Pakistan to ink initial deal on CASA power import project

Casa-1,000MW project will help Pakistan get cheaper and cleaner energy to minimise electricity shortages. PHOTO: FILE

ISLAMABAD: Pakistan and countries participating in the US-backed Casa-1,000 megawatt (MW) project are set to sign the initial deal in Istanbul, Turkey.

Sources told The Express Tribune that State Minister for Water and Power Abid Sher Ali and additional secretary left for Istanbul on Thursday to ink the deal.

“Pakistan, Afghanistan, Kyrgyzstan and Tajikistan are to sign different agreements on financial, technical and legal matters,” sources familiar with the development said. “This will be followed by a deal in Washington on the Casa-1,000MW power import project.”

According to sources in Tajik Embassy, the Casa-1,000MW power import project will help Pakistan get cheaper and cleaner energy to minimise electricity shortages and build close economic relations with neighbours Kyrgyzstan and Afghanistan. They said that the project was feasible despite the law and order situation in Afghanistan, and will help demonstrate its viability as a transit country linking the two regions.

Among other sectors of the economy, the energy sector of Tajikistan had showed sustainable growth in the last 15 years. During this period, hydro energy generation has remained stable. In addition to big plants, sources said that there were also 20 medium and 40 small hydro stations in the remote areas, with capacity ranging from 5 kilowatt (kwt) to 1,500kwt.

Tajik embassy said that the country was the world’s third largest producer of hydroelectric power after the US and Russia. Hydroelectric generation accounts for 76% of the total energy output in the country. In Pakistan, the rate for firm energy is 13.2 US cents per kilowatt hour (kWh) and the rate for non-firm is 9.2 cents per kWh, while the generation cost in Afghanistan is estimated to be at least 6 cents per kWh based on the provided information. The economic analysis shows that the level cost of transmission is calculated at 4.97 cents/kWh.

The total estimated cost of the project is $1.160 billion, which would be financed by the World Bank and Islamic Development Bank (IDB).

MOL completes work on $225m gas processing plant

So far, six discoveries have been made in the block, the first in 2002 and the most recent in 2011. PHOTO: FILE

ISLAMABAD: MOL Pakistan has announced that its joint venture in Tal block has completed work on Makori gas processing plant at a cost of $225 million, which will immediately start producing 300 tons of liquefied petroleum gas (LPG) per day.

“This new addition will take MOL’s production in the country to 300 million cubic feet (mmcf) of gas per day, 21,000 barrels of oil and condensate per day and 300 tons of LPG,” Alexander Dodds, Executive Vice President of MOL Group, said in a meeting with Prime Minister Nawaz Sharif here on Wednesday.

Dodds was leading a high-level delegation of the group in the meeting. Federal Minister of Petroleum and Natural Resources Shahid Khaqan Abbasi, Minister of State Jam Kamal Khan and MOL Oil and Gas Company Political Adviser Ali Murtaza Abbas were present.

Appreciating the investor-friendly petroleum policy of Pakistan, Dodds suggested that the government should look at other avenues in the petroleum sector including shale gas exploration.

The completion of Makori plant will make MOL the second largest producer of oil/condensate and LPG and fourth largest producer of gas in the country. Tal joint venture has so far invested around $1.4 billion in Khyber-Pakhtunkhwa.

Petroleum Minister Shahid Khaqan Abbasi said MOL worked with both federal and provincial governments and the local community in an exceptionally professional manner. He asked the prime minister to inaugurate the gas processing facility soon.

Federal Petroleum Secretary Abid Saeed asked MOL to step up exploration activities and enhance investment and welcomed the increase in the company’s rig operations, which rose from two rigs to four.

Tal block has been jointly explored and developed by MOL, Pakistan Petroleum Limited, Oil and Gas Development Company, Government Holdings Private Limited and Pakistan Oilfields Limited.

So far, six discoveries have been made in the block, the first in 2002 and the most recent in 2011.

Commercial production has started from five of the discoveries – Manzalai in 2005, Makori in 2006, Mamikhel in 2010, Maramzai in 2011 and Makori East in 2012. Tolanj discovery is under appraisal.

The increase in production has coincided with the completion of MOL’s 15th year in Pakistan. With the completion of the new plant, the company’s daily production has increased by 30 mmcf of gas, 7,500 barrels of crude oil/condensate and 300 tons of LPG.

First phase: Hascol Petroleum’s IPO receives positive response

Hascol Petroleum sells POL products through a network of 210 fuel stations across Pakistan. It plans to add another 50 retail outlets by the end of this year. PHOTO: FILE

KARACHI: 

The first phase of the initial public offering (IPO) of Hascol Petroleum has concluded with as many as 1,191 bidders taking part in the book-building portion, which was oversubscribed by more than seven times.

The capital issue of the oil marketing company consists of 25 million ordinary shares – or 27.6% of the company’s post-issue paid-up capital – with a face value of Rs10 each. The book-building portion, which took place on March 4 and 5, comprised 18.7 million ordinary shares, or 75% of the total issue size, at a floor price of Rs20 per share.

Institutional investors and high net worth individuals submitted bids of 132.5 million ordinary shares as opposed to 18.7 million shares that were up for grabs, which reflects the overwhelming response that the year’s first IPO has received.

Hascol Petroleum sells POL products through a network of 210 fuel stations across Pakistan. It plans to add another 50 retail outlets by the end of this year.

Speaking to The Express Tribune on Thursday, AKD Securities Head of Investment Banking Umair Aijaz said the offer’s book runners have determined the cut-off/strike price of Rs56.5 per share. The strike price was calculated through the Dutch Auction Method, an auction structure in which the price of the offering is set after taking all bids and determining the highest price at which the total offering can be sold.

AKD Securities is the book runner as well as joint lead manager and arranger to the issue along with Avais Hyder Liaquat Nauman Chartered Accountants.

“The response received from institutional investors and high net worth individuals is according to our expectations. We believe the general public will also participate in the IPO equally enthusiastically,” Aijaz said.

Referring to the remaining 25% of the total issue size, Aijaz noted that the public subscription will be held in either the last week of March or the first week of April. This means roughly 6.2 million ordinary shares will be issued to the general public at the rate of Rs56.5 per share – the price that has been determined during the book-building exercise.

The objective of the issue is to inject additional equity into the company for the completion of Machike storage facility in Sheikhupura and for setting up new retail outlets across Pakistan. About Rs200 million raised through the IPO will be spent on the storage facility while Rs100 million will be used to set up and commission new/under-construction retail fuel stations. Additional money will be utilised in meeting working capital requirements of the company.

Aijaz said Hascol Petroleum has managed to stay away from circular debt, which reflects well on the investment prospects from a retail investor’s point of view.

He said the company does not offer any unsecured credit (other than Rs250 million allowed to its franchise retail outlets). Moreover, its debt mainly comprises of fuel oil supplied to IPPs against irrevocable bank guarantees because of which the company has nothing to do with the circular debt issue.

The company’s profit after tax in fiscal 2013 was Rs392 million. It increased at an annualised rate of over 40% during the last four years.

Dent in revenues: Govt admits to revising tax target downwards

The reduction in tax collection target will dent the government’s efforts to increase Tax-to-Gross Domestic Product ratio to 9.5% by the end of the current fiscal year. CREATIVE COMMONS

ISLAMABAD: 

After months of public denial, the federal government on Thursday admitted that the Rs2.475 trillion tax target has been revised downward, which will have direct implications for the development budget that has also been sliced by one-fifth.

Due to lower tax collection in the last fiscal year, this year’s tax collection target has been revised to Rs2.345 trillion, Rs130 billion less than the target set by the Parliament, said Finance Minister Ishaq Dar while talking to media. Dar spoke after attending a ceremony arranged to launch the £10 million Financial Inclusion Challenge Fund to support the rural agriculture sector.

Dar said this year’s budget had been prepared on the assumption that the Federal Board of Revenue would collect Rs2.05 trillion in tax revenue in fiscal year 2012-13. In the end, the FBR collected only Rs1.946 trillion that eroded the base, which was now affecting revenue collection in the current fiscal year, he added.

Dar said so far the FBR had managed to attain a 17% growth rate in revenue collection over the previous year and expectations were that the rate will increase to the 20% necessary to achieve the revised target of Rs2.345 trillion, he added.

The first report of the International Monetary Fund (IMF) that went public in September last year had showed that the FBR’s revenue collection target was Rs2.345 trillion. However, at that time the federal government dispelled it saying it was merely the IMF’s projection.

The reduction in tax collection target will dent the government’s efforts to increase Tax-to-Gross Domestic Product ratio to 9.5% by the end of the current fiscal year. The reduced revenues will also adversely hit the provinces’ shares in federal taxes, which will affect their annual development plans.

But Dar insisted that despite the reduction in tax target, the provinces will still get Rs219 billion more than what they got the previous year as their share in federal taxes.

Dar said that due to the reduction in tax collection this year’s development budget will be Rs425 billion. The Parliament had approved Rs540 billion for the development budget for the current fiscal year. He said the Rs115 billion ‘Block’ allocation had been linked with the FBR’s ability to achieve Rs2.475 trillion tax target.

It was not yet clear whether the government will stick to the budget deficit ceiling of 5.8% of the GDP or try to relax it. Breaching the budget deficit ceiling may adversely affect the $6.7 billion IMF programme.

US assistance

While responding to a question on reduction in United States (US) civilian assistance to Pakistan, Dar said Pakistan will review the situation. Dar said his government was more concerned about timely disbursements of the Coalition Support Fund (CSF) than receiving aid under Kerry Lugar Berman Act.

President Obama has sought approval for $1 billion from Congress for both civil and military assistance to Pakistan for the next fiscal year. This has given rise to speculations that the US administration has cut the annual $1.5 billion civilian assistance programme.

Pakistan has sent CSF bills from October to December 2013 to the US and total outstanding dues on account of CSF have increased to $1.6 billion, said Dar, while urging the US to disburse the money timely so that Islamabad could cushion its depleting foreign currency reserves.

Eurobond

Dar confirmed reports that Pakistan will float $500 million worth of Euro Bonds early next month. He said the transaction will be completed by the mid of next month and hoped that the bond will get affirmative response from the international investors.

Dar said Pakistan’s economy was moving in the right direction and the country will achieve an economic growth rate of 4.4% as against the IMF projection of 3.1%. He urged commercial banks to increase credit lines to the agriculture sector that contributes over one-fifth in GDP but gets only 7% of the total banking sector loans.

He said the government was focusing on regional integration and creating energy corridors aimed at boosting prospects for growth.

Bierhoff defends Ozil over Germany boos

The former striker was in Stuttgart for the 1-0 friendly win over Chile and was bemused as supporters jeered the Arsenal playmaker when he was withdrawn late in the game

Oliver Bierhoff "cannot understand" why Mesut Ozil was whistled by fans during Germany's 1-0 win overChile on Wednesday night.

The Arsenal playmaker was named German Footballer of the Year in January and received his award on the pitch before kick-off before setting up the only goal of the game following an intense spell of early pressure from the Chileans.

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But he was roundly jeered when he was substituted in the 89th minute and Bierhoff, who won 70 caps for Germany and was in Stuttgart for the match, cannot understand the supporters' complaints.

"At the time, with the score [at 1-0], I did not understand the whistles. I find it a pity that a player like Mesut is singled out," he told Der Westen.

Joachim Low's men were often on the back foot against Chile, who pressed high up the pitch and carved out a number of openings, and the fans at the Mercedes Benz Arena also made their frustrations known by booing the whole team at the final whistle.

Low admitted that the South Americans were "clearly better" than Germany in the second half, while Philipp Lahm accepted that his side were "lucky" to record victory and that the supporters are entitled to feel aggrieved at their performance.

"The fans paid to see this match and they wanted a better performance, you have to accept [the jeers]," he told ARD. "We have some work ahead of us and we are aware of that."

pakistani Team injuries

The list of injured players for the Pakistan squad includes opening batsman Ahmed Shahzad, who struck a century in a record chase against host Bangladesh. PHOTO: AFP

KARACHI: 

Pakistan are facing injury concerns ahead of the Asia Cup final against Sri Lanka, as four of their players are striving to attain complete fitness for Saturday’s all-important clash in Dhaka. 

The unfit players include all-rounder Shahid Afridi, who played key role in the team’s entry to the final with his explosive knocks against India and Bangladesh. In-form opening batsman Ahmed Shehzad, who struck a century in a record-chase against the hosts, is also nursing an injury.

Opening batsman Sharjeel Khan, who missed the fixture against Bangladesh after injuring his leg on the field against India, and Mohammad Talha, who could bowl just seven overs against the archrivals on debut, are also struggling to attain full fitness.

A team official confirmed the injuries to the players, while hoping that they would get fit for the final in time.

“Afridi has a groin problem that flared up during his innings against Bangladesh,” the official told The Express Tribune.

“Shehzad is suffering from a shoulder injury. He took painkillers and went out to bat in considerable discomfort against Bangladesh.  He showed a lot of courage by staying on the crease for a long time during his century.

“He only trained lightly today [Thursday],” said the official before hoping for the availability of the following players for the final.

Afridi looks forward to title-clash  

Afridi, who has made a stunning impact on the tournament, spoke to the media after the team’s training session, hoping to recover from the injury.

“Yes, there is a groin problem but it’s not a major issue,” he told reporters.

“I am hopeful of recovering from the injury in a day’s time.”

Commenting on his game changing knocks, Afridi stated that winning the Asia Cup was important for the team and he just wanted to give his best efforts.

“It’s an important tournament for us and I am happy with my timely performance.”

The former captain said it had always been his target to make vital contributions for the team in both bowling and batting.

“It’s not possible to perform every day, but I am working very hard. I am making a lot of effort in bowling also.”

‘I don’t need a coach’

Afridi, who has played in 377 One-Day Internationals, said he was at a stage in his career where he did not require coaching.

“I have been playing for a really long time,” he said. “I am better off coaching myself. All I need is the support of people around me.”

Speaking on the high octane Indo-Pak matches, he said the crunch encounters were all about handling the pressure.

“The team that handles pressure well on that day wins.”

When asked about the International Cricket Council (ICC) World Twenty20 fixture between the arch-rivals on March 21, the all-rounder said he was not looking at things beyond the Asia Cup final at the moment.

“Our focus is on the final. We’ll speak about that when the time comes

World Cup friendlies: Pedro strike hands Spain win over Italy

Spain's forward Pedro Rodriguez celebrates after scoring during the FIFA 2014 World Cup friendly football match Spain vs Italy at the Vicente Calderon stadium in Madrid on March 5, 2014. PHOTO: AFP

MADRID: Pedro Rodriguez’s goal was enough to give World champions Spain a 1-0 win over Italy in their final game before coach Vicente del Bosque names his squad to defend their title later this year in Brazil.

Atletico Madrid striker Diego Costa was handed his debut on home soil at the Vicente Calderon Stadium in what was a rematch of the Euro 2012 final which saw Spain successfully defend their title.

However, Costa failed to make much of an impression and it was Spain’s top goal scorer in qualification, Pedro, who made the difference when his shot squirmed under Gianluigi Buffon just after the hour mark.

“I am very happy to have made my debut with Spain and to gain confidence,” Costa told Spanish TV station Telecinco.

“The manager believes in me and I am going to try to play as well as I can with Atletico so I can go to the national team in the best condition.”

Meanwhile, England manager Roy Hodgson drew encouragement from his younger players’ performances after seeing his side edge Denmark 1-0 in their final game before he selects his World Cup squad.

England finished the game with six players aged 25 or under on the pitch and Hodgson believes that their displays against an obdurate Denmark side augur well for the World Cup in Brazil.

“You can’t get me to say anything negative about any of the young players on show today [Wednesday],” he said.

“At one stage we only had Gary Cahill, Joe Hart, Glen Johnson and Steven Gerrard who would consider themselves seniors.”

First-half burst helps France see off Dutch

An impressive France proved too strong for the Netherlands in Paris as first-half goals from Karim Benzema and Blaise Matuidi sealed a 2-0 friendly win.

Benzema volleyed home the opener just after the half-hour mark and Matuidi added another three minutes before the interval, and the visitors never came back into the game as they slumped to a first defeat in 19 matches.

In another encounter, Neymar scored a hat-trick as Brazil routed South Africa 5-0 Wednesday but a host of World Cup rivals were facing searching questions 99 days out from the showpiece event after a night of below-par performances.

On the other hand, Germany were booed off after failing to impress in a fortunate 1-0 win over fellow World Cup side Chile as the South Americans dominated their hosts in Wednesday’s friendly