Entering the market: Shell to take part in bids for LNG import

Pakistan is going to enter into LNG business at a time when its prices are at higher levels. PHOTO: FILE

ISLAMABAD: 

Shell Pakistan has expressed interest in assisting Pakistan in the import of liquefied natural gas (LNG) and has dismissed talk that the company is winding up its downstream business.

“We have no plan to sell downstream business and shares in Pakistan Refinery Limited,” Shell Pakistan Managing Director Omar Sheikh told The Express Tribune in reply to a question on Wednesday.

Rumours had been doing the rounds for quite some time in the oil industry that Royal Dutch Shell, the parent of Shell Pakistan, was going to wind up its downstream business here like US-based Chevron did.

Speaking to the media about a survey commissioned by Shell Pakistan along with Wim Thomas, Chief Energy Adviser for Royal Dutch Shell, Sheikh said they were also looking at drilling offshore wells, but it depended on the environment in Pakistan.

Shell had drilled an offshore well in 2005, but it dried out. “Technology has improved since and we are again looking at it,” he said.

Saying that the government was going to award Engro a contract for setting up an LNG terminal, he stressed that Shell had been trading LNG and could help the country bring gas. “We hope that the government will invite tenders for LNG supply and we will participate in a transparent way.”

However, he cautioned that Pakistan was going to enter into LNG business at a time when its prices were at higher levels. LNG prices were indexed to crude oil and they could come down if they were not fixed, he said.

Sheikh said Shell was not in the core business of coal, but was involved in coal gasification projects. “Thar coal reserves have not been developed so far and investment in coal depends on economics of such projects.”

Survey findings

In the survey, nine out of 10 Pakistanis surveyed described the cost of energy as the most important issue for them while eight out of 10 considered it critical to have access to adequate energy supplies in the future. Complete survey results were unveiled on the occasion.

“Energy is Pakistan’s primary issue today and at Shell it is important for us to understand what an average Pakistani thinks about the current energy challenges and future solutions. This was why we were so keen to commission this research,” said Sheikh.

A total of 2,020 people were surveyed across six major cities and five rural centres to assess their views on the country’s future pertaining to energy and what their priorities were in this context. The survey was designed and conducted between September and October 2013.

Another highlight of the survey was that in the context of an energy-constrained world, nine out of 10 Pakistanis considered higher unemployment and high energy prices as factors that would have the largest impact on the country, followed closely by energy and food shortages.

At the event, Wim Thomas also presented a recent research publication of Shell titled “New Lens Scenarios”. Shell has been developing scenarios to explore the future and deepen its strategic thinking for 40 years in an effort to help people and policymakers anticipate the future to make better decisions.

This research goes beyond traditional energy outlooks by covering a broader set of drivers and trends in economics, geopolitics, social change and environmental stresses on water and climate. It looks further ahead than comparable analyses – mainly to 2060 for the energy system and also to 2100 for climate implications and renewable energy developments.

“Rich nations should put money and collaborate efforts to provide technologies to under-developed countries to address climate issues,” Thomas suggested and said political, economic and societal choices would be the key to developing available sources and technology for clean energy

Dar allays Afghan concerns over Dasu dam

Pakistan has already approached the World Bank to start the process for the approval of a $700 million loan for the 4,320-megawatt project. PHOTO: FILE

ISLAMABAD: 

Pakistan said on Wednesday that Afghanistan’s concerns over the Dasu hydropower project were misplaced as the proposed project was on Indus River and not on Kabul River as claimed by the neighbouring country.

The issue of Kabul’s objections over Dasu dam was taken up by Finance Minister Ishaq Dar with his counterpart Omar Zakhiwal, who made a telephonic call to Dar.

Finance Minister Dar explained Pakistan’s point of view on the Dasu Hydel Power Project and informed his Afghan counterpart that since the project was on Indus River and not on Kabul River therefore, Afghanistan should not have any reservations on the project, according to an official statement issued by Ministry of Finance.

Zakhilwal promised that he will look into this issue and if Dasu dam was constructed on Indus River then Afghanistan will have no concern, according to the official statement.

According to a story published in The Express Tribune, The National Security Council of Afghanistan had instructed the country’s foreign and finance ministries to convey concerns to the World Bank about Pakistan’s decision to build the power project on Kabul-Indus River in Kohistan district of Khyber-Pakhtunkhwa. It had urged the World Bank and other international organisations to stop its funding.

Pakistan has already approached the World Bank to start the process for the approval of a $700 million loan for the 4,320-megawatt (MW) project.

Afghanistan had claimed that Pakistan neither informed Afghanistan about the project through diplomatic channels nor there was any agreement between the two countries. The Afghan Foreign Ministry called upon all international institutions not to finance and implement the project without the written consent of the Afghan government.

During the telephonic conversation, the Afghan finance minister also shared his country’s desire for early completion of CASA-1000 electricity import project. He hoped for the success of the forthcoming Pakistan-Tajikistan tariff negotiations and said that Afghanistan was eager to provide its help and facilitation for CASA-1000 Project, which will play an important role in promoting relations between the two countries and beyond to the Central Asian Republics.

Both finance ministers also exchanged views on the follow up to the Joint Economic Commission meeting held in Kabul and updated each other on the status of implementation and expressed desire to enhance the economic relations between the two countries

Energy projects: PPP government stays short of targeted spending

Federal auditors consumed 110,000 pages to print 827 audit objections pertaining to the Ministry of Water and Power, indicating the extent of mismanagement and misappropriation of funds. PHOTO: FILE

ISLAMABAD: 

The resolution of chronic energy crisis was never the priority of the previous government, which spent only two-thirds of allocated funds for energy projects in three years, according to accounts presented to parliament’s accountability arm on Wednesday.

Headed by Syed Khursheed Shah of Pakistan Peoples Party (PPP), the Public Accounts Committee (PAC) took a lenient view and settled appropriation accounts pertaining to three financial years of the PPP government.

The accounts had been brought before PAC to highlight lax planning on part of the Ministry of Water and Power, Ministry of Planning and Development and Ministry of Finance.

Federal auditors consumed 110,000 pages to print 827 audit objections pertaining to the Ministry of Water and Power, indicating the extent of mismanagement and misappropriation of funds.

According to the accounts, for financial years 2009-10 to 2011-12, the previous government had earmarked Rs118 billion for various schemes. However, actual spending stood at Rs75.5 billion while rest of the money was not released to the ministry.

In fiscal year 2009-10, an amount of Rs52.5 billion was allocated but actual spending remained at Rs29.5 billion. In 2010-11, Rs30 billion was allocated but Rs19.3 billion was spent and in 2011-12, Rs35.5 billion was earmarked while actual spending was Rs26.7 billion.

In the first year, 78 projects were affected due to shortage of funds, in the second year 27 projects and in the third year 33 projects, according to the auditors.

Because of financial constraints, the allocated budgets were not released to the Ministry of Water and Power, a representative of the Ministry of Finance told PAC.

PAC member Rana Afzaal of the PML-N suggested that officials responsible for the financial mismanagement should be taken to task – a proposal that the PAC chairman did not accept.

Auditor General of Pakistan Akhtar Buland Rana said the huge unspent amounts showed lack of planning on the part of ministries concerned and the purpose of bringing the accounts to PAC was to show how the affairs were run without proper planning.

Projects like electrification of villages, building capacity of Thar coal project, small and medium-sized dams and feasibility studies of water projects could not be completed on time due to delay in disbursement of funds, showed the documents.

The PPP government had been struggling to cope with prolonged power outages and tried to tackle shortages through expensive rental power projects. PAC members observed that due to lower allocations, the cost of these projects had significantly increased.

Those who were part of the ruling party were also sitting in the room and ready to respond.

“The Public Sector Development Programme (PSDP) (was) based on assumption of revenues and the other reason to allocate funds more than the resources is that respective governments like to show big allocations for development projects,” said PAC member Syed Naveed Qamar.

Qamar was one of three water and power ministers during the five-year tenure of the PPP government. He had stepped into Raja Pervaiz Ashraf’s shoes. He argued that floods also forced the government to divert funds from development projects.

The practice of setting big development budgets was not unique to the PPP, the current PML-N government also allocated Rs540 billion for federal development projects. Now, it has decided to cut it to Rs425 billion and indications are that actual spending will be far below the revised figure, according to officials of the Ministry of Planning.

Privatising options for PIA

The writer has served as Director of Administration in PIA

Prime Minister Nawaz Sharif, this week, approved a plan for PIA’s revival to bring it to a break-even level within a year. Last year, the secretary of aviation instituted a ‘way forward’ committee to salvage the national carrier. In the backdrop is the government’s written undertaking to the IMF to privatise 26 per cent of PIA’s shares.

Going beyond the laments of grievances of political interference, rupee depreciation and rising fuel costs, all of which are true, it may be useful at this juncture to divert attention towards how privatisation can be used to restructure PIA and minimise its endemic corruption.

There have been many previous government bailouts, which were made ineffective because instead of using such emergency cash injections for restructuring, the funds were utilised for continuing running expenses. The focus of overhauling strategies remains on fuel efficient airplanes, oil consumption audits and fleet operating options; hence, numerous other nodes haemorrhaging the airline get overlooked.

Ancillary services should be the first on the block for privatisation. Pilferages in these sectors inflate cost by more than 50 per cent and huge kickbacks are involved. The flight kitchens, motor transport and stores and purchase departments are hotbeds of corruption and should be immediately given to private firms. Vested interests have been strong enough to ensure efficiency audits and cost-benefit analysis are not conducted. As a case in point, where else can this happen that garbage collectors pay PIA to allow them to collect its garbage? These are lucrative contracts because with complicity of insiders, unused things worth millions are thrown for the garbage collectors to resell on the market. For instance, hundreds of kilos of ice-packed seafood delivered early morning gets thrown into trash by noon and enters the market by early evening. Similarly, huge amounts of fresh produce, chicken, meat and crates of bottled mineral water are tossed into the trash as being ‘expired’ and are then resold. Privatising PIA’s vigilance department, where people earn significant amounts to look the other way, would be an important corrective measure.

Crucially, recruitment should also be privatised. PIA does not need more than 8,000 people but has over 20,000 of them. Salary bills used to be 17 per cent of the revenue –– now they are about a quarter. In absolute terms, employees were paid Rs9 billion in 2003, and the figure has jumped to over three times that amount to Rs28 billion. Most of the employees are deadwood as their jobs are treated as a handout for political gratification. A private firm should be contracted to solicit candidates and then pass on the three best options for PIA to choose from. Most people balk at retrenchment because of political implications. PIA can still bring in a tough negotiator for the unions, but first it must take the public on board.

Malpractices are not individual illegal acts but a systemic dysfunction. For instance, PIA has few assets and pays rent for everything. It has been renting its head office at Karachi airport from the Civil Aviation Authority since 1955. In the billions paid, it could have purchased its premises 10 times over by now. The same is with all its sales offices across the country. Again, PIA rents and runs dozens of medical centres to provide health services for its staff. Over a decade ago, as director of administration, I had suggested setting up a single PIA hospital on a build-operate-transfer basis and doing away with rentals, but the proposal was refused consideration. This reaction mirrored my suggestion of setting up an IPP, considering the millions spent on electricity bills.

For allowing the private sector to take over these functions, PIA’s by-laws would have to be changed. Certain facilities cannot and should not be privatised. Aviation must be retained because of the sensitivity of precision engineering, air force and national-asset involvement. Along with aviation, ticketing, sales, marketing, accounts management and administration are the only things that should be retained by PIA.

Innovative suggestions can produce out-of-the-box approaches. What PIA is facing foremost is a leadership crisis. It does not need aviation experts at the helm, but superb management. This can be done if the political leadership is serious.

For French buyers: Envoy puts a face to Pakistani products

Says fabric, furniture, fish, rice, mango products have a huge market in France. PHOTO: FILE

ISLAMABAD: 

For Ghalib Iqbal, the Pakistani Ambassador to France, it is a logical conclusion — more visibility of Pakistani companies in the European market will lead to more business opportunities.

“The more you are seen, the more you are bought,” Iqbal told The Express Tribune during a telephonic interview from Paris, where he has been posted since February 2013.

From fisheries to fashion and furnishing new passports, the ambassador discussed the future prospects of Pak-French bilateral relations, the needs of Pakistanis living abroad and the avenues for trade enhancement during the conversation.

Improving Pakistan’s international trade is also the first of two instructions Prime Minister Nawaz Sharif issued to Pakistani missions abroad after coming to power in the May 2013 elections.

‘More visibility’

The “more visibility” strategy would work because European buyers want to “put a face to the exporter,” Iqbal said.

With France, Pakistan is already in a strong bilateral trade relation: rough estimates put the 2013 trade volume at $1.352 billion, up at least 14 per cent from 2012 figures, with the trade balance in Pakistan’s favour.

This Pak-France trade volume is expected to increase in 2014, Iqbal said, with the European Union’s Generalised System of Preferences (GSP) Plus status, which recently allowed Pakistani companies duty-free access to the European market.

But in order to capitalise on this opportunity, Pakistani companies need to maintain quality control and improve their marketing techniques, according to Iqbal.

Last year, during a Pakistani mango festival in France, the Pakistani embassy took a new approach and sent boxes of mangoes to the top ten chefs in France. “One of the chefs ended up using the Pakistani mangoes for his recipes,” Iqbal said.

It was a modest success that has given the embassy confidence to apply the same tactic to rice exports.

Rice et al

Pakistani rice, arguably one of the finest rice varieties in the world, was mostly bought by first-generation Pakistani immigrants in France to use in South Asian restaurants.

The embassy is trying “to market it differently to increase exports,” Iqbal said. He said the new target audiences are “people outside the Pakistani community and high-end French restaurants.”

There is also the untapped potential in the export of Pakistani seafood, especially shrimp. At present, only two Pakistani companies have EU clearance to export seafood to member states.

Iqbal indicated that Pakistan can use French technological help to improve its marine farming and packaging processes.

“We need to get some training, and France can provide it,” the envoy said. “If we can package seafood hygienically and improve processing, there is huge market in Europe. We need to religiously concentrate on this sector.”

Furniture and fashion

Furniture and fashion are two other neglected areas in which Pakistani companies and artists are skilled and the embassy is trying to help them achieve marketing expertise to attract French buyers, Iqbal said.

“All we need to do is to be more adaptable to international standards,” he said.

In foreign lands, adaptability is also a social issue. The ambassador said embassy officials urge the Pakistani expat community to get involved in the French mainstream. “The community can be very valuable in building bridges between Pakistani and French cultures,” he said.

Hosting the community

With over 100,000 Pakistanis living in France and some 1,138 Pakistani students studying there, Iqbal said the welfare of overseas Pakistanis is the second instruction premier Sharif issued.”For people who visit the embassy, the first thing we do is to show them the utmost respect and offer professional services that are at least at par with French offices,” he said.

One problem the embassy is facing in timely service delivery is due to the centralised issuance of new machine-readable passports, which are printed in Islamabad and then sent to Paris. Consequently, even people who have paid the “urgent” delivery fee have to wait longer to get their passports.

“I feel this is not fair,” Iqbal said. He suggested a mixed system where the approval is centralised but printing is decentralised so embassies can quickly print passports and deliver them to the Pakistani nationals.

The country’s reputation is considerably positive among French businesses that have worked with Pakistani companies, Iqbal said, but it is still a matter of uncertainty for French companies that have not.

Future target

With a personal target of increasing bilateral trade by 35 to 40 per cent during his assignment tenure, Iqbal said the embassy’s commercial section is ready to put Pakistani companies in touch with French buyers.

In February, 23 local companies and seven individuals represented Pakistan at the TexWorld Paris exhibition — one of the largest textile trade fair in the world. If such participation is supported by better promotion, consistency and quality, Pakistan’s exports are bound to rise, Iqbal said.

“Pakistani exporters should get in touch with European buyers at least three to four months prior to an exhibition, so the buyers can also learn about them,” Iqbal said. “The Pakistani business community needs to come out in big numbers and be well-prepared.”

PPIB, ANC sign memorandam for constructing coal-fired plants in Gadani

PPIB MD NA Zuberi signs the MoU with Vice Chairman and CEO of ANC Faris Tayeb Abdul Rahim Al-Baker while the Prime Minister and minister for water and power watches. PHOTO: PID

ISLAMABAD: Private Power and Infrastructure Board (PPIB) and the Arab National Construction (ANC) holding LLC Dubai signed an MoU on Wednesday for the construction of two coal fired power plants of 660 mega watts each (1,320 MW combined) in Gadani.

The signing ceremony was witnessed by prime minister Nawaz Shareef himself.

Signed MoU also extends to the construction of a jetty in the Pakistan Power Park at Gadani. The project is expected to bring in almost $2.5 billion investment in Pakistan and will be completed in three years.

The memorandum was signed by Vice Chairman and CEO of ANC Faris Tayeb Abdul Rahim Al-Baker and Ministry of Water & Power & Arab National Construction PPIB NA MD Zuberi with Prime Minister Muhammad Nawaz Sharif and ANC Chairman Tayeb Abdul Rahim Ahmed Al-Baker in attendance. Minister for Water and Power Khawja Muhammad Asif, Minister of State for Water and Power Abid Sher Ali, Secretary Water and Power Saifuallah Chatta, and other officials were also present at the ceremony.

Earlier, the ANC delegation led by its chairman Tayeb Abdul Rahim Ahmed Al-Baker called on the prime minister at the PM House.

Nawaz appreciated the investment by ANC in Pakistan and said that it will help the country overcome energy shortages.

The premier said that his government has prioritised the energy sector as priority and have planned 10 coal fired projects of 660 MW each in the Pakistan Power Park. Of these projects, six will be built by the Chinese, two will be constructed by ANC Dubai and one project has been initiated by the government.

In addition to the Power Park, Pakistan is seeking investment for a number of short and long term power projects including two 660 MW coal-fired power plants at Port Qasim, 12 coal based 660MW power plants at Sahiwal and five other locations in Punjab Province. The government also intends to start coal mining in Thar and set up mine-mouth power plants in Sindh Province. Not to be left behind the government is also looking to set up a 1,000MW solar power park in Punjab, a 1,420 MW hydel power house at tunnel IV of the Tarbela Dam and a 1,310MW hydel power house at tunnel V of the Tarbela Dam

Detail On Batman: Arkham Knight

Yesterday we saw the awesome trailer for the Batman: Arkham Knight which is said to be the "Final Chapter" of the awesome Batman Video game series.

Well, this new game will feature all the usual suspects including Two-Face, Penguin, Harley Quinn, Scarecrow and others but this time The Dark Knight will be facing a new and formidable foe named The Arkham Knight. 

Game director Sefton Hill said. "We wanted to introduce someone who could really challenge Batman to go head to head with him in lots of different ways. We're not talking about those ways just yet but this guy is definitely a formidable foe for Batman."

The Gotham we see in "Arkham Knight" will be even bigger than the previous versions, taking place on three different islands throughout the city which the developer says is five times larger than "Arkham City."

"As we've said before with Arkham City, it's not about scale as much as detail," Hill said, "We want to make sure the world is rich and full of interesting things to do. We're not trying to create the biggest open-world game ever. We are trying to create a really rich, vibrant, dense open world."

The Batmobile is the biggest addition to the gameplay of "Arkham Knight," and Rocksteady wasn't shy about their ambitions for it.

"We wanted to make the best car in any game ever," Hill said. "That was our mission statement right from the start."

With the push of a button, fans will be able to summon the Batmobile to their location in order to speed off into the night. Not only will the Batmobile provide convenient transportation, but it will also serve as the basis for many of the Riddler's challenges in the new title.

No sequel to "Arkham Asylum" and "Arkham City" is complete without the man himself, and GameInformer has confirmed that Kevin Conroy will indeed return to voice the Batman in the upcoming final chapter.

Batman: Arkham Knight will debut on Playstation 4, Xbox One, and PC this October.