Pakistan railways to recuperate losses
Pakistan Railways has decided to recuperate losses it incurred due to previous mismanagement and the recent floods through its own resources, said Railways Minister, Khawaja Saad Rafique.
“We have estimated a Rs525 billion loss to Pakistan Railways during the recent floods, which has almost stagnated routine life in Sindh and Balochistan,” Rafique said in a press conference on Tuesday.
Railways infrastructure, including tracks and bridges, were destroyed during the floods in Sindh and Balochistan. Railway services were also suspended for weeks which further dented its revenue stream.
“We incurred a loss of millions of rupees on a daily basis due to a halt in train operations. We have just restarted our operations and are hopeful to expand with each passing day,” the minister added.
While the management looked for ways to reduce deficit and adjust for inflationary pressures, the recent floods added an additional burden of loss on the cash-strapped railway.
Export potential to UK seen at £5bn
While Pakistan only exports £1.9 billion to the United Kingdom (UK), businessmen have said that the actual potential of exports is as high as £5 billion.
Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President, Irfan Iqbal Sheikh, asserted that “Pakistan has the potential to enhance its exports to the UK to £5 billion from the current £1.9 billion in FY 2022 within a period of five years.”
The FPCCI president explained that there are a number of factors are in Pakistan’s favour when looking at the UK. “There is a huge South Asian diaspora in the UK, competitively-priced products vis-à-vis UK, an existing upward trend in bilateral trade surplus, an upsurge in people-to-people, business-to-business and chamber-to-chamber linkages over the last many months.”
He also added that “post-covid, there was an increase in demand or inquiries for imports from Pakistan in various sectors including, IT services, value-added textiles leather products, sports goods, fruits and vegetables, gems, jewellery and artefacts.”
Oil demand sinks by 22pc to 1.5mn tons
The demand for petroleum products declined by a notable 22 percent to 1.52 million tons in September 2022, compared to the same month last year, as record-high prices and the cataclysmic floods restricted economic activities from resuming.
Due to the floods inundating the fields, agricultural activities came to a standstill, reducing the sale of diesel. Industrial output also reduced in the wake of the government’s corrective measures to cut down imports and cool down the then-overheated economy.
Due to the damage to cotton caused by the floods, almost 100 textile manufacturing firms are lying fully or partially closed.
Quoting Khurram Mukhtar, patron-in-chief of the Pakistan Textile Exporters Association (PTEA), Bloomberg reported that as many as 100 small mills have suspended operations due to a shortage of good quality cotton, rising fuel costs, and poor recovery of payments from buyers in flood-hit areas. Those most affected are towel and bed sheets factories.
Jul-September trade deficit shrinks 21pc
Pakistan’s trade deficit shrank over one-fifth to $9.2 billion in the first quarter of current fiscal year solely on the back of a steep fall in imports as exporters failed to take advantage of 100 percent currency devaluation over the past five years, reported the Pakistan Bureau of Statistics (PBS) on Tuesday.
The gap between imports and exports came in at $9.2 billion in the July-September quarter, which was 21.4 percent, or $2.5 billion, less than the comparative period of previous fiscal year.
Trade figures were released by the national data collecting agency two days before a scheduled meeting between Finance Minister Ishaq Dar and exporters on the discontinuation of electricity subsidies due to the lack of funds.
According to the PBS, exports stood at a mere $7.1 billion, up $129 million, or 1.8 percent, during the July-September period.
The unimpressive export proceeds should be a matter of concern as they indicate that the country will not only miss the annual export target of nearly $38 billion, but the receipts may also be lower than the previous fiscal year.
Pakistan offers tax relief for solar energy
Federal Minister for Industries and Production Makhdoom Syed Murtaza Mahmood has said that the government is offering certain tax incentives and allowing duty-free import of inputs, plant and machinery to promote solar energy.
He was speaking at a workshop on “Solar panel and allied equipment manufacturing policy”, organised by the Engineering Development Board (EDB).
The minister noted that Pakistan had reserves of basic raw material for producing solar wafers and could start local assembly in the first phase, which could be done by rationalising duties and taxes on solar panel imports.
Thereafter, a five-year plan was needed to further rationalise the tax and tariff regime for providing a level playing field to the local manufacturers, he observed.
Sindh government setting up two waste-to-energy plants
The Sindh government has started work on setting up two waste-to-energy plants at an estimated cost of $250 million each and is targeting to produce electricity by the end of December 2023.
The provincial government is facilitating two foreign companies – a Dutch and a US firm – for developing the projects in Karachi.
Sindh Energy Minister Imtiaz Ahmed Shaikh presided over a meeting to review progress on the projects, according to a statement issued on Tuesday.
The meeting was informed that the two plants would be completed by the end of 2023. They will start generating electricity on a commercial basis. Each plant has a production capacity of 50 megawatts.
It was further briefed that the Sindh Solid Waste Management Board had provided space and assurance of waste supply for the plants. Work on a feasibility report and relevant regulations is continuing on a fast track.