India furious after female diplomat is strip-searched

A U.S. embassy security guard (L) and an Indian policeman stand in front of the main gate of the embassy as the bulldozer (unseen) removes the security barriers, in New Delhi December 17, 2013. PHOTO: REUTERS

WASHINGTON: US law enforcement officials admitted Tuesday that a female Indian diplomat was strip-searched after she was arrested last week, in a case which has sparked anger and fierce reprisals from India.

Amid a growing row, New Delhi is taking a series of measures against US diplomats in the country after the arrest on Thursday in New York of deputy consular general, Devyani Khobragade.

India has denounced her arrest while she was dropping her children off at school as “humiliating.”

She was detained for allegedly underpaying her domestic helper who is also an Indian national and for lying on the helper’s visa application form.

State Department deputy spokeswoman Marie Harf admitted it was a “sensitive issue” but insisted it was a “separate and isolated incident” which should not “be tied together” and allowed to affect broader US-Indian ties.

As a consular official, Khobragade does not have full diplomatic immunity, but has consular immunity which “only applies to things done in the actual functions of one’s job,” Harf added.

Asked whether Khobragade was strip-searched, the US Marshals Service (USMS) replied “yes,” adding that she “was subject to the same search procedures as other USMS arrestees held within the general prisoner population in the Southern District of New York.”

It confirmed that Khobragade was also held in a cell with other female detainees, amid claims she had been detained with drug addicts.

“Absent a special risk or separation order, prisoners are typically placed in the general population,” the Marshals statement said, adding she had been put in an “available and appropriate cell.”

Harf confirmed that she had been arrested by the State Department’s diplomatic security office, but had then been handed to the US Marshal Service which had been responsible for processing her case at the federal courthouse.

Khobragade was released on a bond the same day, and the Marshals said that after a review of her case they had found that the service had “handled Khobragade’s intake and detention in accordance with USMS policy directives and protocols.”

“Thus far all indications are that appropriate procedures were followed. But nonetheless… we understand this is a very sensitive issue, and we’re continuing to review exactly what transpired,” Harf told journalists Tuesday.

But the Indian government retaliated by ordering a range of measures including the return of identity cards for US consular officials that speed up travel into and through India, New Delhi foreign ministry sources said.

Indian security forces also removed barricades outside the US embassy in New Delhi, raising fears for the safety of personnel.

Harf urged the Indian government to uphold all its obligations to protect US diplomats in the country.

“Obviously the safety and security of our diplomats and consular officers in the field is a top priority. We’ll continue to work with India to ensure that all of our diplomats and consular officers are being afforded full rights and protections,” she said.

Harf also revealed that the State Department had written to the Indian embassy back in September to warn them “of allegations of abuse made by an Indian national against the deputy consular general of India in New York.”

The case is the latest involving alleged mistreatment of domestic workers by wealthy Indian families. Many are poorly paid in India and rights groups regularly report cases of beating and other abuse.

“The United States and India enjoy a broad and deep friendship, and this isolated episode is not indicative of the close and mutually respectful ties we share,” Harf said in an earlier statement.

JF-17 planes 'open new doors' for Pakistan China friendship

Nawaz attends inauguration event for the completed production of 50 JF-17 aircraft. PHOTO: ONLINE

ISLAMABAD: Prime Minister Nawaz Sharif paid a visit to Pakistan Aeronautical Complex (PAC) Kamra for briefings on the exports of the Pakistan Air Force’s aircraft, the JF-17 Thunder, Express News reported on Wednesday.

Nawaz was the guest of honour at the inauguration event for the roll out ceremony of the 50th JF-17 aircraft. The event was attended by delegates from China as well as the PAF.

Speaking at the end of the inauguration, the premier appreciated China’s efforts to help Pakistan manufacture 50 JF-17s and also commended the bravery of the Pakistan Air Force.

“Pakistan’s skies are safe due to the efforts of the Pakistan Air Force”, Nawaz said.

Furthermore, he said the last time this project was supposed to be launched, the PAF met with political hurdles which the PML-N government had cleared.

During his speech Nawaz also stated that the inauguration of the planes is a means to “expand the friendship between China and Pakistan.”

Nawaz also reflected on the past joint ventures that Pakistan and China invested in together which include the Karakoram Highway, Chashma Power Plant and the Karachi Civil Nuclear Plant.

Concluding the speech, Nawaz said “We will fulfill all the needs of the Pakistani Air Force”.

The PAC JF-17 is a light weight, single engine, and multi combat aircraft which has been developed by the Pakistan Air Force, the Pakistan Aeronautical Complex (PAC) and the Chengdu Aircraft Industries Corporation (CAC) of China.

The aircraft is 15 metres long and is said to be able to tackle all kinds of weather.

Still in business: 3m textile workers to remain employed in winter, says APTMA

APTMA Punjab Chairman said uninterrupted gas supply would help increase textile exports by $1 billion every month. PHOTO: FILE

LAHORE: Some three million textile workers will continue to work during the next three months due to the federal government’s decision to supply 100 million cubic feet of gas per day (mmcfd) to the textile industry in Punjab, said All Pakistan Textile Mills Association (Aptma) Punjab Chairman S M Tanveer.

In previous years, the Punjab-based textile industry would have had no option but to lay off workers during three months of winter due to suspension of gas supply, he said at a press conference on Wednesday.

Praising the decision of the federal government, Tanveer said each and every worker of the textile industry was acknowledging the support given by the prime minister and the chief minister of Punjab.

The government has decided to divert 85 mmcfd of gas to industrial units from independent power producers (IPP) in order to enable the textile industry to capitalise on the advantages from the recently granted GSP Plus status by the European Union.

According to Aptma, they already have reduced their demand to 100 mmcfd to allow other industries to have a share in the gas quota.

He said the Aptma leadership has held detailed meetings with Sui Northern Gas Pipelines Limited (SNGPL) to chalk out a strategy for gas supply to the textile mills in the next 90 days.

Tanveer said uninterrupted gas supply would help increase textile exports by $1 billion every month. This huge inflow of foreign exchange would stabilise the Pakistani rupee in line with the announcement of Federal Finance Minister Ishaq Dar, he said.

Tanveer appreciated the efforts made by Chief Minister Shahbaz Sharif in putting forward the case of Punjab-based textile industry to the federal government.

Strong fundamentals: With low coal prices, cement sector’s prospects look bright

Prices in southern zone (Sindh and Balochistan) have reached Rs520-525 per 50kg bag while prices in northern zone (Punjab and K-P) have jumped to Rs495-500. PHOTO: FILE

KARACHI: 

The continuous increase in cement prices has surely irritated the consumers but it has made cement stocks more attractive on the Karachi bourse.

Cement sector in Pakistan is one that enjoys strong fundamentals but its prospects are also bright because of low international coal prices, increase in cement prices and stable sales.

Analysts suggest that investors’ interest in cement stocks is primarily because of the expected increase in margins of cement companies owing to the recent jump in retail prices.

Summit Capital analyst Sarfaraz Abbasi believes that apart from the continuous increase in cement prices, what is important is that the outlook of cement sector is positive because of expected high expenditure on big projects by the government.

Cement prices have gradually moved up in the last three months. Prices in southern zone (Sindh and Balochistan) have reached Rs520-525 per 50kg bag while prices in northern zone (Punjab and K-P) have jumped to Rs495-500.

Cement prices, in the southern zone, shot up from Rs500-502 per bag in the third week of September, an increase of 4% in almost three months.

Traditionally, cement prices in the northern zone remain low compared to the southern zone owing to better supply since over 80% of the cement is being produced in Punjab and Khyber-Pakhtunkhwa.

Cement companies say prices of inputs have jumped sharply following the electricity price hike for the industrial sector in August this year and hence the increase in cement prices for the consumers.

Last year, domestic cement sales stood at 25 million tons while exports were nine million tons. Analysts are predicting that local sales will surpass last year’s record levels due to high allocations for the Public Sector Development Programme (PSDP) for which the government has set aside  over Rs530 billion in the budget for fiscal year 2013-14.

“Both domestic dispatches and exports are expected to increase by the end of the year,” Abbasi said. “Cement exports through sea will particularly increase owing to an expected jump in Pakistan’s exports to Gulf countries.”

He added cement exports through sea in the first five months (July-November) of FY14 have already jumped by a sharp 15% to 1.61 million tons from 1.39 million tons in the same period of FY13.

Lucky Cement, the largest cement maker with over 18% market share, has seen a big jump in its share price in the last three months. Its stock closed at Rs292.34 on the KSE on December 18 compared to Rs241.5 on September 18, a rise of 21%.

The stock price of Pioneer Cement – a second-tier company – has enjoyed a jump of 31% from Rs28.81 to Rs37.75 during the same period.

The broader picture shows a brighter story for the cement sector. It has already outperformed the KSE 100-Share Index in the current calendar year and is expected to post over 75% return compared to 49% for KSE-100.

WB suggests enhanced gas supply to power plants

Four power plants had been forced to stop operations because of absence of gas. PHOTO: FILE

ISLAMABAD: 

The World Bank has asked Pakistan that it should enhance gas supply to power plants to pave the way for loans to power projects and reduce mounting circular debt, a suggestion that comes at a time when the government is diverting gas from power producers to industrial units.

A World Bank mission, during a visit to Pakistan, asked the authorities to provide more gas to the power producers, which would reduce generation cost and curtail circular debt that had again swelled to Rs225 billion, sources say.

If gas supply is increased, the country will also qualify for World Bank’s project loans for power plants.

The International Monetary Fund (IMF) had also pressed for boosting gas production in the country. In response, the government assured the lender that it would add 200 million cubic feet per day (mmcfd) to the national grid by the end of December this year, but the plan seemed to have fallen through.

According to sources, the World Bank has also asked Pakistan to phase out power subsidies. The government has already raised power tariff for domestic and other consumers, but the bank wants to see more tariff increase or enhanced gas supplies to power plants to slash the generation cost.

Independent Power Producers (IPPs) Advisory Committee Chairman Abdullah Yousuf toldThe Express Tribune that inter-corporate debt of the power sector stood at Rs225 billion, of which IPPs had to receive Rs150 billion.

He claimed that four power plants had been forced to stop operations because of absence of gas as the Economic Coordination Committee (ECC) diverted supplies from Rosh Power Plant to the industrial units. “Now, gas-fired power plants have almost been shut down.”

He cautioned that very soon hydroelectric power generation would come down to 1,000 megawatts compared to existing 3,500MW due to closure of canals for annual maintenance. In this situation, the government would be forced to operate gas-fired plants on high speed diesel, leading to further piling up of circular debt.

Acknowledging the government’s efforts to curtail the circular debt by increasing power tariffs whose impact would be reflected later, he said this was only a single step and some other measures were needed to arrest the rising debt.

He cited slow bill recoveries and high power losses, saying the government had not undertaken significant steps and failed to stop the circular debt from growing.

According to sources, state-run oil marketing giant, Pakistan State Oil, is in trouble as its receivables from different sectors including power plants have surged to Rs139 billion. Of this, Wapda owes Rs81.46 billion, Hubco Rs28.6 billion, PIA Rs7.12 billion and KESC Rs9.9 billion

Divestment: Majority shareholder in Meezan Bank to sell stake

Other major shareholders in Meezan Bank include Pakistan-Kuwait Investment Company (30% stake) and Islamic Development Bank (9.3%). ILLUSTRATION: TALHA KHAN

KARACHI: 

Kuwait-based Noor Financial Investment Company is going to sell its entire stake in Meezan Bank, according to a notice sent to the Karachi Stock Exchange (KSE) on Wednesday.

The value of the transaction is estimated to be $190 million, the notice said.

With 492.4 million ordinary shares constituting 49.1% of the bank’s capital, Noor Financial Investment Company is currently the majority shareholder in Pakistan’s largest Islamic bank.

Other major shareholders in Meezan Bank include Pakistan-Kuwait Investment Company (30% stake) and Islamic Development Bank (9.3%). Free-float of the bank constitutes 10% of its total shareholding structure.

The announcement follows the public expression of interest by a British Virgin Islands-based company in acquiring an equal number of shares in Meezan Bank on November 19.

Through KASB Securities, a Karachi-based investment bank, Vision Financial Holdings had expressed its intention to acquire 492.4 million shares in Meezan Bank, which has issued a little over one billion ordinary shares at the face value of Rs10 each.

As per the Substantial Acquisition Law 2002, a potential acquirer must issue a public offer to the shareholders if it tries to acquire 25-50% holding in a company.

Most analysts, while speaking to The Express Tribune at the time of the public expression of interest by Vision Financial Holdings, said the transaction would be carried out in two phases. They expected that the foreign company would first try to buy stakes from the current sponsors of the bank and follow it up with a tender offer made to the general public on the stock exchange.

However, the acquirer is going to get the exact number of shares that it wanted to purchase through the current majority shareholder, which means the transaction will not have a public offer component.

According to Alternate Research investment analyst Umesh Kumar, the transaction value ($190 million) translates into a per-share price of approximately Rs41. This represents a premium of 6.5% to the bank’s share price, which was Rs38.5 on November 18 – one day before Vision Financial Holdings announced that it wanted to acquire a significant stake in the largest Pakistani Islamic bank.

The transaction will not have any material impact on the bank’s share price because it is not followed by a public offer, Kumar added.

The share price of Meezan Bank was Rs39.16 at the end of trading on Wednesday. It has increased by 28.6% since July 1 when it traded at Rs30.45 a share. For the quarter ended September 30, the bank posted a profit after tax of Rs943.9 million, up 15.2% from the corresponding period last year.

A shell company

The purpose of maintaining a company’s registered office in places like British Virgin Islands or Cayman Islands is to ensure confidentiality of its sponsors’ identity besides benefitting from lenient and nearly tax-free corporate regulatory framework.

Although Vision Financial Holdings remains an obscure company with no information trail on the internet, sources said the company is associated with Vision Holding Middle East, which is also a British Virgin Islands-based shell company.

The latter increased its shareholding in Punjab-based Pioneer Cement to 47% in August as opposed to a 21% stake it had in 2012.

Vocational education: ADB stops loan for $23m Balochistan project

“The project was too ambitious and complex for an underdeveloped area with difficult socio-economic conditions,” reads the evaluation report. PHOTO: FILE

ISLAMABAD: 

A $23 million project launched to revamp the technical and vocational education system in the most underdeveloped province, Balochistan, has failed to make a difference due to differences between the provincial government and the Asian Development Bank (ADB) over a set of reforms.

An independent evaluation report, prepared by ADB’s Manila office, highlighted the reasons that are almost common in every project funded by international lenders.

The ADB had approved “Restructuring of the Technical Education and Vocational Training System Project” for Balochistan at an estimated cost of $23 million. The Manila-based agency had to provide a $16 million loan, but disbursed only $4.04 million due to poor performance of the borrower and the lender’s country office. Interestingly, most of the expenditures were made on procurements.

The ADB had to prematurely terminate the loan due to extremely poor progress.

Ismail Khan, spokesman for the ADB’s country mission, said the project had been financed from a concessional financing facility, thus carried no commitment charges on the undisbursed amount.

“The project was too ambitious and complex for an underdeveloped area with difficult socio-economic conditions,” reads the evaluation report. In short, the project was irrelevant and ineffective.

The performance of both the ADB and the Balochistan government was termed “less than satisfactory”.

The project had been designed to address serious socio-economic problems like low education level, high unemployment and high poverty in the most underdeveloped federating unit that was also facing problems of insurgency.

The project’s aim was to create a vocational training system to produce graduates with skills that would help them get employment. The targeted population mainly comprised women and those from rural areas of the province.

The project was supposed to establish two polytechnic schools – one for men and one for women – and three training centres for women. However, none could be established as provincial authorities awarded contracts at three times the estimated cost, leading to their cancelation.

Consultants for the project could not be hired after the ADB’s Office of Anticorruption and Integrity rejected the shortlisted firm due to serious concerns.

The evaluation department noted that the project had many shortcomings due to poor design and overambitious reforms. The project design heavily relied on private sector cooperation without realising the lack of a vibrant private sector in the province.

Even the local ADB office and the Balochistan government were not on the same page. The ADB office had been pushing to bring structural changes including changing the curriculum and management of the technical education and vocational training system. The government, however, was more interested in improving infrastructure and equipment to strengthen its technical education network.

The allocation of resources was also unequal, as more money was allocated for procurements. The ADB also left loopholes, as the project design called for the construction of facilities that duplicated those funded by other donors or facilities that already existed, the report revealed.

The training, conducted by a construction company for technical education and vocational training institutions, was of low standard and lacked a suitable perspective for medium and long-term development planning.