| May 8, 2006 | Monday | Rabi-us-Sani 9, 1427 |
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Less rhetoric
World Bank loans
Remembering Naushad
Load-shedding
Email address
Real estate brokerage business
U-turn needed
Where is the price control committee?
Removing billboards
Desire to own cars
ACCORDING to media reports, Iran has offered gas for the proposed Iran-Pakistan-India pipeline project at $6 per million British thermal units (btu) to be delivered at Pakistan-Iran border. The price, with the project structure, was discussed at the first secretary-level (trilateral) meeting of the three countries in Tehran last week to work out an agreement for building the over $7 billion pipeline project. This is for the first in 18 months that the issue of gas pricing was discussed. India plans to initially draw 60 million cubic metres of gas from the pipeline and increase the quantity to 90 million cubic metres within two to three years. Pakistan has estimated its initial demand at 30 million cubic metres, which would double by 2013. The transit fee would be $0.33 per mmbtu ($0.047 per mmbtu per 100-kms) according to the report prepared by a group of consultants.
According to calculations, local cost of gas comes to $3.4 per million btu, gasification of coal will make it cost 5.5 dollars a unit, while the high sulphur fuel oil will cost $7.5 a unit.
Earlier, Indians were expected to get the gas at $1.8 per mmbtu. The gas was expected t be delivered at India’s border via an inland pipeline that will pass through Pakistan. The Iranian gas will be available at half the going rate for liquefied natural gas and naphtha that is $3 to $4 per mmbtu.
News consistently emanated from Indian press in 2005 that both India and Pakistan were looking at a cost of up to $2 per mmbtu for the piped gas from Iran. For India, the cost would be a bit higher, since in addition to the well-head price of gas, the country will also have to bear the transit fee and the cost of transporting gas to its border. According to an Indian official, all put together, the cost of gas at the Indian border is expected to be $2.1 per mmbtu. India already has communicated to Pakistan about the transit fee for a 600-700km stretch traversing through Pakistan to the Indian border that was well under $100 million a year.
According to Indian calculations, transit fee will form a small component of the gas price and is $0.1 per mmbtu. The major component of the price will be the well-head price and transportation costs.
There are two ways to bring this gas from Iran to India: via pipeline or on tankers. A pipeline is vastly cheaper. It’s cheaper to build a pipe over land than one which skirts Pakistan by going under sea. Getting the gas from Iran to India will add on a transport cost of another $1 per mmbtu over the 50 to 70 cents per unit at the well head. If the pipeline goes through Multan in Pakistan, India will have to pay transit charges of about 25 cents per mmbtu.
So, the final landed cost of pipeline gas works out between $1.75 and $2 per mmbtu. However, the two sides are quite clear that price of the piped gas has to be lower than the price of LNG imports from Iran. Experts say India is buying liquefied natural gas (LNG) at $4 per million cubic feet day (mmcfd). LNG appears somewhat more expensive than than piped gas, and much more so when transported long distances inland, Indian company Gas Authority of India Ltd gets cheap gas from the fellow government company Oil and Natural Gas Corp., and resells it for about $2.50/mmbtu. By pooling the domestic gas with imported, it can sell gas for $3.00-3.500/mmbtu (depending on volumes), instead of the $4.5+ that LNG might go for.
India and Pakistan will have to do some homework to get a correct picture on Iran’s offer. It is yet to be seen that how the two respond to Iran’s offer of $6 per mmbtu against their envisaged maximum price of $2.1 per mmbtu which is less than the price of LNG. There is a need for both countries to adopt a joint modus operandi for negotiating gas price with Iran which should be affordable.
Moreover, the two should work out to share knowledge about their respective studies on gas pipeline projects to rationalize the Iranian offer in conjunction with the prevailing gas pricing in both countries.
RASHID ASHRAF
Karachi
THIS refers to Rao Imran’s letter (May). I disagree with his view that Iran has the right to do whatsoever is deemed by its people and leaders to be in the best interest of its nation. If a country’s actions and interests conflict with the interests of the international community, of mankind as a whole, then it does not have the right to pursue them. Iran has not made clear their intentions. We do not know whether their nuclear ambitions are really for peaceful and benign purposes instead of for creating a nuclear arsenal.
Given Iran’s repeated statements of its intention to ‘wipe Israel off the map’, Mr Ahmadejinad’s belief that the end of the world is nigh -– in fact only a few years away — and that there is to be a huge apocalyptic battle between Muslims and the rest of the world, the prospect of an Iranian nuclear threat seems a very real possibility. Add to that the fact that Iran has not given the transparency required by the IAEA and has not opened up certain parts of its nuclear programme -– if its intentions be peaceful, why hide your programme? — and you will understand why the international community is in frenzy over this issue.
Mr Imran states that India poses more danger than Iran to the region owing to its ‘hostile and aggressive intentions towards all of its neighbouring countries’. Aside from the obvious hyperbole present in the statement may I ask how these intentions have been recently demonstrated? India’s relations with Pakistan and China have improved.
Its ties with Afghanistan are stronger than those of Pakistan. It is to become a major regional power in the coming years -– and a major economic power in the world -– and would not jeopardise this glorious future by having conflicts with its neighbours; quite the contrary.
India has also a strong and stable democracy. Its nuclear arsenal does not stand a chance of falling into the hands of religious zealots.
I would like to add though that I disagree with the Indo-US deal because I believe that all nuclear technology should be in the hands of an independent body — like the UN — which would then relegate it to different countries. Its purpose should be only for energy. But that perhaps is a utopian ideal.
Israel’s threats to Palestinian leaders, its ruthless occupation of Palestinian lands and flagrant abuse of human rights is not to be commended.
SAMI NOORSUMAR
Karachi
ACCORDING to a news item (May 2), the World Bank will provide $800 million to the Punjab government to support its ongoing three years’ education programme.
In another report in the same issue, the WB’s board is scheduled to provide a loan of $300 million under the second phase of poverty reduction support credit.
There are yet two more loans offered. In the preceding month, the ADB had offered a loan of Rs24 billion for the development projects in Karachi (April 9) and another loan by WB of Rs18 billion for improvement and maintenance of canal network in Punjab (April 14).
Loan for educational reforms or poverty reduction are not justifiable. Because of excessive corruption, most of the loan amount is embezzled. To quote an instance — after receiving the ADB loan of $350 million for “access to justice” in December 2001, “access to justice” is not any better today.
Similarly, earlier WB loans for poverty reduction hardly reached the poor and most of it had been pocketed by vested interests. In any case, funds for such projects should be found within national resources. By the way what about the sale proceeds of privatisation?
Pakistan had already a debt of $38 billion. If this amount had been sincerely injected into the economy, its impact on the social fabric of the country would have been quite different. But unfortunately, most of it appears to have gone into the pockets of some people.
Taking of further loans should stop forthwith to save the coming generations from debt crises.
The Supreme Court mercifully needn to take suo motu notice of the situation or some philanthropist to move the High Court and earn the gratitude of the poor masses.
ABDUL SAMAD KHAN
Karachis
DIGNITY, class and refinement are the features with which Naushad Ali had transformed Indian film music. Steeped in the knowledge of traditional north Indian music and having a profound understanding of Urdu poetry, he composed music with variety. For Mehboob Khan’s film Andaaz, his music was a reflection of the era’s cosmopolitan culture. For Vijay Bhatt’s Baiju Bawara he used traditional ‘raags’ to compose heart-melting devotional music. And for K. Asif’s Mughal-i-Azam it would have been difficult to infuse awe and majesty to the ‘darbar’ of Emperor Akbar without the glorious compositions of Naushad Ali.
Naushad composed a song entitled ‘Mohe bhool gaye saanwarya’ but in fact his remembrance in the collective cultural memory of South Asia is generated.
ASIM ARIF
Toulouse, France
WITH the privatisation of the KESC the exchequer is enjoying the sweet nectar while the end-users are tasting the bitter fruits of errant voltage and extensive load-shedding.
The prevailing tug-of-war between Wapda and the KESC over prices is another factor restricting supplies from Wapda. The KESC network, which stands obsolete and overloaded, is further burdened with new connections which cause breakdowns of high-tension lines and grid stations.
The privatisation commission should sanction a part of the proceeds to replace the antique network.
It is feared that if urgent steps are not taken the city of lights may become a derelict settlement surviving on candle power.
RAFI ADAMJEE
Karachi
CONSPIRACY theorists think that prolonged and persistent power breakdowns are because of a hidden complicity to create artificial shortages and force the government bodies, especially Nepra, to increase power tariff rates.
In countries where the investment environment is more consumer-protective instead of being ‘investor-firendly’, the same multinationals dare not go beyond their specified parameters of operations. Here, there is no stopping anyone from making out-of-proportion profits or making consumer suffer despite peeling the skins off their backs.
Ghouse Mohiuddin
Karachi
MOTIVATED by the letter of the press secretary to the president (April 21), I wish to narrate my experience with SSGC. Its website www.ssgc.com.pk and email ID feedback@ssgc. com.pk appearing on its monthly bills are dysfunctional is a sad commentary on the performance of its computer managers.
My billing complaint (March 21) emailed to it twice bounced whereupon I fed the same matter in the space provided in its website but it swallowed the text instead of generating an instant acknowledgement by return. However, after a week or so I had to exercise the last available option to deliver a physical letter at its office next to the Civic Centre, Karachi. This should provide food for thought.
A. RAUF SOZER
Karachi
THERE are a large number of real estate agents and real estate agencies operating in the country, with the annual turnover worth billions of rupees.Thousands of people are earning their bread and butter through real estate brokerage business, but the government for some unknown reasons has not so far paid any heed to regulate this business.
Regulating real estate brokerage business will be of great help for real estate agents, as well as for estate agency owners who are generating revenues for the government by successfully conducting real estate deals between property buyers and sellers. The real estate deals of properties are finally given a legal shape with the help of lawyers, by affixing stamp duty and giving registration charges to the area registrar.
The government should acknowledge the services rendered by the real estate agents and the real estate agency owners by issuing them business licences. There should be two types of licences: (1) estate agency licence and (2) estate broker’s licence. The government should take note and advise the relevant ministry to issue estate agency and estate agents licences from the fiscal year 2006-2007.
The estate agency licence should be issued for owners and operators of estate agencies whereas estate broker’s licence should be issued to individual estate broker, who works for an estate agency or works as a freelance estate broker. In both the cases, guarantees should be sought from estate agency owners and estate brokers.
It is unfortunate that there are no colleges or universities in the country which can conduct real estate brokerage business examinations and award a certificate, diploma, bachelor’s or master’s degree to a student, depending on his or her level of educational qualification who would like to choose a career in the business.
There are civilians of different age groups who are working in this field. This business is also backed by armed forces officers such as lieutenant commanders, majors, colonels who are also working in real estate brokerage business, after retirement.
Until such time colleges or universities start teaching the subjects the government should consider the people working in the real estate brokerage business as “professionals”, as they have been successfully conducting real estate brokerage deals between buyers and sellers, tenants and landlords of properties.
Time has come when the government should pay attention to the real estate brokerage business, so that services of real estate agents and real estate agency owners should be acknowledged and recognised as professionals in the market.
The Securities and Exchange Commission of Pakistan can play a significant role in drafting laws to protect the interest of the estate agencies and estate agents in the country, as well as of investors and property owners.
Although this particular segment of business could not catch the attention of high-ups in the government, nevertheless somebody has to start looking into the affairs of real estate brokerage business so that it should come on par with international standards of real estate brokerage business.
The demand of real estate professionals will grow in the market as the SECP is about to announce real estate investment trusts and the growing number of various multinational and local bank branches also need the services of real estate professionals to offer home loans for constructing houses.
SYED A. MATEEN
Karachi
IN spite of the fact that capitalist policies are being implemented in full swing, by the government, hardly any progress seems to have been made.
The government’s ongoing policies of selling vital assets of the nation such as the PTCL and Steel Mill only goes to show poor governance. Also, given the placing of Pakistan at ninth position, compared to 34th position last year, in the ranking of failed states by the Fund for Peace is testimony to the absolute failure of the policies and the present system.
After such a humiliating ranking if the present government truly stands for the vision of enlightenment and it must make a bold U-turn. It should halt the ongoing implementation of policies crafted to suit only imperial designs, and revive Islamic economic policies.
SHARIQUE NAEEM
Lahore
THE prime minister established a price control committee under the chairmanship of Dr Salman Shah, adviser to the prime minister for finance and economics. As per decision, the committee will control prices of consumer commodities and take appropriate action against profiteers and stock hoarders.
It has been noted that the committee did not take any action against responsible incumbents who are charging extra money. Sugar is still selling at Rs36 per kilo while fresh milk is being sold for Rs30 per kilo.
The price control committee has not yet played an effective role in bringing relief to the public. In order to create awareness about its existence among the general public, it is suggested that the committee through print and electronic media provide addresses and phone numbers — preferably toll-free —- so that the public can register their complaints. In addition to this, it should be elaborated that the powers and jurisdiction of the committee cover district and provincial levels.
NISAR AHMED
Karachi
THE governor of Sindh has decided to make Sharea Faisal billboard-free by June 30. His decision to uproot billboards which give an ugly look to the city and pose a threat to the lives and property of people should be appreciated. I wish governors of other provinces should take the same decision to safeguard the lives of civilians.
ROMA
Rawalpindi
ACCORDING to a report, an average 200 cars are registered every day in the capital. The total number of cars registered in Islamabad, a city of less than a million inhabitants, by March 2006 stood at an astounding figure of 215,500 -— one of the highest per capita in the world. While 17,639 cars were registered in 2003, the figure went up to 23,805 in 2004. The year 2005 witnessed registration of another 33,311 cars.
The country has achieved unprecedented phenomenal growth of passenger cars during the past few years. This growth will continue in the future as the government has freely allowed, since August last year, the import of new and second-hand cars. Pakistan is indeed a lucrative market not only for local car assemblers but also for car manufacturers abroad. Last year as many as 23,149 motor vehicles were imported and luxury cars had a significant share in the total import of 14,347 cars. The list of luxury cars and jeeps included 2,625 Toyota land cruisers, 1,274 Mercedes Benz, 799 Honda Accord, 552 Chevrolet 1600 cc, 286 BMW, 144 Mitsubishi Pajero, 77 Nissan Patrol and 30 Land Rovers.
To meet the ever increasing demand for luxury cars among Pakistani consumers, Mercedes Benz is setting up a car assembly plant in Karachi, while Porsche has opened a sales office in Lahore.
Other European car producers, such as Renault and Black Cab, are establishing plants in Karachi that will start production by early next year. Recently Rolls Royce announced its marketing network in Pakistan by releasing a full-page colour advertisement in national newspapers.
The massive import of cars and other vehicles is a major factor for having a record trade deficit of $8.62 billion during nine months of the current fiscal year.
HUSSAIN SIDDIQUI
Islamabad
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