KARACHI: Pakistan State Oil, the country’s largest oil marketer, says it is in talks with the government on a plan to acquire stakes in public sector energy companies and offset mounting debt it is owed by firms such as the national airline.
Stopping the pile-up of unresolved debt across Pakistan’s power sector, and ultimately settling it, is a top concern of the International Monetary Fund (IMF), with which Islamabad begin talks this month for a new long-term loan deal.
“Everything will be done through competitive bidding and we will participate and if we win, the stakes will be offset against (PSO’s receivables),” said Syed Muhammad Taha, the managing director and chief executive of state-backed PSO.
“That is our proposal and this is under consideration, so we are working with the government,” Taha said in an interview on Wednesday with Reuters, which is the first to report the plan.
Pakistan’s government, with a stake of about 25 percent, is the biggest shareholder of PSO, but private shareholders own the rest.
Government officials, including the petroleum minister and the information minister, did not reply to a Reuters request for comment.
Total circular debt in Pakistan’s power and gas sectors stood at 4.6 trillion rupees ($17 billion), or about 5 percent of GDP by June 2023, the IMF says.
Circular debt is a form of public debt that stems in part from failure to pay dues along the power sector chain, starting with consumers and moving to distribution companies, which owe power plants, which then have to pay fuel supplier PSO.
The government is either the biggest shareholder, or outright owner of most these companies, making it tough to resolve debt as fiscal tightening leaves it strapped for cash.
Among other steps sought by the IMF, Pakistan has raised energy prices to stop the build-up of debt. But the accumulated amount still has to be resolved.
Taha said the IMF reforms helped the sector by boosting creditors’ ability to pay, which will continue to improve.
PSO’s aggregate receivables from government agencies and autonomous bodies stood at 499 billion rupees ($1.8 billion), the largest share owed by gas provider Sui Northern Gas, whose largest shareholder is the government.
PSO’s annual report last year said the crisis of owed debt was a serious issue for it.
Taha said PSO had initially floated the idea of acquiring stakes or complete ownership of assets such as power plants in Nandipur in the northern Punjab province and Guddu in southern Sindh, as well as the government-owned holding entity for power generation companies.
It also discussed equity stakes in profitable public sector companies such as the Oil and Gas Development Co, he added.
PIA DEAL
Taha said PSO was also a part of the broader settlement framework for the privatization of Pakistan International Airlines, which would potentially include a “clean asset swap” and a stake in the airline’s non-core assets, such as property.
The government is putting on the block a stake ranging from 51 percent to 100 percent in debt-ridden PIA as part of the public-sector reforms sought by the IMF.
In March, media said the principal alone that PIA owed PSO for fuel supply amounted to roughly 15.8 billion rupees ($57 million).
Taha added that he expected modest growth in demand for petroleum products as the economy opens up, thanks to lower interest rates and higher disposable income.
As economic conditions improve, he added, PSO is working with big strategic investors from China and the Middle East to upgrade and expand its refinery arm, Pakistan Refinery Ltd.
PSO has a network of 3,528 retail outlets in addition to 19 depots, 14 airport refueling facilities, operations at two seaports, and Pakistan’s largest storage capacity of 1.14 million tons.
Pakistan’s PSO proposes swapping debt for stake in public sector companies
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Pakistan’s PSO proposes swapping debt for stake in public sector companies
- Stopping the pile-up of unresolved debt across Pakistan’s power sector and settling it is a top IMF concern
- PSO’s aggregate receivables from government agencies and autonomous bodies stands at about $1.8 billion
Improving energy resilience in Pakistan could avert 175,000 deaths by 2030, UNICEF says
- UN agency’s latest report says resilient energy supplies for schools can reduce dropout rates in Pakistan
- It says Pakistan has abundance of renewable resources that can be tapped to help children across the country
ISLAMABAD: A new study by the United Nations children’s agency says developing resilient energy systems to power health facilities in Pakistan could avert over 175,000 deaths by 2030.
UNICEF said improved energy resilience would also contribute $296 million to the country’s fragile economy over the next 20 years by reducing maternal, adult, and infant mortality.
The study, conducted by UNICEF’s Economist Impact Unit and released Friday, comes as Pakistan is experiencing an intense heatwave that has sickened thousands of people, further burdening the country’s health care system.
Temperatures in various parts of Pakistan soared as high as 49 degrees Celsius (120 degrees Fahrenheit) on Friday. Authorities are urging people to stay indoors, hydrate, and avoid unnecessary travel. Demand for power has surged because of the high temperatures, putting a strain on existing electricity sources.
UNICEF said resilient energy refers to reliable, flexible, accessible, and quality power supplies that can withstand and recover quickly from unanticipated shocks, such as power outages and floods.
It said more resilient energy supplies for schools would reduce dropout rates and improve children’s learning so they can earn more in the future.
“Children depend on schools, health centers, and safe drinking water for their survival, yet these facilities often don’t have the electricity supply to function optimally. As the current heatwave grips the country, electricity needs have skyrocketed, leading to shortfalls that can endanger children’s health,” said Abdullah Fadil, the UNICEF representative in Pakistan.
UNICEF said 3.5 billion people live without reliable power worldwide.
It said climate change is contributing to the disruption of generation and distribution of energy in Pakistan, where floods triggered by climate-induced monsoon rains in 2022 killed 1,739 people. It said almost half of the water infrastructure, such as storage tanks, wells and supply lines, was damaged by the floods.
This year, Pakistan recorded its wettest April since 1961 with more than double the usual rainfall for the month. Heavy rains last month killed scores of people and destroyed property and farmland.
Daytime temperatures in May have soared as much as 8 C (14 F) above average temperatures for the month over the last 20 years, raising fears of flooding in the northwest because of glacial melting.
UNICEF said it helped restore water systems for 350,000 people in 375 locations after the 2022 floods and has also implemented several solar electrification initiatives in Pakistan.
“Pakistan has an abundance of renewable resources and by investing in them we are tapping into a goldmine to help children,” Fadil said. “We need the private sector to play a bigger role as public sector resources will not be enough. This is everybody’s business.”
Pakistan PM to strengthen economic ties, meet top investors in China next week – foreign office
- Shehbaz Sharif will start his four-day China visit from June 4 to set the ‘future trajectory’ of the strategic ties
- PM will hold meetings with the Chinese president, senior officials and members of the business community
ISLAMABAD: Prime Minister Shehbaz Sharif’s upcoming four-day visit to China next week will prioritize meetings with top companies and investors, Pakistan’s foreign office said on Friday, highlighting the focus on strengthening economic ties between the two nations.
Earlier today, the PM asked Pakistani officials to carve out a “comprehensive plan” for business-to-business (B2B) engagements during his visit to China on June 4-8 as the South Asian country seeks to woo Chinese investors.
Sharif’s visit comes at a time when Pakistan is looking to boost foreign investment to support its fragile economy after averting a default last year, thanks to a $3 billion International Monetary Fund (IMF) bailout.
“An important aspect of the PM’s visit will be meetings with corporate executives of leading Chinese companies dealing in oil and gas, energy, ICT [information and communication technology], and emerging technologies,” foreign office spokesperson Mumtaz Zahra Baloch said.
She informed during her weekly media briefing Sharif would visit Beijing, Xi’an and Shenzhen, adding he would hold delegation-level talks with President Xi Jinping, Prime Minister Li Qiang, Chairman of the Standing Committee of the National People’s Congress Zhao Leji and heads of key government departments.
She said the PM would also address the Pakistan-China Business Forum attended by leading businesspeople, entrepreneurs and investors from both countries. He would also visit the economic and agricultural zones in China.
Baloch noted the cooperation between the two states during the visit would set the future trajectory of the Pakistan-China strategic partnership.
COUNTERTERRORISM
Asked if Islamabad had officially urged Beijing to talk to Kabul about the terror threat Pakistan faced, she said both countries had several channels of communication where everything including terrorism was discussed.
“So, these talks continue,” she said. “I am not in a position to share internal deliberations and privileged diplomatic conversations. Pakistan and China have been discussing issues relating to terrorism, relating to security of Chinese nationals in the country.”
The spokesperson informed the two countries had agreed to further strengthen cooperation in counterterrorism and security through a comprehensive approach.
“We have made a clear public statement about how we will work together to combat terrorism,” she added. “No attempt to undermine our cooperation and friendship will ever succeed.”
Earlier today, Pakistan’s interior secretary Muhammad Khurram Agha held a meeting with Afghanistan’s interim deputy interior minister Muhammad Nabi Omari in Kabul and shared with him findings of a March 26 suicide attack in northwest Pakistan that killed the five Chinese nationals and their Pakistani driver.
The Chinese workers were killed when a suicide bomber rammed his car into their vehicle while they were on their way to the Dasu hydropower project in Pakistan’s northwestern Khyber Pakhtunkhwa province.
Islamabad blamed the Tehreek-e-Taliban Pakistan (TTP) for the attack, with Pakistan’s interior minister saying last week the bombing was coordinated by TTP members from Afghanistan, asking Kabul to arrest and hand over the suspects involved in the crime.
Balochistan minister announces arrest of two suspects for killing Punjabi hair-salon workers in Gwadar
- The workers were asleep when gunmen stormed their residential quarter at night and fatally shot them
- A CTD statement says both suspects had been working for Balochistan Liberation Army for about a year
ISLAMABAD: A senior minister in Balochistan’s provincial administration announced on Friday the arrest of two suspects involved in the killing of seven Punjabi hair-salon workers earlier this month in the coastal Gwadar district, emphasizing the authorities would not tolerate armed groups disrupting peace in the area.
The attack on May 9 took place approximately 24 kilometers from central Gwadar city, where gunmen stormed a residential quarter at night, killing the workers from Khanewal district as they slept.
The incident marked the third attack against laborers from Punjab within a month in Pakistan’s restive southwestern province, which shares porous borders with Iran and Afghanistan, and has experienced a low-scale insurgency by Baloch separatist groups against the Pakistani state.
Baloch nationalists have long accused the Pakistani government and Punjab province of monopolizing profits from the province’s abundant natural resources, leading to complaints of political marginalization and economic exploitation.
However, during a news conference in Quetta, Balochistan Home Minister Zia Ullah Langau said it was incorrect to claim these groups were fighting for people’s rights by killing innocent citizens.
“Recently, an incident happened in Gwadar where our seven workers were killed,” he continued. “This was followed by false propaganda that they were intelligence agency employees. We instructed all our agencies, including the CTD [Counter Terrorism Department], that we cannot tolerate our poor citizens being targeted by these terrorists daily. Therefore, we gave strict instructions to arrest these murderers at any cost.”
“I will congratulate all our agencies like the CTD who worked hard to carry out the instructions given by the government,” he added. “Finally, we have captured two of the assailants involved in the killings in Gwadar.”
Langau noted the law enforcement agencies had recovered the weapons used in the killings.
He also mentioned the two suspects admitted during the investigations that their instructions were to kill anyone of Punjabi background.
The Balochistan minister pointed out that those involved in such violent activities only aimed to disrupt peace in the country.
The CTD said in a statement the arrested suspects had been working for the banned Balochistan Liberation Army (BLA) for about a year.
Pakistan rolls out 300 luxury buses in Makkah to enhance pilgrim transport during Hajj
- The religious affairs ministry has designated bus stops around the Grand Mosque to avoid any traffic hindrance
- Buses will operate around the clock to provide pilgrims the flexibility to travel to the mosque at their own convenience
ISLAMABAD: Pakistan’s religious affairs ministry said on Friday it was implementing a comprehensive transportation plan to ensure the smooth and comfortable travel of pilgrims within the holy city of Makkah by hiring 300 luxury buses.
Pilgrims from across the world are accommodated in various neighborhoods around Makkah during the Hajj season, with governments and private tour operators arranging their accommodations and providing transportation services to facilitate easier commuting to and from the Grand Mosque.
This arrangement is especially important given the huge influx of people in the city and the logistical challenges it presents.
Additionally, other forms of public transportation like taxis can become more expensive in Makkah due to the increased demand in the Hajj season. The provision of buses and other dedicated transport services can help mitigate these costs for pilgrims, making their overall experience more manageable financially and logistically.
“The government has hired 300 luxury buses to transport pilgrims from their residences directly to the Haram [Grand Mosque] in Makkah, Saudi Arabia,” the ministry informed in a statement. “The bus service is available around the clock in order to provide pilgrims with the flexibility to travel at their convenience.”
The ministry said bus stops had been constructed at four entry points surrounding the mosque to ensure efficient and organized transportation.
The pick-and-drop locations, it continued, were designated to ensure a smooth flow of traffic and minimize any congestion in the area.
“The government has assigned guides to assist pilgrims throughout their journey to further enhance the travel experience,” the statement added. “These guides help pilgrims travel through their designated routes, ensuring that they reach their destination without any difficulties.”
The ministry maintained it wanted a hassle-free transportation plan to ensure the pilgrims focused on their worship while carrying out their spiritual journey.
Over 42,000 Pakistani pilgrims have so far arrived in Saudi Arabia to perform Hajj.
The country has a Hajj quota of 179,210 pilgrims, of which around 70,000 people will perform the pilgrimage under the government scheme, while the rest will benefit from private tour operators.
The annual pilgrimage this year is expected to run from June 14 till June 19.
Babar defends loss in England, vows to step-up Pakistan performance in T20 World Cup
- Accepts that players are performing individually but unable to click as a team
- Babar Azam says players will ponder over mistakes like succumbing to pressure
ISLAMABAD: Pakistan skipper Babar Azam on Friday defended the cricket team’s performance against England, vowing to fix all mistakes ahead of the Twenty20 World Cup scheduled to begin on June 2.
England thrashed Pakistan by seven wickets at the Oval on Thursday in their last match before the race for the T20 World Cup title begins. Victory gave England a 2-0 win in a four-match T20 series with two games washed out without a ball bowled.
“I agree that we made mistakes in the middle overs during battling and bowling both,” Azam said at a press conference on Friday. “We will try and fix this as soon as possible.”
The skipper said it was important to take chances during high-scoring matches, adding that all team members would sit and discuss how they had read the situation wrong and succumbed to pressure after losing back-to-back wickets.
“We need to settle down after losing wickets to gain momentum again.”
Babar admitted that the team was struggling throughout the middle overs and urged his teammates to step up and take responsibility for the loss. He said though the team had collapsed during batting and bowling, their confidence remained high as they got to learn new things after facing a series loss.
When asked if the team was selected on merit, Azam said no one was given an extra edge and all players were chosen after a thorough discussion between seven selection committee members.
“We have to back the players that got selected,” Azam said.
Azam assured that the cricket team was right on track and that winning and losing were part of the game. However, he accepted that even though all the players were performing well individually, they were “unable to click as a team.”
“We are performing individually but not as a team,” he concluded. “We are lagging here.”
The Pakistan team flew out to the United States earlier today, Friday, for the T20 World Cup series.
