ISLAMABAD, Sept 22: Foreign direct investment (FDI) in Pakistan in the first two months (July-August) of the fiscal year 2005-06 amounted to $225 million, up by over 108 per cent against $108 million of the same period last year.

Board of Investment (BoI) Chairman Wasim Haqqie told Dawn that the FDI in August stood at $106 million compared with $55.8 million in the same month last year, showing an increase of about 90 per cent. Detailed data would be released in a couple of days, he said.

He said Pakistan had attracted $1.524 million FDI during the fiscal year 2004-05, which was 61 per cent higher than the corresponding period of 2003-04. This also included $363 million FDI as privatization proceeds of 10 per cent first tranche of PTCL and $103 million second tranche of Habib Bank’s privatization.

Mr Haqqie said the FDI target for 2005-06 had been set at $3.3 billion, which would be achieved by extending all possible facilities and concessions to foreign investors, especially those in the housing and construction sector.

Asked as to why the government had fixed a conservative target of $3.3 billion FDI for the current year when $2.6 billion would be coming as privatization proceeds of Pakistan Telecommunication Company Limited (PTCL) alone, the BoI chief said Etisalat of the UAE had already paid an amount of $260 million as first instalment of PTCL’s bid money.

“Besides, many investors who have won major privatization transactions are paying bulk of their bid money by raising financing from the local banking sector. As such, since they are not bringing equity in the form of foreign exchange, the local fund raising is not included in the FDI,” he added.

Sources said that Ghaith Pharoon of Attock Group — the successful bidder of National Refinery Limited — had deposited about $230 million of equivalent local currency from its local business and financing arrangements from the banks.

Similarly, Warid Telecom also made an investment of about $200 million in Pakistan by raising financing from its local banks i.e. Bank Alfalah and United Bank Limited.

In the fiscal year 2003-04, the FDI in Pakistan stood at $949.4 million, which was 19 per cent higher than the corresponding period of 2002-03. This also included $198 million first tranche of the HBL sale proceeds.

Similarly, the FDI stood at $798 million in 2002-03, which was 65 per cent higher than $484.7 million in 2001-02. This also included $176 million privatization proceeds of United Bank Limited.

Pakistan attracted $9.3 billion foreign direct investment during the last 15 years since 1989-90.

Mr Haqqie said the federal government was doing a lot in luring domestic as well as foreign investment, but all the business opportunities were lying in the four provinces. “In fact, they should identify projects, market them and provide basic facilities like gas, water and electricity, but except Punjab, their performance is not up to the mark.”

The federal government was also not satisfied with the performance of 33 honorary investment counsels (HICs) appointed in 23 countries, he added.

The BoI chief said the flow of FDI during the last fiscal year stood at $1.52 billion, showing an increase of over 60 per cent when compared with $949 million of the year before. The $1.52 billion investment also included $363 million privatization proceeds of the first $260 million instalment of PTCL and $103 million second tranche of Habib Bank Limited.

He said if portfolio investment of $152 million was included, the total foreign investment during 2004-05 amounted to $1.677 billion.