Coordinator Pak-Afghan Joint Chamber of Commerce and Industry (PAJCCI), Ziaul Haq Sarhadi, has suggested issuing special passes to truck drivers transporting cargo goods between Pakistan and Afghanistan. In a press statement, Sarhadi said the suggestion is based on streamlining and smoothing of Pak-Afghan trade which recently halted for ten days over conditions of visas by truck drivers. Around 1000 truck drivers will be issued special passes instead of visas for carrying their goods with ease between Pakistan and Afghanistan, he added. He stressed that these trucks should be registered with Customs and Transport Departments in Pakistan and Transport and Gumrak in Afghanistan. The owners of heavy vehicles should also be charged a nominal fee for issuance of special pass, he added. He highlighted that the issuance of special passes to trucks, allowing them to ply between Karachi to Mazhar Sharif, will help in easing the transportation of cargo goods and promotion of trade between the two neighbouring countries.
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Special passes for Afg-Pak cargo transport
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Deal inked to outsource 7 KPT berths to UAE entity
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AD Ports Group, a global leader in trade, logistics, and industry, confirmed the signing of a new concession agreement for Bulk and General Cargo operations with Karachi Port Trust (KPT), the Pakistani federal government agency that oversees the operations of the Port of Karachi. Under the terms of the 25-year concession agreement, Karachi Gateway Terminal Multipurpose Limited (KGTML), a Joint Venture between AD Ports Group, a UAE-based company, will develop, operate and manage the Bulk and General Cargo terminal berths 11-17 at Karachi Port’s East Wharf, further enhancing Karachi’s position as a key player in the maritime industry. This agreement builds upon the concession agreement secured by AD Ports Group to develop, operate and manage Karachi Gateway Terminal Limited (KGTL) container terminal berths 6-10 at Karachi Port’s East Wharf in June 2023. The Joint Venture plans to invest approximately USD 75 million in the first two years, including upfront fees, prepayments and investments in superstructure and equipment, followed by further investment of USD 100 million within 5 years which will be used to increase efficiency and capacity by 75%, enabling the terminal to handle up to 14 million tonnes per annum. As part of the agreement, the Joint Venture will take over East Wharf’s existing operations, ensuring the transaction will be earnings accretive immediately upon completion. The Bulk and General Cargo terminal, which has been handling around 8 million tons per annum historically, is expected to generate revenue of around USD 30 million and EBIDTA of around USD 10 million annually in the short term, with the terminal’s operations being dollarised, and grow in the medium term as upgrade and capacity investments materialise.
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The International Monetary Fund has agreed to review a proposal backed by the Special-Investment Facilitation Council aimed at reducing the subsidy burden of the industrial sector by 91%. This initiative aims to make Pakistani exporters more regionally competitive by potentially lowering their monthly bills by up to 29%. Pakistani and IMF authorities are scheduled to hold virtual discussions early next week. The IMF’s endorsement could lead to a reduction in electricity bills for large industrialists and small manufacturers, ranging from 16% to 29%, according to government sources. The IMF will also assess the practicality of the government’s plan to write off the Rs268 billion commercial debt of Pakistan International Airlines, incorporating it into the public debt. Additionally, the Rs1.28 trillion energy sector circular debt reduction plan will be taken up by the IMF early next week. The proposals, including cleansing the PIA balance sheet, lowering electricity bills for industrialists, and eliminating Rs1.27 trillion circular debt, have been vetted by the 9th session of the SIFC during its February 2nd gathering.
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Industrial subsidies burden may be cut by 91%
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Caretaker govt seals plan to sell national carrier
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The caretaker government is making binding plans for the new set-up to sell loss-making Pakistan International Airlines (PIA), according to the privatisation minister and other officials. In the past, elected governments have shied away from undertaking unpopular reforms, including the sale of the flag carrier. But Pakistan, agreed in June to overhaul loss-making state-owned enterprises under a deal with the International Monetary Fund (IMF) for a $3 billion bailout. The government decided to privatise PIA just weeks after signing the IMF agreement. The caretaker administration, which took office in August to oversee the Feb 8 election, was empowered by the outgoing Parliament to take any steps needed to meet the budgetary targets agreed with the IMF. “Our job is 98 per cent done,” Privatisation Minister Fawad Hasan Fawad told Reuters when asked about the plan to sell the airline. “The remaining 2pc is just to bring it on an excel sheet after the cabinet approves it.” Fawad said the plan, drawn up by transaction adviser Ernst & Young, will be presented to the federal cabinet for approval before the tenure of the administration ends following the election. The cabinet will also decide whether to sell the stake by tender or through a government-to-government deal, Fawad said. “What we have done in just four months is what past governments have been trying to do for over a decade,” Fawad said. “There is no looking back,” he said.
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The government and commercial banks have agreed on a Rs268 billion debt restructuring plan for Pakistan International Airlines (PIA). This move, while shifting the burden of PIA’s inefficiency onto taxpayers, removes an irritant in its privatisation. The Ministry of Finance, abandoning its previous stance of not incorporating PIA debt into public debt, now commits to making principal and interest payments from the budget. Under the agreement, the government will use PIA sale proceeds for principal payments, resorting to the budget if insufficient funds are available. Banks, in return, accept a 10-year debt rollover with a 12% annual interest rate, amounting to Rs32.2 billion in annual interest payments.
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PIA debt burden shifted to taxpayers
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SBP allows advance payments for imports
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The State Bank of Pakistan (SBP) has relaxed the trade regime by allowing advance payments or remittances for import of goods, which may increase outflow of dollars from the country. The State Bank issued a circular on this subject and invited all banks to circulate this new development regarding the advance payments without prior approval of SBP. “Authorised dealers are henceforth allowed to effect import advance payment with appropriate due diligence, without prior approval of SBP, against irrevocable letters of credit or invoices, up to 100 per cent of the value of letter of credit or invoice, as the case may be,” said the circular. A banker said the circular provides an opportunity to importers for paying advance remittances against their goods without opening of a letter of credit. This payment could be up to 100 per cent, which means an importer could pay 20 or 30 per cent more against goods. Importers should, however, buy dollars from banks, as per the current practice. The State Bank has relaxed imports, but importers find it difficult to open a letter of credit as banks do not cough up dollars easily.
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Pakistan’s exports have sustained rising momentum in January this year after reaching $2.8 billion by showing an increase of around 27 percent. Pakistan’s exports in Jan 2024 have increased by 26.9% to $2.786 billion from $2.195 billion in Jan 2023. The imports during the same period decreased by 4.5% to $4.665 billion from $4.884 billion. The trade deficit narrowed to $1.879 billion in January 2024 from $2.689 billion in January 2023. This is a substantial improvement from last year. Pakistan’s global trade figures for the period Jul 2023-Jan 2024 show that Pakistan is steadily expanding its international trade footprint. Exports totaled $17.766 billion, up 12% from $15.831 billion during the same period in the previous financial year. Imports contracted by -16% to $30.010 billion as compared to $35.836 billion in the same period in the last financial year. The overall trade deficit has decreased by -39% to $12.244 billion as compared to $20.005 in the previous year. In absolute terms, during Jul-Jan 2024, exports increased by almost $2 billion, imports decreased by about $6 billion, while the trade deficit contracted by $7.8 billion.
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Exports sustain rising momentum in January, reach $2.8 billion
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Leveraging Chinese expertise to help Pakistan expedite real estate growth
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Pakistan’s collaboration with Chinese construction companies offers a unique opportunity to leverage their vast expertise to expedite its infrastructure and real estate development and adopt efficient construction techniques while ensuring high-quality standards and promoting sustainable practices. Dr. Liaqat Ali Shah, Head of Policy CPEC in the Centre of Excellence for CPEC, said this while talking to newsmen. “Owing to China’s rapid urbanization in the last two decades, Chinese construction companies have had a lot of exposure to efficient construction techniques, which has given them a lot of expertise in these fields,” he said. “Collaborating with Chinese construction firms allows Pakistan to benefit from these high-quality standards, contributing to the construction of a durable and resilient infrastructure. This is particularly crucial in regions prone to natural disasters, as the expertise garnered from the Chinese practices can help in designing and constructing buildings that can withstand various environmental challenges,” he opined. “As the world collectively embraces the imperative of sustainable development, the Pak-China partnership aligns seamlessly with these global goals. Both nations recognize the importance of environment-friendly construction practices and adoption of green building materials.” According to the SBP Annual Report 2023, the construction industry recorded a contraction of 5.5 percent in FY23, after registering a moderate growth in the previous two years. Increase in input prices and wages, higher borrowing costs, and slower growth in development spending are the main factors which constrained the construction activity during FY23.
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Despite an underlying `distrust` in the electoral exercise, millions queued up to vote in Feb 8th 2024 long-overdue elections. Earlier in the day, voters, both young and old, had started queuing up shortly before 8am outside the 90,000 polling stations designated for the polls, eager to discharge their civic duty. More than 128 million were eligible for exercising the right to franchise in what had been described as the `largest` elections in the country`s history. Voting was held for 265 out of the total 266 general seats of the National Assembly and 590 out of 593 general seats of the provincial assemblies. An unprecedented bulk of the voters belonged to the youth demographic. Polling had mostly commenced on time and continued largely without incident till 5pm. With tensions running high and bitter divisions between the contenders, the presence of police and paramilitary personnel seems to have helped avert a large breakout of polling day violence, although some isolated incidents did spoil an otherwise peaceful day. Around 650,000 security forces had been deployed for poll duties, including 137,000 army men and paramilitary troops and 511,000 police personnel. Prime Minister Anwaarul Haq Kakar in a message wrote `I deeply thank and congratulate the nation on successful conduct of general elections-2024. I appreciate the efforts of Election Commission of Pakistan, interim provincial governments, armed forces, civil armed forces, police, law enforcement agencies, election staff, media and all those institutions and individuals who contributed to the conduct of the free and fair elections
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