ISLAMABAD, July 23: The government has decided to enhance the foreign investment target from $1 billion to $1.25 billion during 2004-05 against $950 million of the last financial year.

Official sources told Dawn here on Friday that the ministry of privatization and investment would soon be announcing an increase of $300 million in the foreign investment target for the current fiscal year.

The government believed that ever since the security environment has improved in the region due to lessening of tension with India and Afghanistan, there existed more opportunities to enhance foreign investment in the country.

However, sources conceded that lack of adequate industrial infrastructure would continue to be a major problem to attract sizable foreign investment. In this behalf the facility of not having timely power and gas connections was causing problems to both the local and foreign investors.

"Also we need to build new roads and bridges as part of the good industrial infrastructure to attract the investors in our part of the world", a source said adding that foreign investors especially overseas Pakistanis were desperately looking for adequate infrastructure to set up new industries in the country.

Sources said that existing multinational companies were also complaining about the inadequate infrastructure facilities due to which they were constrained to make additional investment in Pakistan.

They said that power, gas and telecommunication sectors were showing tremendous growth and could further improve, provided effective industrial infrastructure facilities were ensured by the government.

"We have received about 35 Expressions of Interest (EoIs) for generating 7500 MW of electricity but they cannot be materialized unless the government provides them the required infrastructure facilities", another source said.

Sources said a number of companies were looking for gas connections which were not being provided by the gas companies. Sui Southern Gas Company has informed the authorities that it was committed to provide gas to various companies and that before 2009, it could not entertain new gas applications.

They said that there were four ways of producing power - hydle, coal, gas and nuclear - and the Private Power Infrastructure Board (PPIB) will have to properly look after these four sectors so that electricity requirements of the country could be met.

"Except for coal power project at Thar where China plans to install 600 MW of two power projects, each 300 MW, one does not see much activity in other three sectors", a source said. He said some of the hydle projects to be installed in NWFP and Azad Kashmir needed to be monitored so that they could be commissioned in time.