rejected by people in recent by-elections. Those who raise the slogan of change will be treated similarly in the next general elections,” he said, adding that the way people were leaving Tahreek-e-Insaaf, it seemed that after general elections no one would remain in the PTI except Imran himself.

Metro bus project in final stages: CM

CHIEF Minister Shahbaz Sharif has said that metro bus project is in the final stages of completion and the project of public service is being completed within a record period of eleven months by the Punjab government with its own resources.

He was talking to the citizens during his visit to various sections of the metro bus project here on Sunday.

Shahbaz said the bus project had been launched successfully on experimental basis and the way the people had appreciated it had given him confidence that when metro buses would be operational on a regular basis, the elite would also be proud to travel on them along the common man.

He said that despite severe cold, work was in progress on the project round the clock and he was sure that the project would rid the people of transport problems. He said excellent arrangements had been made at bus stations for convenience of passengers while the entire system was being linked with the electronic system. Similarly, he said, control rooms were being established at all stations.

The CM inspected construction work of the bus project from Gajjumatta to Azadi Chowk and directed the authorities concerned to complete installation of escalators expeditiously. He also visited the bus depot being constructed for metro buses and inspected the buses stationed there. He also inspected the newly-constructed bridge along the Lahore Bridge and visited Kalma Chowk underpass project. He said completion of Kalma Chowk underpass within stipulated period should be ensured at any cost and Lesco authorities should be contacted for the immediate shifting of electric poles. The Chief Minister also gave instructions for horticulture and landscaping on the route of metro bus. He also inspected construction work at the rotary turn near the MAO College.

Shahbaz Sharif visited metro bus project for more than three hours in severe cold and dense fog and without security and protocol. People at various places raised slogans in his support. The CM shook hands with the people and labourers and appreciated them for working in extreme cold. Traffic was not stopped at any place during his three-hour long visit.

Lahore Transport Company Chairman Khawaja Ahmed Hasaan, Punjab Metro Bus Authority Managing Director Sibtain Fazal Haleem, LDA Director General Ahad Cheema and others were present. The LDA DG gave a briefing to the CM on progress on various sections.

Consumers compelled to use inflated alternative fuel

ISLAMABAD – With gas shortfall estimated at about 1.7 billion cubic feet per day (BCFD) in the country, low pressure and gas loadshedding in the twin cities have forced common citizens to utilise alternative sources of fuel at inflated prices to meet domestic purposes.

The shortage of gas has created inconvenience for masses as they are facing trouble in baking food and heating purposes. The residents of twin citizens are facing severe scarcity of natural gas and are perturbed over severe gas shortage, which has forced them to purchase LPG at high prices. However, the LPG marketing companies had increased the prices of cylinders five times during one month while the authorities concerned paid little heed to the public misery and played a role of silent spectator so far. Even, local shopkeepers have jacked up prices of coal, wood and kerosene, viewing the urgency of the situation.

During a recent survey of twin cities conducted by this newspaper, it has become very clear that low gas pressure has multiplied the miseries of domestic consumers in most parts of the twin city, compelling them to use alternate methods to fulfil their household chores. Even, daily routine has also been badly affected due to the low pressure of gas especially at early morning hours and in the evening when the pressure is reduced to zero and it becomes too difficult for the people to cook. One of the respondent told that they have been facing low gas pressure from last few weeks and registered complaints with concerned department many times but to no avail.

The survey has also disclosed that shortage of gas had created inconvenience for masses as they are forced to bear heavy brunt of gas outages in baking food and heating purposes in various areas of the twin cities including sectors G-7/1, G-7/2, G-10/1, G-10/4, CDA Officers Colony and Committee Chowk as well.

Respondents of the survey were of the view that they are being forced to purchase LPG cylinders on inflated rates, as the LPG companies were taking advantage of the shortage and low pressure of gas. They further said reaching late at the office and business has become a routine owing to low gas pressure. They also complained against increase in the prices of LPG cylinders five times during one month.

It merits mentioning here that residents of sector G/7-2 of the federal capital has organised a protest demonstration on Sunday against low gas pressure and scarcity of natural gas at zero point and chanted slogans against Sui Northern Gas Company Limited (SNGPL) management. However, Assistant Commissioner Islamabad arrived at the spot and assured the protestors that gas supply would be restored and their grievances would be addressed properly. Upon this the protestors dispersed.

Banking spread going down below 7 per cent

LAHORE – The banking spread, a key determinant for Pakistan banks’ core earnings, stood at average 7.11 per cent, during first 10 months of 2012, down by 54bps versus 7.65 per cent of the same period last year. This is the lowest 10-month average banking spreads in last 7 years, experts said.

Major reason behind lower banking spread during 10M2012 is the 75bps reduction in banks’ average lending rate to 12.91 per cent versus average lending rate of 13.7 per cent last year, noted expert Farhan Mehmood said.

He stated in a note that it is primarily due to sharp reduction of 400bps in policy rate since mid of 2011 which led to reduction in 6-months KIBOR by an average 200bps to 11.3 per cent in 10M2012 versus 13.6 per cent during the same period last year. However, lower reduction in lending rate by banks is due to the fact that banks could have increased their spread over Kibor rate.

On the other hand, deposit rate stood lower by 20bps to 5.8 per cent in 10M2012 versus average 6 per cent in 10M2011, despite increase in minimum deposit rate on saving accounts in May 2012.

Experts said that alone in Oct 2012, banks’ average spread stood at 6.77 per cent versus 7.67 per cent in Oct 2011, down 90bps primarily due to 127bps reduction in lending rate which is now below 12.5 per cent after a gap of 4.5 years. While, deposit rate remained lower by 37bps to 5.64 per cent. This is primarily due to increase in low cost current deposits and reduction in deposit rates on expensive deposits.

Similarly, on MoM basis, the banks’ spread decline by 13bps following the quarterly adjustment of lending rate by most of the banks (lending rate down 24bpsMoM) after reduction in policy rate by 150bps in 3Q2012.

Farhan believes that average spread to remain around 7 per cent, down 63bps versus average of 7.63 per cent in 2011. Nonetheless, despite the fact that core earnings to remain flat amid fall in spreads, overall banks earnings to grow by more than 14 per cent in 2012 primarily due to lower provisioning. The sector has underperformed the broader index by 5 per cent primarily due to shrinking margin scenario following the series of policy rate cuts.

Girls’ school blown up in Khyber Agency

JAMRUD: Extremist elements blew up a government girls’ middle school with explosive material in Tehsil Jamrud of Khyber Agency while a man was also killed due to the blast, Geo News reported Monday.

According to security forces, the extremists had fixed explosives inside a government girls’ middle school that caused blast and destroyed the school building completely in Bakharabad area of Jamrud. The watchman of the school got killed in the explosion.

More than 70 educational institutions have been destroyed in Khyber Agency over the past four years.

On the other hand, a man was seriously injured when extremists fired a rocket from unknown location in Wazirdand area. The injured man was shifted to the hospital while the security forces have started investigating the incident.

Another discount rate cut in the offing to contain deficit

LAHORE – Considering that the economy is still away from growth target of 4.3 per cent, with elections around the corner, the government will clearly try to re-stimulate consumption next year and also try to cut down its borrowing cost to contain fiscal deficit within 5 per cent of the GDP bracket, experts said.

“The central bank may continue with its easing stance by cutting policy rate by another 50bps, which would be more probable with the sooner than later realisation of the CSF money from the US, by $700 million, along with other smaller foreign flows expected in the 2HFY13 alongside any possible deferment of the IMF repayment,” observed financial experts at Arif Habib Securities. These flows should provide much-needed support to the current account and the rupee, with lower inflation and oil prices supporting the rate cut decision, they added.

The Pakistan Bureau of Statistics (PBS) is still to release price indices for the month of Dec in the upcoming week, however, experts have estimated Consumer Price Index (CPI) based inflation for the month of Dec 2012 to clock in at 7.48pc  YoY. Though higher than Nov 2012 figure of 6.93pc, this translates into a sequential MoM decline of 0.19 per cent against 0.4 per cent MoM previous month. With the Dec 2012 inflation remaining in single digit, the average inflation of 1HFY13 should further be lower at 8.25 per cent.

Experts said that oil prices remained stable (crude down 0.4 per cent MoM) while domestic petroleum prices (Petrol and Diesel) were down during Dec by 0.4 per cent MoM so far. Even other energy prices, those of gas and electricity, did not show any major increase or decrease during the aforementioned period. Similarly, the SPI indicator suggests food prices were also under control. And, despite all the concerns of the weakness within the economy, the inflation is expected to keep safely below 9 per cent.

And while the CPI headline inflation has been so far favourable in 1HFY13, experts think the price pass-through of a weaker exchange rate may finally take full sweep in coming months ahead. We have already seen Pak rupee (PKR) depreciating against USD and this sentiment is here to stay for a while. This coupled with declining liquid reserves due to higher debt repayments, should keep rupee resilient above 97. AHL analysts have valued rupee at 101 versus US dollar by fiscal year-end.

Experts said that since the onset of FY13, the continual lowering of inflation has kept it in single digits so far. Given 1HFY13 performance, analysts expect CPI inflation for the FY13 to stay under 9 per cent YoY. With the recent stability in international oil prices and lower food prices, they may see headline inflation to below the government target of 9.5 per cent. This coupled with high base-effect carried forward, it is expected the CPI will average out around 9 per cent YoY in FY13.

Telecom companies shift $270m abroad in five months

KARACHI: The telecommunication sector that includes mobile phone operators is counted as one of the most stable sectors of business but $270 million has been transferred abroad from this sector too over the past five months, according to the State Bank of Pakistan (SBP) estimates.

From July to November, 2012, investment in this sector has gone down as more capital has been taken out. Experts said that it is strange that the foreign companies are shifting their capital abroad at a time when the economy of the country is in a shambles.

They say one of the reasons for decline in investment in the telecommunication sector is introduction of shuttering technique in networking system that allows companies to have their signals relayed from one tower instead of installing different towers for different companies.

The dilemma of two PPPs

ISLAMABAD: The Pakistan People’s Party (PPP) with Bilawal Bhutto Zardari as its chairman does not exist in the eyes of law as it is not registered with the Election Commission of Pakistan (ECP) and cannot contest the forthcoming parliamentary polls.

Therefore, the PPP cannot legally apply for and get its favourite election symbol of sword, an official told the News.

Once again, it is set to fight the forthcoming general elections under the banner of the PPP-Parliamentarians (PPP-P), led by Makhdoom Amin Fahim, as it did in 2002 for the first time and then in 2008.

It registered with the ECP as PPP-P prior to the 2002 polls because the PPP being headed by Benazir Bhutto was ineligible to qualify for registration due to its chairperson’s absence from Pakistan. Pervez Musharraf had made it mandatory that the chief of a party, seeking registration with the ECP to qualify for contesting elections, should be present in Pakistan.

The ECP recently issued a reminder to political parties asking them to submit statements of their accounts and certificates about their internal elections to become entitled to allotment of polls symbols before the next electoral race.

The PPP-P is not known to have held intra-party elections. Since day one, Makhdoom Amin Faheem (Commerce Minister) is its president and Raja Pervaiz Ashraf (Prime Minister) its secretary general.

Like the PPP-P, the Awami National Party (ANP) and Pakistan Muslim League-Q (PML-Q) too have not held their internal elections.

“It is obligatory for every party, desirous of contesting elections, to register itself with the ECP under the Political Parties Order 2002,” former ECP Secretary Kanwar Dilshad told The News.

“When I was ECP secretary, President Asif Ali Zardari and Farooq H Naek had expressed their keen desire to register the PPP, but I told them it can’t be done till Zardari is the president of Pakistan because a person in the service of Pakistan can’t be its co-chairman,” he said. “Then, they dropped the idea of registering the PPP with the ECP.”

Dilshad said he further explained to them that the PPP can’t also be registered because its chairman, Bilawal Bhutto Zardari, was under age and was not qualified under the Constitution to fight election to the National Assembly.

He said heads of all parties would have to be eligible to contest national or provincial elections otherwise the ECP would not register their political entities.

After having taken the decision to contest the upcoming polls under the PPP-P (and not PPP) flag, Bilawal continues to be chairman of the PPP, and Amin Faheem remains president of the PPP-P, though totally ineffective, toothless and powerless.

With Bilawal being the chairman and Zardari the co-chairman of the PPP, Senator Jehangir Badr is its secretary general. Although the ruling party will go in the elections under the PPP-P banner, its leaders have never mentioned this party in their campaign and keep on harping on PPP’s name.

The PPP held its last intra-party elections in 2006. The PML-Q carried out the similar exercise in 2009, the Muthidda Qaumi Movement (MQM) and Jamaat-e-Islami in 2012 and PML-Nawaz last year while Pakistan Tehreek-e-Insaf (PTI) is currently going through this process and wants to complete it before the parliamentary polls.

Article 14 of the Political Parties Order-2002 says a party shall be eligible to obtain an election symbol to contest the elections on submission of certificates and statements.

Where any party or a combination of parties, collectively, contravenes the provisions of the Order, it shall not be entitled to the election symbol.

The ECP has made it clear that Allocation of Symbols Order-2002 provides that subject to the fulfillment of the provisions of the Political Parties Order and the rules framed under it, a political party shall make an application to the ECP for allocation of a symbol of its choice within the specified period.

Falling off the pace: Mismanagement of energy crisis derailing the economy

KARACHI: About ten years ago, Pakistan had about 30% stand-by electricity. But ever since then, the country has been facing a power crisis that has – or has the potential – to cripple the economy. The country has faced other such crises since 1974, but none were as severe as this.

Load-shedding has become a routine factor across the country and 8-16 hours is no longer considered an anomaly. The effect on the economy and especially on exports is something that might not be seen right away, but the impact will be severe in coming months as trade figures are revealed.

The circular debt

For many years, transmission and distribution were considered to be the biggest problems. But now, inadequate power generation itself is the biggest factor. From 1970 to the early 1990s, the supply of electricity was unable to keep pace with demand that was growing consistently at 9-10% per annum. In the early 1990s, the peak demand exceeded supply capability by about 15-25%, necessitating load shedding of about 1,500 – 2,000 MW. The present average short fall in the supply demand gap is between 4,500-6,500 MW.

The Final straw

The power crisis has led to multiple factors that have had a negative impact on economic growth. The circular debt and the rising cost of power (due to imbalanced generation mix) are the main factors hampering the national economy. The acute power shortages (ranging from 6 to 16 hours of load-shedding in both urban and rural areas) is forcing the industrial sector to work at under-production level and threatens badly the export performance besides creating social as well as law and order problems in the country.

The final straw has been the month-long power shutdown announced for the textile industry in Punjab, the heartland of the textile cartels and responsible for generating a significant percentage of Pakistan’s exports.The govt says

The stance taken by the government appears to be rational. The government says that it has only shut down power to those industries which have captive power generation capacity, and those which are related to processing, for example weaving, dying or spinning. The government says that it has not shut down power to value added industries, which – and they are right here – is the value-added chain which has the potential to earn more foreign exchange for the country.

Very magnanimous, or so it would seem, but there are just two problems here which the government seems to have missed. The first is the reduction, and in most cases almost non-available gas supply to the industrial areas of Punjab. Most, if not all captive power generation is designed to run on gas, which is no longer as freely available as it was a few years ago. The textile lobby refuses to generate power using furnace oil saying that it affects their ability to keep costs low and stay competitive in the international market. This may or may not be a valid rationale but it is certainly a factor that the government should have taken into account.

The second issue with the policy of shutting down power to the processing sector is that this is primarily a source for the value added sector. By shutting this sector down, the government has effectively crippled the value-added textile sector.

Failing to keep up

Political wrangling over power projects, the inability to generate adequate financing and the lack of support from international donors for projects subject to international disputes has crippled Pakistan. There are many who say that it is not a coincidence that the power to industrial units in Punjab has been cut. It is a PML-N stronghold and they are in the opposition.