Category - Business News

Govt mulls proposals to end load shedding
Number of Chinese billionaires on the rise
Nepra announces higher tariff for wind power
Euro falls down after Italy debt rating
Plan to raise power tariff put on hold
CNG price hike upto Rs 6.30/kg likely

Govt mulls proposals to end load shedding

Federal Minister for Water and Power Naveed Qamar Friday said government is going through different proposals for bringing the power load shedding to zero in future.

Talking to the media at Parliament House, Naveed expressed that opposition is just criticising government and made Parliament a hub for communicating their ideas and recommendations.

He added that Ministry for Water and Power has formulated a new policy of wind power and foreign businessmen are showing interest in it. The respective system would help to add the power into the system at the earliest.

Federal Minister said power load shedding has completely ended from the country whereas to keep it at the same level in future, government is going through various proposals.  And those who won’t pay their bills in time then their connections would be disconnected.

He added that government would complete its plans in the allotted time frame in order to inject electricity into the system whereas opposition is politicising the load shedding.

Number of Chinese billionaires on the rise

Publisher of luxury magazines and runner of a research institute — Forbes crowned machinery tycoon Liang Wengen as the nation s richest man.

“Even though the stock market is going down, the wealth of the most successful people in China is going up,” Russell Flannery, Forbes senior editor and Shanghai bureau chief, told reporters.

He pointed to a domestic building spree, higher demand for consumer goods and breakneck growth as driving the increase in wealth.

“The high GDP (gross domestic product) growth rate simply gives a big platform and a lot of room for people to find new businesses,” he said.

Liang, co-founder of machinery company Sany, topped the Forbes list with wealth of $9.3 billion. The Hurun report estimated his wealth at $11 billion.

The construction tycoon moved to the number one spot from third last year, as China s building boom created demand for Sany s cranes and excavators.

In second place on the Forbes list was Robin Li, co-founder of China s top Internet search engine Baidu, with wealth of $9.2 billion.

Baidu has reaped gains from the partial exit from the China market of rival Google, after the US Internet giant clashed with Beijing over censorship.

Two brothers took third and fourth place — Liu Yongxing of East Hope Group, China s largest animal feed producer, and his younger brother Liu Yonghao whose company New Hope Group has interests ranging from feed to finance.

Beverage magnate Zong Qinghou of soft-drink maker Wahaha fell to fifth place this year from first in 2010.

The total wealth of the 400 people on the list was $459 billion this year, up from around $423 billion last year, Forbes said.

The United States currently has about 413 billionaires, according to a list released by Forbes in March.

Nepra announces higher tariff for wind power

ISLAMABAD: The National Electric Power Regulatory Authority announced on Thursday an enhanced upfront levelised tariff of 14.66 cents per unit for wind power projects.

The tariff will apply to wind power projects with installed capacity of 5-250MW and those achieving financial close by Dec 31 next year. The increased tariff will be valid for the first 1,500MW.

The tariff was determined on the basis of a proposal put forward by the Alternative Electricity Development Board which said that success could be ensured only if the tariff was lucrative, with margins of profit and made business sense of investments in the sector.

For the first time, Nepra set aside a normal course of tariff setting mechanism through in-house verification and approved the higher tariff in view of “the current power crisis, including acute shortage of electricity, over-reliance on thermal power, persistent trend of increase in oil prices in the international market coupled with depletion of gas reserves in the country and the high cost of generating electricity from imported fuels”.

Considering the advantages of generating electricity from wind, like shorter construction period, no fuel costs, no dependence on imported fuel, Nepra said it decided to facilitate the development of wind power.

Nepra had first approved an upfront tariff of 9.5 cents per unit in April 2006. It claimed that while a few projects opted for the upfront tariff none of them ultimately materialised. Apart from that, Nepra had determined tariffs for different wind projects that ranged between 10.2 to 11.9 cents per unit. On the basis of these tariffs, a project of FFC Energy of 49.5MW achieved financial close in June this year while Zurlu project installed a plant of 6MW.

Nepra said it had approved an increased tariff because it thought that determining tariff on a case-to-case basis under a cost-plus regime was bound to cause some delays due to nature of the process involved.

It said the upfront tariff would minimise uncertainty and reduce tariff approval time to 10 working days of filing of application from usual four to six months.

In a positive development, however, the regulator on the request of the AEDB has decided that the power purchaser (the government entities) would not take the wind risk, which would now be the responsibility of the investor.

Nepra said the upfront tariff was a “take it or leave it package deal”. Any request for modification in tariff or any term of the deal, to meet the specific or unique requirements of any project would not be considered by Nepra. The upfront tariff will remain applicable for 20 years of project`s life.

Euro falls down after Italy debt rating

The euro came under pressure in Asia Wednesday after Moody’s downgraded Italy’s debt rating, fuelling worries over eurozone debt and the impact of a possible Greek default on the global economy.

The euro fell to $1.3284 in Tokyo trade from $1.3338 in New York late Tuesday. The single currency also sagged to 101.82 yen from 102.14 yen.

The dollar inched down to 76.65 yen from 76.82 yen.

“The market is jittery about political wrangling hampering aid to Greece after the eurozone finance ministers’ meeting has shown no immediate action and need for more time,” said Teppei Ino, analyst at the Bank of Tokyo-Mitsubishi UFJ.

Two-day talks between European finance ministers wrapped up with no fresh news Tuesday, while Athens was denied the next eight-billion-euro ($10.7 billion) tranche of bailout money it needs to avoid defaulting on its debts.

Ratings agency Moody’s on Tuesday downgraded Italy’s government bond rating by three notches from Aa2 to A2 with a negative outlook, citing risks for the financing of long-term debt and slow economic growth.

The move poured cold water on sentiment after the euro gained and US stocks saw a last-minute rally overnight.

A Financial Times report that EU officials were studying ways to safeguard banks exposed to debts of financially weak eurozone governments had temporarily eased the market’s worries, dealers said.

But its effect proved short-lived. The Nikkei stock index in Tokyo lost ground shortly after opening in positive territory.

“These articles are not saying they have done anything, all they are saying is that they are willing to talk about it,” HiFX Senior Trader Stuart Ive told Dow Jones Newswires.

EU officials demanded Greece make more sacrifices and warned banks may have to shoulder more losses as part of the resolution of the debt crisis.

Barclays Capital chief Japan strategist Masafumi Yamamoto said that chances are increasing that additional support to debt-ridden Greece will be delayed, which should weigh on the euro.

“Gains in the euro we saw on Tuesday in New York are not long-lasting, and we will likely see the euro falling below 101 yen again,” Yamamoto said.

Plan to raise power tariff put on hold

ISLAMABAD: The federal government seems to have shelved a plan proposed by a cabinet committee on energy to raise electricity tariff by 12-16 per cent so as not to give ammunition to the agitation that has convulsed Punjab this week and which threatens to rage out of control after PML-N chief Nawaz Sharif called upon his party to lead the protest.

As a result of changing political scene and aggravating street protests against loadshedding, a ‘special emergency meeting of the federal cabinet’ scheduled for Wednesday (Oct 5) has been postponed until Oct 12, sources told Dawn.

They said the federal government had made up its mind to go ahead with energy conservation measures through a majority vote from the provincial chief ministers. If the chief ministers of Sindh, Balochistan and Khyber Pakhtunkhwa supported two weekly holidays and early closure of markets, the majority decision would be enforced in three provinces and the Punjab leadership would have to adopt its own course of action.

A cabinet member requesting anonymity confirmed that the special cabinet meeting was postponed after a threat by the PML-Q to boycott it and support protestors because they could not afford to disappoint their voters in Punjab being supported by the PML-N.

The sources said the feedback received from Punjab Chief Minister Shahbaz Sharif for two weekly holidays and early closure of business and trade had been a disappointment. He is reported to have conveyed that two weekly holidays would disconnect Pakistani businesses with the entire world and badly affect domestic trade activities.

The sources, however, declined to specifically confirm if the feedback was the result of a direct contact with the Punjab chief minister after prime minister’s directions issued in a special meeting on energy on Monday.

After the consent from three provinces, the federal government would announce two weekly holidays, business closure at 8 or 9 pm, electricity supply to wedding halls till the midnight and a ban on the use of air-conditioners in all government offices before 11 am.

Officials said the capital injection ordered by the prime minister on Monday had helped enhance power generation by about 2,600MW as fuel supplies were augmented to Hubco and Kapco.

The sources said the federal government also planned to start a ruthless campaign against electricity theft with increased penalties and legal action. Simultaneously, the officials of the power companies, if found assisting electricity theft or lenient in recovery of dues, would face departmental action.

CNG price hike upto Rs 6.30/kg likely

ISLAMABAD: After an incessant hike in petrol price by Rs 4.15 per litre hitting the nation in the wee hours on Friday, the federal government is likely to raise Compressed Natural Gas (CNG) price by Rs 6.30 per kilogram during current month.

Sources said that CNG association has pleaded government to increase price of gas by Rs 2/ kg, saying that heavy usage of generators for smooth functioning of CNG pumps in the face of unprecedented electricity load-shedding, has resulted in additional burden of expenses upon owners.

On the other hand the price of LPG has been reduced by Rs 5 a kilogram turning out to be an overall reduction of Rs 60 in price of a domestic cylinder while the price of a commercial cylinder is down by Rs 240 in open market

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