Central Asia to Chitral: Talks on power import start in Dushanbe today

ISLAMABAD: 

Pakistan and Tajikistan are set to hold talks in Dushanbe to discuss the possibility of laying power transmission lines from Central Asia to Chitral for supply of 1,000 megawatts of electricity.

Commissions, constituted by the two countries, would meet on Tuesday (today) in Dushanbe for the second Central Asia-South Asia (Casa) 1,000 power project, sources say. Water and Power Minister Khawaja Asif left for Dushanbe on Monday.

Pakistan is already working on the first Casa-1,000 power import project with Tajikistan.

Of the commissions, Pakistan had formed one, headed by Khawaja Asif, while another was constituted by Tajikistan, officials said. They agreed to establish the bodies during a visit of Prime Minister Nawaz Sharif to Dushanbe in June in order to cooperate in the energy sector.

Officials familiar with the developments said the government would have to conduct studies to determine the possibility of laying transmission lines from Central Asia to northern areas.

Tajikistan has a huge hydropower potential and seeks to help ease energy problems in Pakistan.

“We have the capacity to export an additional 1,000MW of electricity to Pakistan through the Chitral route that will help our brotherly country overcome the power crisis,” a Tajik embassy official said.

“We also want to expand energy cooperation by laying a pipeline for export of gas to meet energy needs of the South Asian state.”

According to diplomatic sources, Tajikistan also contains huge reserves of oil and gas and could export gas by laying a pipeline, on the model of Turkmenistan, Afghanistan, Pakistan and India (TAPI) pipeline.

Under the second power supply project called Casa-2, transmission lines will pass through a small border area of Afghanistan and reach Chitral, which is 15 km from the Tajik border.

“The project, named “Rogun-Khorog-Vakhan-Chitral” and developed in the early 1990s, had encouraged interest from some countries and international financial institutions, which were keen to become part of it,” a diplomatic source said.

Tajikistan, Pakistan and other participating countries have signed a financing deal with the World Bank and other multilateral donors will also be approached for funding the power project.

The project is estimated to cost around $240.5 million covering transmission lines to the border between Afghanistan and Pakistan.

The two sides will also discuss the progress on first Casa-1,000 power project for which the World Bank has approved financing. This will ensure a steady source of revenue for the Kyrgyz Republic and Tajikistan, the weakest economies in Central Asia, and requires no new investment in power generation because it uses surplus water that would otherwise be wasted.

Tajik embassy officials said the project would not only ease electricity shortages in Pakistan, but would also replace fuel-based electricity generation in Afghanistan and Pakistan.

It will establish Afghanistan as a viable transit country and offer transmission capacity for other countries during off-peak season. It will also create a viable governance mechanism to build confidence among neighbours.

Social Private Partnerships emerging in Pakistan

Fauji Foundation, an NGO, derives 80% of its revenue from commercial activities like production of cement, electricity, healthcare, education and banking and finance. PHOTO: FILE

LONDON: A new form of hybrid business is fast emerging in Pakistan, perhaps unknowingly even by those who are involved in developing it. For ease of reference, this may be called the Social Private Partnership (SPP).

In this form of business, a private business is developed around a not-for-profit activity, or vice versa. According to the Aga Khan Foundation, the total number of registered and unregistered Non-Governmental Organisations (NGOs) in Pakistan is 45,000, out of which only a few hundreds are effective in achieving their objectives; others are either bogus or ineffective.

Amongst those playing a significant role in the social sector of the country, many have developed commercial businesses around not-for-profit activities. Perhaps the most powerful NGO in Pakistan is Fauji Foundation, directly or indirectly benefitting almost 7% of the country’s population.

Although a not-for-profit organisation, it derives about 80% of its revenue from commercial activities like production of cement, electricity, healthcare, education and banking and finance, among others.

Islamic Finance interlinking with SPP

In most cases for SPP to emerge, it is a pre-requisite that a credible not-for-profit venture is already developed or has been in existence. For example, Akhuwat – the largest provider of interest-free micro loans to the underprivileged in Pakistan – is stepping up its operations. It has entered into a partnership with a leading Islamic bank in the country and another international Islamic financial advisory group to start a Mudaraba company exclusively focusing on agriculture financing in the rural areas.

Mudaraba is a contract whereby one side, the investor contributes money, and the other side, the manager does the work. The investor bears all losses, and the manager earns a profit share.

Unlike Akhuwat’s existing focus — interest-free micro loans — it is now entering into the domain of Shariah-compliant agriculture financing, which is purely a commercial activity for Akhuwat’s partners. It must be clarified that Akhuwat remains within its remit of being a not-for-profit organisation, focusing on the welfare of the underprivileged classes in the society.

The new Mudaraba company, to which Akhuwat is a partner, will, however, be a commercial enterprise. The partnering Islamic bank will also introduce branchless banking through this Mudaraba to increase its outreach to the financially excluded.

There are numerous other NGOs in the country which have combined or extended not-for-profit businesses to the commercial activities. For example, Kawish – an NGO with 120 schools offering free/affordable education to the poor – also offers Shariah-compliant microfinance for the purchase of fertilisers by small farmers. The microfinance is offered through the local teachers working in the Kawish-run schools. Kawish offers competitive returns to the private investors who look for Shariah-compliant and welfare-oriented business opportunities.

According to Akhuwat’s founding member of the Board of Directors, Muhammad Saleem Ranjha, “There are scores of wonderful projects up and running in the country, and there was a need to connect them.

“This connectivity has started emerging not only between NGOs, but also NGOs and private businesses. This is expected to improve the socio-economic impact through a joint and coherent effort by the NGOs.”

“We are in the process of developing a joint platform for NGOs to consolidate their efforts to create an impact rather than creating unnoticeable small changes here and there,” says Pakistan Institute of ICT’s for Development’s Chief Executive Officer Ammar Jaffri.

Given the potential size of the social enterprise in Pakistan, it is expected that this new form of SPP may become a model for replication by governments who are looking for privatisation through the Public Private Partnerships (PPP). According to some analysts, this has already started emerging.

A number of public sector programmes, including the prime minister’s Youth Programme, are partially being offered through NGOs that have proven to be more cost-effective than the government bodies.

“In case of social loan disbursement, for example, the cost of delivery by a government body could be four to five times more than what Akhuwat’s loan disbursement may cost,” says Ranjha.

This is indeed an interesting phenomenon that should attract the attention of a number of multilateral organisations that are looking for deploying funds for socio-economic development in the countries like Pakista

Red tape drives away Chinese group from Apparel Park

The park will generate 250,000 jobs after becoming fully operational and will have about 600 industrial plots from half acre to 25 acres. PHOTO: FILE

LAHORE: Shandong Ruyi Group of China is losing interest in the Quaid-e-Azam Apparel Park, a project of the Punjab government where the company was planning to invest heavily, over some bureaucratic hurdles.

“The company has not yet come up with proposals to demonstrate its interest in the project despite the fact that its Director Arie Qiu, daughter of the owner, held several meetings with the Punjab chief minister to discuss investment,” an official of the provincial Industries Department told The Express Tribune but requested anonymity.

The Ruyi Group, a joint venture between Chinese and foreign investors headed by Qiu Yafu, is a hi-tech enterprise, is listed among top 10 firms in the textile industry as well as among 100 major companies in Shandong.

The Punjab government is setting up the Apparel Park over an area of 1,562 acres of farmland near Sheikhupura motorway interchange. It acquired land at a cost of Rs3.3 billion, which constituted about 49% of total investment in the project.

The remaining 51% (estimated at around Rs4 billion) was promised by Shandong Ruyi Group for infrastructure development and providing all services to the factories under the public-private partnership model and later as a joint venture.

The Punjab government will own 49% of the project and the Chinese group will have 51% shareholding.

Earlier, Ruyi was planning to submit unsolicited bids accompanied by a feasibility study, environment impact assessment, draft of public-private partnership agreement, need of government support and modalities.

Later, the idea of joint venture was floated to cut the time period. In this arrangement, both the government agency and private investor make equity investments for project development and establish a new company or take joint ownership of an existing one through purchase of shares.

After the company is set up, board of directors will be appointed for supervision. The company will deal with the Apparel Park on the model of Punjab Industrial Estates Development and Management Company (PIEDMC) and will be registered under the Companies Act.

“Though the new company has been established, it has not become fully functional, denting confidence of the Ruyi Group,” the official said.

In a joint venture, the process is streamlined and the private company joins hands with others in order to start work without any delay.

Separately, Ruyi has tied up with a private sector concern, Masood Textile, in Faisalabad M3 Industrial Estate spread over 4,415 acres, which was inaugurated in the last week of May by the Punjab chief minister.

As Ruyi does not submit its proposals, the Punjab government has decided to execute the project with managerial support of PIEDMC. But experts question whether PIEDMC has the capacity to deal with such a big project.

“Ruyi and the new company have failed to agree on the modalities of the joint venture in the Apparel Park and this could be the cause of the former’s lack of interest,” another senior official of the Industries Department said.

At present, PIEDMC is handling four projects – Sundar Industrial Estate, near Lahore, Multan Industrial Estate, Bhalwal Industrial Estate and Rahimyar Khan Industrial Estate.

Talking to The Express Tribune, PIEDMC General Manager Naveed Mushtaq Gill said National Engineering Services of Pakistan (Nespak) had been hired as a consultant that would prepare a master plan and standard documents for the establishment of the park.

Following this, advertisements will be given in national newspapers to invite expressions of interest from financially sound investors.

The park will generate 250,000 jobs after becoming fully operational and will have about 600 industrial plots from half acre to 25 acres for an industrial unit. A 100-megawatt coal-fired power station will also be developed for electricity production.

“I have no knowledge that Ruyi has disassociated itself from the project. PIEDMC will manage the new park,” Gill said.

Another lender?: Analysts tip-toe around BRICS’s new bank

ISLAMABAD: 

For long, Pakistan has remained dependent on west-dominated global financial institutions. But, as a strategic shift in the global economy gets under way – from the developed to the largest and fastest growing economies – the country can benefit from the New Development Bank (NDB) recently formed by the growing economies.

Known as BRICS, founding members of the NBD – Brazil, Russia, India, China and South Africa – have for the time being restricted membership to themselves. However, in principle, they have agreed to expand membership to other countries.

The bank will be headquartered in Shanghai, China with its first president from India. The newly born financial institution is widely perceived an alternate to global financial hegemony of the US and Europe.

The new financial institution will help break the monopoly of the World Bank (WB) and International Monetary Fund (IMF), which will benefit countries like Pakistan, according to an official of a multinational financial institution.

But for a country like Pakistan, heavily dependent on the west, there will understandable be pros and cons of joining a new bloc, according to analysts. They said Pakistan should become a member of the NDB at the earliest but will have to weigh in foreign policy implications before joining the club.

It opens the door for Pakistan to get funding other institutions decline to give. However, experts say that “it is too early” to expect that the NDB will replace the WB or the IMF. They say it will take at least 10 to 15 years before the NDB is counted as a near rival to the established global lenders.

The NDB will be one more window for getting finances for infrastructure projects but it will also not offer free lunch, said Dr Abid Hasan, a former operation WB advisor. The NDB might have less stringent conditions but it will ensure that its money is safely returned, he added.

Dr Hasan said there is a possibility that the NDB will raise funds by floating bonds like the WB and the Asian Development Bank. Bond investors will also seek solid guarantees and eventually the NDB will have to adopt policies which give comfort to investors, he added.

Pakistan’s ambitions to join the new club may face resistance from archrival India but it can successfully counter the Indian factor with the help of China and Brazil, said analysts. They said China is the dominant force among the five members and is considered close to Islamabad. Brazil may also neutralise political ambitions of India, the former being an important supplier of defence equipment to Pakistan.

The response of the US and European investors to the NDB will be another important factor for the new financial institution becoming a rival to the Bretton Woods System, comprising the WB and the IMF.

The Bretton Woods System are predominately Western institutions and over the years have been used for political purposes by the US and Europe.

The loans these institutions offer to developing economies like Pakistan are always linked to painful structural re-adjustments that create social and political troubles in the recipient countries.

Initially, the NDB will finance infrastructure and sustainable development projects, with $50 billion in capital. The BRICs have also announced a $1000billion Contingent Reserve Arrangement (CRA), to tide over members in financial difficulties. The CRA is going to be a substitute of the IMF, according to analysts. But it will take time till the NDB and CRA become global.

Each BRICS country will contribute $10 billion to the bank’s capital stock. China will provide 40% of a $100-billion Contingency Reserve Arrangement. While the NDB will have contributions from all five member countries, the dominant player in the organisation will be China.

China’s underline aim is that it wants Yuan become a global exchange currency —an objective that remained unfulfilled due to strong US influence.

Kroos: I only decided to join Madrid after Bayern talks collapsed

The 24-year-old has admitted that his initial plan was to stay at the Allianz Arena, but he is now looking forward to the challenge of playing for the European champions

Toni Kroos has stressed that he only started thinking about a transfer to Real Madrid after talks withBayern Munich over a new deal collapsed.

The Germany international was keen to stay in Bavaria, but he eventually opted to join the European champions for a reported €25 million after failing to agree terms on a contract extension with Pep Guardiola's side.

"I first started thinking about a transfer when talks with Bayern were unsuccessful. Bayern were always my priority and I didn't talk to anybody else," Kroos told the official DFB website.

"I then decided to go for a new challenge after we failed to reach an agreement with Bayern and a number of clubs showed an interest in signing me. Winning the World Cup settled it."

The versatile midfielder dismissed rumours that he left the Allianz Arena because he did not feel appreciated by the Bundesliga titleholders.

"I didn't leave Bayern because I didn't feel valued," he insisted. "I played for one of the biggest clubs in the world and was a starter under several coaches. 

"I always played in the major competitions and Bayern always looked after me. [Coach] Pep Guardiola and [sporting director] Matthias Sammer were important to me and the fans always supported me as well. 

"But Real Madrid are a huge challenge. People all over the world know Madrid. 

"Thousands of people attended my presentation at the Santiago Bernabeu and club president Florentino Perez was interrupted a number of times by cheering fans. I have never seen anything like it. 

"This club is just the right step for me."

The 24-year-old faces stiff competition for a place in midfield at Madrid, but he has little doubt that he will become a regular at his new club.

"You have to deal with that as a footballer," he reasoned. "I am looking forward to playing alongside guys like Cristiano Ronaldo, Sergio Ramos and Sami Khedira. 

"No team has ever won back-to-back Champions League and that's exactly why Madrid have signed some new players. 

"It can only help to bring in new players who want to prove themselves and challenge the established players."

Manchester United to launch new €54m Vidal bid

The Red Devils are confident of making progress in their pursuit of the Juventus star this week, with Louis van Gaal having given the green light to a move for the Chilean

EXCLUSIVE
By Paul Clennam

Manchester United are ready to launch a new €54 million bid for Juventus midfielder Arturo Vidal this week.

The Old Trafford club are increasingly confident of landing the Chilean World Cup star and are looking to make progress in their move for the 27-year-old in the coming days.

Louis van Gaal, who officially took charge at United on Wednesday, is a big fan of Vidal, having tried to sign him while in charge of Bayern Munich in 2011, and has approved a move for the midfielder.

VIEW FROM ITALY

By Federico Casotti | Chief Editor, Goal Italy "In Italy, there's the feeling that Vidal may be the marquee player to leave Juventus during this transfer window. "After the shock of Conte's departure, Juventus have pushed ahead with a move for Argentinean Roberto Pereyra from Udinese, who could be seen as a reasonable replacement for Vidal in a starting XI that new coach Massimiliano Allegri will switch from 3-5-2 to 4-3-1-2."

The Dutchman encouraged the pursuit of Vidal earlier in July, despite the club being told that a move could cost them €56m plus Nani.

United have monitored the situation regarding Vidal closely during a turbulent summer at Juventus, which has seen Antonio Conte leave the Serie A champions amid talk of unhappiness regarding the club's transfer policy.

Juventus have signed forward Alvaro Morata from Real Madrid and are set to complete a move for Roberto Pereyra, while suggestions that Vidal could be sold grow louder in Italy.

Vidal, who is currently resting in Chile following the World Cup, has recently conceded that his future in Turin looks uncertain.

"I don't feel like my time at Juventus is over, although I can't say more right now," he told a Chilean radio station. "When I'm back from Chile, I'll talk to my executives and we'll see what will happen."

Juve director Pavel Nedved, meanwhile, says that the club are reluctant to sell both Vidal and Paul Pogba but admits that a big-money bid could force them to part ways with the Chilean.

"Our strategy is clear; we want to keep all our best players, including Vidal and Pogba," he told Tuttosport. "We don't want to sell anyone, especially Vidal.

"Certainly, if there were a high bid for them, we'd have to think about it but we don't want to sell our champions.

"We want to be competitive in the Champions League and the only sales to be players who are not part of our plans."

Publicly, United have aimed to manage expectations regarding signings but Vidal has emerged as their No.1 target and chief executive Ed Wooward has confirmed that the club are still in the market for players this summer.

"We've been working with Louis over several weeks with regards to targets and we're continuing to move forward on some of those targets," Woodward told MUTV.

He added: "We are willing to invest. There is no fixed budget. Financially we are extremely strong and funds are available. Louis is assessing what's going on and there is a lot of work going on behind the scenes, so watch this space."

Real Madrid reach €88m James Rodriguez agreement

The 23-year-old will finalise personal terms on Monday before being officially announced as the Champions League winners' second signing of the summer transfer window

By Duncan Castles

Real Madrid have reached an agreement with Monaco for the transfer of James Rodriguez.

In an overall deal that should see the Colombia international become the third most expensive footballer in the history of the game, Madrid will meet the French club's €88 million valuation - the same fee Barcelona paid for Luis Suarez - including performance-related variables.

With an agreement reached between the two clubs over the weekend, discussions have been scheduled for Monday to iron out the details of James's personal terms as Madrid aim to make the midfielder their second signing of the summer following the arrival of Toni Kroos from Bayern Munich.

An outline understanding on the 23-year-old's salary has been in place since Madrid president Florentino Perez decided to target the player as this summer's principle Galactico signing.


THE STAR OF THE WORLD CUP | James was arguably the best player at Brazil 2014
James - who pushed Monaco to allow him to leave the Ligue 1 club just a year after a big-money move from Porto - will join Gareth Bale and Cristiano Ronaldo in Madrid's star-studded attack.

The arrival of the 23-year-old could spell the end for Isco at the Santiago Bernabeu, with Liverpool among the clubs monitoring the playmaker's situation with a view to a summer bid.

In addition to the acquisition of World Cup Golden Boot winner James, Madrid have been working on a deal to bring a second Colombia star, Radamel Falcao, from Monaco and reached a breakthrough in talks at the beginning of July.

Falcao's return to Spanish football after a season in Ligue 1 is dependent on Madrid's medical department declaring themselves satisfied with the striker's recovery from cruciate ligament surgery.