SUNRISE CAPITAL (PVT) LTD | 05 January 2017 | TAKE OFF

Iranian, Chinese companies eye steel mill acquisition:

The government is again starting the process for the sale of financially sick Pakistan Steel Mills (PSM) whose losses have piled up to Rs167 billion, says a top government official. “We have prepared a lease-based transaction structure for PSM. One potential investor is an Iranian steel company and its team recently visited Pakistan to assess the mill’s worth,” Zubair said. “The second potential investor is a Chinese company along with a local concern.”The buyer will be given hiring and firing powers. Zubair revealed that the new sell-off structure would be reviewed by the Privatization Commission Board on January 16, after which it would be put before the CCOP.

High production cost: Ministry suggests placing cap on nuclear power plants:

With constant emphasis on slapping a ban on the use of imported coal and furnace oil in electricity production, the government is mulling over putting a brake on the installation of nuclear power plants in future because of concern over the high cost of production.According to a senior official of the Ministry of Water and Power aware of the development, the ministry floated a proposal in a high-level meeting chaired by the prime minister for placing a cap on imported fuel consumption in power generation as electricity was expected to be in surplus in 2022.“With the building of new dams and utilisation of huge Thar coal reserves, the reliance on imported fuels could be reduced,” the official quoted the ministry as saying.

NRL cuts bank loan support:

National Refinery Limited (NRL), owned by cash-rich Attock Group, has cut half its dependence on banks’ loan for expansion and introduction of better quality diesel in demand for Euro-II vehicles by June 2017.“This is to inform that on NRL request, the Syndicate Term Finance Facility has been reduced from Rs24.2 billion to Rs12.1 billion…In this connection the requisite supplemental agreements have been signed by all the parties concerned,” Nouman Ahmed Usmani, Company Secretary, NRL said in a notification to Pakistan Stock Exchange.

Free Trade Agreement: Pakistan, Malaysia in talks to cut duties further:

Pakistan and Malaysia are negotiating to further reduce duties on existing and additional tariff lines under the Free Trade Agreement (FTA) to facilitate businesses of both countries.According to officials, the two countries had inked the Comprehensive FTA for Closer Economic Partnership back in 2007. The agreement was Pakistan’s first comprehensive FTA incorporating trade in goods, trade in services, investment and economic cooperation and Malaysia’s first bilateral FTA with any South Asian country.According to the agreement, for trade in goods, Pakistan was supposed to eliminate tariffs on 43.2% of imports from Malaysia by 2012, while Malaysia had to eliminate tariffs on 78% of imports from Pakistan.

IBRD, AIIB to lend $690m for Dasu Hydropower project:

World Bank Country Director Patchamuthu Illangovan has said that two contracts (worth $2 billion) for the Dasu Hydropower project are ready for the signing, which have been awarded to the lowest evaluated bidder.During the meeting, chaired by Finance Minister Senator Ishaq Dar to review Tarbela Dam 5th Extension Hydropower Project, World Bank Country Director Patchamuthu Illangovan informed Dar that International Bank for Reconstruction and Development (IBRD) will lend $390 million, while Asian Infrastructure Investment Bank (AIIB) will lend $300 million for the project. The WB country director also said that loans from the IBRD and the AIIB have been arranged for the project.

Britain looking forward to expand bilateral trade with Pakistan: British MP

Federal Finance Minister Senator Ishaq Dar has said that after achieving macroeconomic stability, the government is now focused on achieving higher, sustainable and inclusive economic growth. He madethese remarks in a meeting with Acting US Ambassador Jonathan Pratt. Dar and Pratt discussed matters of bilateral interest including trade and economic relations between Pakistan and the US. Pratt said that Pakistan is an important ally of the US. He said that improvement in both the security situation and macroeconomic indicators infused confidence for US investment to Pakistan.He appreciated the longstanding strategic partnership between Pakistan and the US. He expressed confidence that Pakistan-US ties will strengthen even further under the new US administration.Meanwhile, British Member of Parliament for Birmingham Perry Barr and Shadow Minister for Foreign and Commonwealth Affairs Khalid Mahmood called on Dar and discussed possibilities of expansion in bilateral trade and investment between Pakistan and UK.

Govt may impose new taxes to restrict budget deficit:

Following massive shortfall in tax collection during first half of ongoing financial year, the government is either to slash the development budget or to impose new taxes to restrict the budget deficit within target.The government had budgeted to keep the deficit at 3.8 percent of GDP or at Rs1.276 trillion by the end of June this year. However, the government might struggle to restrict after Federal Board of Revenue (FBR) had witnessed massive shortfall of Rs150 billion during July-December of the year 2016-17, as it collected Rs1465 billion.The government had set Rs1615 billion tax collection target for July-December period with the International Monetary Fund (IMF). The FBR's performance at around 7 percent for the six month period ended in December 2016, reflecting catching up of the shortfall experienced in the initial months, largely on account of giving relief to consumers on petroleum prices together with sales tax refunds of Rs45 billions.