Pakistani Economic Stress Watch

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bharathp
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Re: Pakistani Economic Stress Watch

Postby bharathp » 18 Jan 2021 22:27

in broad strokes, the US is unable to decide if it wants to lose TSP completely over to chin side (hence still on grey list and not black list). KSA has definitely turned around and TSP needs to pay another tranche this month I believe.

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Re: Pakistani Economic Stress Watch

Postby Vips » 18 Jan 2021 22:38

The galloping gap- Monster of circular debt.

Bad governance is the overwhelming source of the circular debt build-up that is officially projected to cross the Rs2.8 trillion mark by June 30. This is almost half of the country’s about Rs5.5tr total tax revenue this year. :lol:

This means an addition of Rs500 billion during the current fiscal year at an average rate of almost Rs42bn per month, according to a report submitted by the Power Division to the Cabinet Committee on Energy (CCOE) last week.

The report is based on actual verified data of the circular debt as of Nov 30, 2020 and projected over the remaining period of 2020-21. It contains the breakdown of the circular debt in terms of operational/non-operational, comparison of last and current year’s build-up, and paid/unpaid and budgeted/unbudgeted subsidy payments.

Strikingly, the combination of lopsided decision-making, inaccurate projections, poor management and inefficient operations, non-payment by the public sector and a handicapped regulatory mechanism emerge as the root cause of the debt build-up. Simply put, the government is responsible for the mess.

The circular debt will increase by Rs152bn in 2020-21 due to distribution losses (Rs35bn) and under-recoveries (Rs117bn)

The outcome, however, is the multiplying costs to the honest and paying consumers in the shape of repeated tariff increases in various shapes and heads – another hike of about Rs3.34 per unit is on the cards. The government legally empowers power companies through the regulatory process to charge the cost of a little over 15pc losses in tariff besides the cost of bad governance and non-payments in the shape of the financing cost surcharge, quarterly and monthly adjustments and taxes.

The last fiscal year ended with a circular debt of Rs2.15tr, with an annual increase of Rs538bn or a monthly increase of Rs44.8bn. As of Nov 30, 2020, the total circular debt increased to Rs2.3tr, showing an increase of Rs156bn in the first five months or Rs31.2bn per month. During the same five months last fiscal year, the circular debt had increased by Rs179bn at the rate of Rs35.8bn per month.

Of the stock of Rs2.3tr on Nov 30, 2020, Rs1.2tr is payable to independent power producers (IPPs), Rs996bn parked in Power Holding Private Ltd (PHPL) of the Power Division and Rs97bn payable by generation companies to fuel suppliers. The payables to IPPs are estimated to surge beyond Rs1.7tr by the end of the current fiscal year while two other components will remain almost unchanged, making the total circular debt equal to Rs2.8tr.

This means the Power Division projects an increase of Rs500bn in the circular debt from December to June (seven months) at the rate of Rs71.4bn per month :D . The overall increase in the full fiscal year will be around Rs655bn at an average of almost Rs55bn per month. This addition will be despite the recovery of Rs225bn on account of prior-year adjustments. Otherwise, the debt addition would have been about Rs880bn.

Based on a template provided by the CCOE, the Power Division has projected that the circular debt will increase by Rs152bn in the current fiscal year due to distribution losses (Rs35bn) and under-recoveries (Rs117bn). A total of Rs317bn subsidy was required on the basis of existing tariffs but the Ministry of Finance had budgeted only Rs144bn, leaving an unbudgeted subsidy gap of Rs177bn :) . The interest charges on delayed payments to IPPs and PHPL mark-up are projected to add Rs143bn, including Rs80bn additional mark-up to IPPs in 2020-21.

On top of that, the addition of Rs97bn will be on account of non-payments by K-Electric and Rs313bn due to the pending generation cost on account of quarterly tariff adjustments and fuel cost adjustments.

The report also explains contributory factors to the existing Rs2.3tr circular debt. These include Rs212bn of non-payment by K-Electric (about 11pc), Rs144bn of outstanding amounts of Azad Jammu and Kashmir (7pc), Rs306bn of non-payment by Quetta Electric Supply Company’s agriculture tube-wells (15pc), Rs270bn limitations and delays in regulatory approvals (14pc), Rs66bn payment of interest on the power-sector debt held by PHPL (3.3pc), Rs260bn non-payment of subsidies (14pc) and Rs752bn of operational inefficiencies (37.4pc).

The report noted that the circular debt should have gone up by Rs848bn during the last fiscal year, but it was contained through Rs309bn worth of tariff increases on account of prior-year adjustments, resulting in the debt build-up of Rs538bn. Similar prior-year adjustments in tariff already being charged to consumers will generate Rs225bn in additional revenue and help restrict the debt build-up to about Rs500bn during the current fiscal year.

Some of the biggest challenges to address the build-up of the circular debt remain the controversies around the settlement of outstanding dues with K-Electric along with the untouchable China-Pakistan Economic Corridor (CPEC)–related power projects, which could have been absorbed by a growing economy but have become a headache owing to economic depression.

The outcome of renegotiated agreements with IPPs, reduction in the rate of return on equity of government-owned power plants and closure of inefficient Gencos are expected to provide some respite going forward, but the actual impact will be felt in the next fiscal year. Here again, the greater part of breather will accrue only on account of the parking of some losses in other accounts like replacement of ROE on hydropower plants from Wapda to the federal budget. :D

The outstanding amounts of Azad Jammu and Kashmir (AJK) are being addressed through the removal of the AJK tariff differential for which a summary has already been moved. But this too will require that the financial gap will have to be picked up in the budget. A similar arrangement will have to be put in place in the matter of Quetta Electric. To what extent the provincial government can foot the bill is yet to be seen and hence a large part will fall back on the federal government. Mashallah

The easiest way out to a limited scale is the tariff increase for consumers that the government already decided to an extent of Rs2 per unit of about Rs200bn per annum. A similar low-hanging fruit appearing on the government radar is the tariff rebasing by the regulator to reduce the impact of delay in tariff determinations and their delayed notifications. An amendment to the Nepra Act to allow the financing of PHPL debt through consumer tariff is already pending approval in parliament.

And now the piece de resistance - But despite all these additional burdens on consumers, the authorities concerned still appear resisting technological interventions to reduce system losses and improve recoveries. The Ministry of Information Technology has put on the record that a meter-less smart metering system successfully tested and proved on the ground was being resisted by the power sector authorities since November 2018. :rotfl:

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Re: Pakistani Economic Stress Watch

Postby kit » 18 Jan 2021 23:13

Vips wrote:The Ministry of Information Technology has put on the record that a meter-less smart metering system successfully tested and proved on the ground was being resisted by the power sector authorities since November 2018. :rotfl:


The meterless smart metering system is almost the norm in every major country, what's their problem ?!

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Re: Pakistani Economic Stress Watch

Postby kit » 18 Jan 2021 23:15

bharathp wrote:in broad strokes, the US is unable to decide if it wants to lose TSP completely over to chin side (hence still on grey list and not black list). KSA has definitely turned around and TSP needs to pay another tranche this month I believe.


looks the chinis have done the thinking for them., the latest round of "debt service and loan" talks between the chinks and pakis will make sure of that :rotfl:

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Re: Pakistani Economic Stress Watch

Postby Vips » 19 Jan 2021 00:18

Clock ticking on $1b UAE cash facility.

The United Arab Emirates (UAE) has not yet indicated that it wants to withdraw $1 billion cash support – maturing next week – to Pakistan. The facility can be extended for one more year.

Moreover, Islamabad is set to repay the remaining $1 billion to Riyadh that is also maturing on the same day – January 24 – said sources in the Ministry of Finance.The return of the third and final loan tranche of $1 billion to the kingdom would mark the end of the $6.2 billion financial support package that Riyadh had provided to the country for three years in October 2018. The kingdom had withdrawn the $3.2 billion deferred oil financing facility in May last year and the cash assistance between July and January 2020-21. The original timeframe for returning the loan was 2022.

The UAE had also announced a $6-billion package for Pakistan. This included $3 billion in cash injection and another $3 billion in oil supply on deferred payments. It disbursed $2 billion cash but withdrew the oil financing facility.

The sources said the UAE $1 billion loan was maturing on January 24, with an option that the facility can be extended for one more year under the original deal. They said that the Gulf country has not yet intimated Pakistan to withdraw the loan.“In case it does not withdraw the facility, the loan would be considered extended for one more year,” a senior finance ministry official told The Express Tribune on Friday. The ministry did not officially comment on the matter. It was a “bilateral confidential matter”, said the finance secretary in a brief response.The government was apprehensive that after Saudi Arabia’s decision to withdraw its bailout package, the UAE might also follow suit.

The sources said that Pakistan secured three different loans from China to return the Saudi debt, including the last tranche of $1 billion.“Beijing gave $1 billion soft loan and two separate financing lines of $1.5 billion and $500 million to pay back the Saudi debt,” the sources told The Express Tribune.

After coming into power, Prime Minister Imran Khan had twice flown to Saudi Arabia to secure the package, which provided space to the first-timer PTI government to negotiate a deal with the IMF.

The government has also not been able to get the suspended $6 billion IMF programme restored. The PTI government is in the process of implementing two key conditions of introducing a mini-budget and increasing electricity tariffs Ab tera ky hoga Abdul. :lol:

The central bank’s gross foreign exchange reserves of $13.4 billion remain fragile, as these are largely built by taking loans. The net short-term loans taken from the commercial banks amounted to $4.6 billion as of end November last year. The loans are double-booked in both the commercial banks reserves and the central bank gross reserves. :rotfl:

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Re: Pakistani Economic Stress Watch

Postby mody » 20 Jan 2021 14:16

https://www.msn.com/en-in/news/world/ch ... d=msedgntp

Pakis getting screwed by the chinis in the CPEC contracts. Looks like East India Company all over again for the pakis. The Chinese companies and banks will bleed the pakis dry. Another 5 years and the Pakis won't know what hit them. The chinese companies might just take over a lot of assets in lieu of payments and government guarantees.

Miss the regular updates by Peregrine on this thread!! Has been missing in action for a while.

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Re: Pakistani Economic Stress Watch

Postby Manish_P » 20 Jan 2021 14:45

Well maybe the other of the four fathers will step in to restart the gravy train.. (as expected)

Biden administration to revive military-to-military ties with Pakistan

The Biden administration sees Pakistan as an “essential partner” in any peace process in Afghanistan and believes that “continuing to build relationships with Pakistan’s military will provide openings for the United States and Pakistan to cooperate on key issues,” says its nominated defence chief Gen Lloyd J Austin.

Gen Austin made these remarks during his confirmation hearing for the post of secretary of defence before the United States Senate Armed Services Committee on Tuesday.

“Pakistan is an essential partner in any peace process in Afghanistan," Austin, a former head of the US Central Command, told the committee. "If confirmed, I will encourage a regional approach that garners support from neighbours like Pakistan, while also deterring regional actors, from serving as spoilers to the Afghanistan peace process.”

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Re: Pakistani Economic Stress Watch

Postby chetak » 20 Jan 2021 15:43

Manish_P wrote:Well maybe the other of the four fathers will step in to restart the gravy train.. (as expected)

Biden administration to revive military-to-military ties with Pakistan


here we go again.

the great US deep state simply cannot stop playing games with jehadi turds and they are back again.

There will be a blowback on India and Modi will cool off to any further US overtures as the conflict of interest, Indo pacific and af pak is no more covert.



and now, the covid vaccines for the paki elites will also come for free from the US.

the rest may have to make do with cheap chinese knockoffs like sinovac

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Re: Pakistani Economic Stress Watch

Postby Philip » 20 Jan 2021 17:11

The US establishment,esp. the CIA,StateDept.,are so hooked onto the drug of Pak covert ties,that they can't give it up.At stake is control of the Afghan drug trade,where the ISI-well known,CIA- not so well known, have profited immensely for decades from control of it in later years through the Talibsn. It is the billions involved that keeps the US on the Paki hook.

It was Bill Clinton who gave Pak a free pass to acquire nuclear weapons through China and the Biden team draws deep from the Obama- Clinton clique. Our FM Jai,who has been extremely pro-active in promoting a US- India alliance will have to rethink his strategy just as his China appeasement policy camf crashing down into thd dust after Galwan. Should rhe US resume any kind of military cooperation with Pak it would be a betrayal of India's support to the US on Asia-Pacific security, against China, and seriously question whether we should remain in the Quad or be better served with creating our own Indo- Pacific security apparatus and establish bi-lateral security agreements with Japan,Indonesia,the Phillippines,Vietnam,etc.

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Re: Pakistani Economic Stress Watch

Postby Kashi » 20 Jan 2021 17:20

Philip wrote:It was Bill Clinton who gave Pak a free pass to acquire nuclear weapons through China.


I think you mean missiles.

Napakis reportedly got the nukes in 1980s, unless you meant the nukes that Cheenis apparently transferred to Napakis after their duds in 1998.

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Re: Pakistani Economic Stress Watch

Postby Vips » 26 Jan 2021 03:13

Amid ailing economy, Imran Khan to mortgage Islamabad's biggest park to get loan.

To overcome Pakistan's ailing economy, Prime Minister Imran Khan is considering mortgaging Islamabad's biggest park to get a loan of around Rs 500 billion.

According to a report by Dawn, the proposal to mortgage the F-9 park to get a loan of around Rs 500 billion will be included in the agenda of the
next meeting of the federal cabinet, scheduled to be held on Tuesday.The meeting will be held via video conference arranged at the Prime Minister's House and a committee room of the Cabinet Division.

The F-9 park, named after Madar-i-Millat Fatima Jinnah. :rotfl: is stretched over759 acres of land. It is one of the largest covered green areas in Pakistan. (Subahnallah Fatima Jinnah is dead or else the pak jabi army and its puppet PM would have even pledged her to do menial jobs in arab countries to meet their expenses)

Citing reports, Dawn highlighted that this decision has been taken due to the financial issues being faced by the government.

This comes amid declining relations of Pakistan with its two biggest sources of foreign remittances and foreign exchange - Saudi Arabia and the United Arab Emirates (UAE).

Last August, Saudi Arabia asked Pakistan to repay early a $3 billion soft loan, Islamabad tried to defuse the tensions by quickly dispatching its current army chief General Qamar Javed Bajwa. However, Saudi Arabia did not budge from its demand. :lol:

The UAE, which is Pakistan's second-largest source of foreign remittances, has recently banned issuing work visas for Pakistani workers. :D

Foreign minister Shah Mahmood Qureshi's recent visit to the UAE failed to lift the ban, to Islamabad's severe disappointment. ( :twisted: Modi)

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Re: Pakistani Economic Stress Watch

Postby nam » 26 Jan 2021 04:05

Feel so sorry for Pak and it's gov.

Hope we are being a good neighbor and publicly announce that we are buying more arms to deploy them against Pak on IB & LoC.

It is important that Pak maintains superiority over India, even if Pak Gov has to eat grass..

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Re: Pakistani Economic Stress Watch

Postby Ashokk » 26 Jan 2021 04:18

Why China-Pakistan ties are 'unraveling' over CPEC
NEW DELHI: The multi-billion dollar Belt and Road Initiative (BRI) appears to have driven a wedge between all-weather allies China and Pakistan.
Sharp differences have emerged between the two countries over a $6.8 billion railway line project which is part of the ambitious China Pakistan Economic Corridor (CPEC), according to a report in Nikkei Asia.
The impasse has even led to an indefinite delay in the annual bilateral CPEC summit, claimed the report.
This is not the first that CPEC has triggered a strain in the long-standing friendship between the two countries.
Here's why China-Pakistan ties are in troubled waters these days ...
Fallout over rail project
Pakistan has been expecting China to lend $6 billion at a concessional interest rate of less than 3% for the Main Line-1 project. The Imran Khan government had even hoped to finalise the lending at an interest rate of just 1%.
But to Islamabad's chagrin, China has shown increasing reluctance over lending money for the project.
The project includes dualisation and upgrading of the 1,872-km railway track from Peshawar to Karachi and is a major milestone for the second phase of CPEC.
A Pakistan-based journalist told Nikkei Asia that China is not happy about lending the money since Pakistan has already sought debt relief to meet the G20 lending conditions and is not in a position to give sovereign guarantees.
The journalist said that China's appetite for investments in large infrastructure projects has diminished because these projects are vulnerable to local politics that delay returns on investment for Beijing.
In December last year, China had even sought additional guarantees before sanctioning the loan in view of Islamabad's weakening financial position.
It had proposed a mix of commercial and concessional loans to fund the rail project, going against Islamabad’s wishes of "cheapest lending".
A Pakistani official had said that China raised the additional guarantees issue to get clarity over Pakistan's financial condition after Islamabad applied for debt relief from the G-20 countries, which is only meant for the world's poorest nations.
Pakistan is currently renegotiating its $6 million extended fund facility at the International Monetary Fund (IMF), which was suspended in April 2020.
The IMF will reportedly resume the programme only if Pakistan does not take out any new commercial loans, and that is one of the reasons it is looking for concessions on loans for the ML-1 project, according to Nikkei Asia.
CPEC summit delayed
The Joint Cooperation Committee (JCC) is the primary decision-making body of CPEC.
Its first meeting was held in August 2013 and the latest one in November 2019.
The report said that the 10th JCC was originally scheduled for early 2020, but has not taken place so far.
It said that Covid-19 pandemic was initially cited as the reason behind the postponement but sources later revealed that delay has been caused due to disagreements over the railway project and special economic zones.
Sources told Nikkei that the meeting will not take place for at least three more months - by far the longest gap to date.
As a result, Pakistan's desire to start work on the package-1 from January 2021 would remain unfulfilled due to delay in finalisation of financing details.
Spate of concerns
Discontentment between the two allies had been brewing ever since China decided to tighten its purse strings amid concerns over its investments in Pakistan.
Another report on Nikkei had recently said that China is slowly backing away from CPEC due to Islamabad's spiraling debt, series of corruption scandals and rising security costs.
China has rejected claims that it's turning its back on CPEC but other media reports, coupled with the continuous delay in the CPEC summit, seem to confirm that it is wary of pumping more money into the debt-ridden country.
According to Asia Times, only 32 out of the 122 projects under CPEC had been completed till the third quarter of the fiscal year.
Corruption scandals
Besides concerns over Pakistan's ballooning debt, Beijing is also believed to be unhappy about reports of corruption involving Chinese companies that are part of the CPEC projects.
A recent report on Nikkei said that a probe by the Security and Exchange Commission of Pakistan (SECP) found irregularities worth over $1.8 billion in the power sector, with many Chinese firms receiving undue subsidies.
This was further corroborated by another report on Asia Times recently, which said China's "illegal profiteering" from the power sector was in fact the reason behind the nationwide blackout in Pakistan earlier this month.
Citing a report of the nine-member committee, a former chairperson of the Security and Exchange Commission of Pakistan (SECP) FM Shakil made startling revelations about widespread malpractice in the power sector.
The report lifted the lid on the extent of Independent Power Producer (IPP) corruption, including among Chinese units installed under a government-to-government arrangement for China-Pakistan Economic Corridor (CPEC) related operation.
It traced 100 billion Pakistani rupees ($625 million) in annual over-payment to the IPPs and discussed the magnitude of illegal "profiteering" of Chinese energy companies.
China has earmarked $30 billion for Pakistan's energy sector through CPEC funds. Several Chinese IPPs have been involved in the construction of as many as 27 power plants in Pakistan with a total installed capacity of 12,000 MW under the CPEC programme, reported Asia Times.
"Analysts, however, have questioned the viability of these energy projects, primarily because most of the Chinese investments focused on power generation and ignored the distribution of power, which is clearly in a shambles judging by the recent blackout," expressed Shakil.
Opposition heat
Adding another layer of controversy is the role of the CPEC Authority chairman Lt General Asim Saleem Bajwa (retd).
Last week, the opposition parties staged a walkout from the Senate session over the Pakistan government's "inadequate" response to their queries on the CPEC Authority ordinance, reported Dawn.
The CPEC Authority ordinance is largely seen as an attempt by the Pakistan government to allow the military greater control over the CPEC projects.
The proposed law will allow Bajwa to replace the planning minister as co-chair of a Pakistan-China joint committee and eliminate the role of the planning ministry as an administrative division.
Bajwa is already a controversial figure in Pakistan who is said to have amassed millions of dollars of late.
The opposition had even questioned the meeting of Bajwa with the Chinese ambassador when the CPEC Authority had no chairman and the CPEC Authority's ordinance had lapsed.
"Is [retired Lt Gen] Asim Saleem still receiving the salary of the chairman of CPEC Authority?" questioned Pakistan Muslim League-Nawaz (PML-N) Senator Muhammad Javed Abbasi. Meanwhile, Jamaat-i-Islami Senator Mushtaq Ahmad asked in what capacity did Bajwa meet the Chinese ambassador.
Ahmad said Bajwa was a "controversial" figure and yet he was made chairman of the CPEC Authority, adding that there were allegations of corruption against Bajwa.
He further said that "in the future, no such individual, who has allegations of corruption against them, should be appointed chairman of the CPEC Authority."
Earlier, local media had exposed Bajwa's several offshore businesses, including more than 100 companies and franchises in the US, UAE and Canada in which his families were involved.

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Re: Pakistani Economic Stress Watch

Postby khatvaanga » 26 Jan 2021 08:31

Vips wrote:To overcome Pakistan's ailing economy, Prime Minister Imran Khan is considering mortgaging Islamabad's biggest park to get a loan of around Rs 500 billion.

The F-9 park, named after Madar-i-Millat Fatima Jinnah. :rotfl: is stretched over759 acres of land. It is one of the largest covered green areas in Pakistan.


500 billion for a 759 acre land. isn't it a bit steep? About 4000 crs per acre if my calculation is right. even Bombay has lower cost than that!!

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Re: Pakistani Economic Stress Watch

Postby Aditya_V » 26 Jan 2021 09:00

Can anyone tell what is the use of the mortgage, can a foreign country build say a palace and why would they want to spend such money in Pakistan rather than their native land. Doesn't make sense. After all Pakis security forces will control all access.

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Re: Pakistani Economic Stress Watch

Postby Vips » 26 Jan 2021 09:16

khatvaanga wrote:
Vips wrote:To overcome Pakistan's ailing economy, Prime Minister Imran Khan is considering mortgaging Islamabad's biggest park to get a loan of around Rs 500 billion.

The F-9 park, named after Madar-i-Millat Fatima Jinnah. :rotfl: is stretched over759 acres of land. It is one of the largest covered green areas in Pakistan.


500 billion for a 759 acre land. isn't it a bit steep? About 4000 crs per acre if my calculation is right. even Bombay has lower cost than that!!


1 billion = 100 crore Paki Rs. So total = 50,000 Crore. Per acre figure comes to around 66 Crores Paki currency which still is high for real estate price in shitland.

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Re: Pakistani Economic Stress Watch

Postby bharathp » 26 Jan 2021 09:27

Aditya_V wrote:Can anyone tell what is the use of the mortgage, can a foreign country build say a palace and why would they want to spend such money in Pakistan rather than their native land. Doesn't make sense. After all Pakis security forces will control all access.


this "mortgage" is similar to India or any govt issuing "bonds". however, when a bond is issued, you are essentially loaning money to the govt and the govt pays interest. however, interest is "haraam" in islam and hence the govt cannot provide bonds.
to get around this a "sukuk bond" is issued.
a "sukuk bond" can only be backed by a real asset (like property, a company etc). when you buy a sukuk bond, you are not "loaning" the money but "buying" a part of that property. until the period of the bond (until maturity), you get portions of the returns from that property. and at the maturity, you get the bond value "at par" - meaning - if the land value of that asset increases, the givt buys back that sukuk bond at the value. hence the sukuk bond circumvents the provision of "interest" and still pays the bond holders a return.

hence Pakistan has to mortgage its lands. Malaysia was the first country to initiate sukuk bonds.

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Re: Pakistani Economic Stress Watch

Postby Aditya_V » 26 Jan 2021 09:35

That makes sense, so it's not mortgage in the traditional sense but a loan which complies with Islamic Religious requirements.

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Re: Pakistani Economic Stress Watch

Postby yensoy » 26 Jan 2021 10:33

Vips wrote:Amid ailing economy, Imran Khan to mortgage Islamabad's biggest park to get loan.

To overcome Pakistan's ailing economy, Prime Minister Imran Khan is considering mortgaging Islamabad's biggest park to get a loan of around Rs 500 billion.

How does one mortgage a public park? Usually national assets are mortgaged based on future receivables. How much money does a park make (unless it has leases on land for other non-park use)? Even if 10k people visit every day paying 200PKR each, that is only 730M PKR per year which is good to borrow about ten times as much or about 7.3B PKR. Maybe 100k people visit every day but I find that ridiculous - we are talking about every day of the year, not a sunny winter Sunday. I see there are amusement areas and tennis courts but the math still doesn't compute.

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Re: Pakistani Economic Stress Watch

Postby disha » 26 Jan 2021 10:43

yensoy wrote:How does one mortgage a public park? Usually national assets are mortgaged based on future receivables....


All paki zamindars and kammandus can set up private parties there. Aam abdul is not welcome. That is what is done.

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Re: Pakistani Economic Stress Watch

Postby Bart S » 26 Jan 2021 18:19

bharathp wrote:
Aditya_V wrote:Can anyone tell what is the use of the mortgage, can a foreign country build say a palace and why would they want to spend such money in Pakistan rather than their native land. Doesn't make sense. After all Pakis security forces will control all access.


this "mortgage" is similar to India or any govt issuing "bonds". however, when a bond is issued, you are essentially loaning money to the govt and the govt pays interest. however, interest is "haraam" in islam and hence the govt cannot provide bonds.
to get around this a "sukuk bond" is issued.
a "sukuk bond" can only be backed by a real asset (like property, a company etc). when you buy a sukuk bond, you are not "loaning" the money but "buying" a part of that property. until the period of the bond (until maturity), you get portions of the returns from that property. and at the maturity, you get the bond value "at par" - meaning - if the land value of that asset increases, the givt buys back that sukuk bond at the value. hence the sukuk bond circumvents the provision of "interest" and still pays the bond holders a return.

hence Pakistan has to mortgage its lands. Malaysia was the first country to initiate sukuk bonds.


That is a lot of Paki mental gymnastics to maintain the veneer of being sharia-compliant. Seems pretty pointless though when they go to institutions like IMF and WB and pay traditional interest, besides their own central bank and local retail banks have regular interest rates for lending as well. Rather like the CAIR-spokesperson type females found in woke circles in the west, wearing a sharia-compliant hijab with geisha-style makeup on their face.

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Re: Pakistani Economic Stress Watch

Postby Rsatchi » 26 Jan 2021 18:37

Vips wrote:
khatvaanga wrote:
500 billion for a 759 acre land. isn't it a bit steep? About 4000 crs per acre if my calculation is right. even Bombay has lower cost than that!!


1 billion = 100 crore Paki Rs. So total = 50,000 Crore. Per acre figure comes to around 66 Crores Paki currency which still is high for real estate price in shitland.

VIPsji
Only thing that comes to mind is :
turn into a BIG GRAVEYARD as there is already Mazar-I-Milat so all 'Hoi-Poly' could rest there as well!! and Charge high annual retention fee!!
The way the economy is going and add COVID to it you will need a 'Resting Place' :lol: :lol: :lol:

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Re: Pakistani Economic Stress Watch

Postby nam » 26 Jan 2021 18:47

Who will pay money for it? What is the exact deal, if Pak doesn't pay back money, the guy who paid gets to keep the park? What does the park actually do?

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Re: Pakistani Economic Stress Watch

Postby bharathp » 26 Jan 2021 19:27

nam wrote:Who will pay money for it? What is the exact deal, if Pak doesn't pay back money, the guy who paid gets to keep the park? What does the park actually do?

the govt pays back the money (prints money, as all govts do with bonds)
I dont know what the park does - I only know what a sukuk bond does
the exact deal is like this:
govt sells portion of land as guarantee for a sukuk bond, its "owned" by the share holders but they do not own the rights to sell it. (they can sell the bond, not the land)
the bond issuer then pays back the bond holder the "par value" of the bond at maturity - which is the land value at the time of maturity.

given that this is all in PKR, its not difficult for TSP to simply print the money.

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Re: Pakistani Economic Stress Watch

Postby manjgu » 26 Jan 2021 20:06

that will lead to lot of inflation ! ?

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Re: Pakistani Economic Stress Watch

Postby gpurewal » 27 Jan 2021 00:06

manjgu wrote:that will lead to lot of inflation ! ?


Deja-vu; it will be like the Deutsche Mark during the Weimar Republic's

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Re: Pakistani Economic Stress Watch

Postby kit » 27 Jan 2021 00:27

nam wrote:Who will pay money for it? What is the exact deal, if Pak doesn't pay back money, the guy who paid gets to keep the park? What does the park actually do?


Pakis being what they are they will just print more money, the park will be operated by some company owned by the Faujis, i dont think any foreign investor would want to invest in a paki park !!! So keep money rolling from one hand to other , keep printing !!.. value be damned !.. the "value" quoted is a good idea of what they are trying to do with the "deal"..expect an announcement of an investor this week :mrgreen:

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Re: Pakistani Economic Stress Watch

Postby nam » 27 Jan 2021 01:38

Pak gov could just issue a regular government bond. Unless nobody is planning to buy it unless it is not dollar denominated.

Must be the usual scam to use the park for rupee denominated bond. Even then it just doesn't make sense. Who wants to invest in to a park in Pakistan? instead of say a port or airport...

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Re: Pakistani Economic Stress Watch

Postby Rohit_K » 31 Jan 2021 23:58

Railways losing Rs30m daily due to crashed reservation system
https://www.pakistantoday.com.pk/2021/0 ... on-system/

LAHORE: Pakistan Railways (PR) is facing a daily loss of over Rs30 million as its IT department has failed to fully restore the nationwide crashed reservation system even after four days, it was learnt on Saturday.

No online ticket bookings have been entertained since Tuesday last, while the counter bookings also remain suspended. The passengers are suffering due to the incompetence of the PR department. The e-ticketing system and rail communication could not be revived fully, while the internet connectivity of the Railway headquarters also remains suspended. It was reported on Tuesday that the passengers face problems as the ticket reservation system of the PR crashed across the country. The passengers willing to travel through the PR are facing hardships in getting their reservations. Earlier on January 23, Railways Minister Azam Khan Swati had assured citizens that the government is taking effective steps to make Pakistan Railways into a profitable entity.

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Re: Pakistani Economic Stress Watch

Postby Rsatchi » 01 Feb 2021 12:37

bharathp wrote:
nam wrote:Who will pay money for it? What is the exact deal, if Pak doesn't pay back money, the guy who paid gets to keep the park? What does the park actually do?

the govt pays back the money (prints money, as all govts do with bonds)
I dont know what the park does - I only know what a sukuk bond does
the exact deal is like this:
govt sells portion of land as guarantee for a sukuk bond, its "owned" by the share holders but they do not own the rights to sell it. (they can sell the bond, not the land)
the bond issuer then pays back the bond holder the "par value" of the bond at maturity - which is the land value at the time of maturity.

given that this is all in PKR, its not difficult for TSP to simply print the money.

https://youtu.be/bwSX6i72X4w
Looks like Paxatan has already used 'Sukukk' way atleast 30 times in the past as per this video
Listening to the guy explaining I get a feeling this more a 'Islamic' Scam :eek: :eek:
The property is neither pledged nor mortgaged!
Just enough to fool the gullible???

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Re: Pakistani Economic Stress Watch

Postby Aditya_V » 01 Feb 2021 13:57

Rohit_K wrote:Railways losing Rs30m daily due to crashed reservation system
https://www.pakistantoday.com.pk/2021/0 ... on-system/

LAHORE: Pakistan Railways (PR) is facing a daily loss of over Rs30 million as its IT department has failed to fully restore the nationwide crashed reservation system even after four days, it was learnt on Saturday.

No online ticket bookings have been entertained since Tuesday last, while the counter bookings also remain suspended. The passengers are suffering due to the incompetence of the PR department. The e-ticketing system and rail communication could not be revived fully, while the internet connectivity of the Railway headquarters also remains suspended. It was reported on Tuesday that the passengers face problems as the ticket reservation system of the PR crashed across the country. The passengers willing to travel through the PR are facing hardships in getting their reservations. Earlier on January 23, Railways Minister Azam Khan Swati had assured citizens that the government is taking effective steps to make Pakistan Railways into a profitable entity.


Why doesn't Pakistan just scrap its Railway system, sell the wagons engines and rail can be sold as steel scrap to pay foreign debts, Those who need to travel can use Road or Air and so can cargo.

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Re: Pakistani Economic Stress Watch

Postby AkshaySG » 01 Feb 2021 14:20

Aditya_V wrote:
Rohit_K wrote:Railways losing Rs30m daily due to crashed reservation system
https://www.pakistantoday.com.pk/2021/0 ... on-system/



Why doesn't Pakistan just scrap its Railway system, sell the wagons engines and rail can be sold as steel scrap to pay foreign debts, Those who need to travel can use Road or Air and so can cargo.


Roads in pak suck , Beyond the old M1 ,the new China built CPEC highway and Islamabad area the connectivity is poor and suffers from massive delays and congestion . The public transport and goods movement is so screwed up that there is a whole industry of unlawful trucks and buses charging multiple times the cost to transport anything . Its similar to the situation in UP,MP 30 years ago .

https://www.dawn.com/news/1589093

Air ? what air ? ... The ruined PIA and its unqualified pilots ? .... There is still a lot to be done to even get back to pre 2020 crash levels of operation let alone be strong enough to take on the burden of train passengers . I don't think any country ever had a worse year in aviation than Pak had in 2020 (maybe Malaysia in 2014 ) .Airfare is still reasonably expensive and beyond the means of many people .

Trains were built by British so they at least work somewhat well , can carry large numbers and are cheap-ish albeit slow and inefficient due to bad maintainenece .

The biggest hope for improvement rn is Chinese investment but that has its own caveats .

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Re: Pakistani Economic Stress Watch

Postby nachiket » 01 Feb 2021 14:23

^^I thought they had invested a lot in their motorways between the few major cities while completely neglecting PR (typical paki elite behavior) and as a result they had great inter-city highways they liked to show off while the whole of PR was a disaster zone.

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Re: Pakistani Economic Stress Watch

Postby Bart S » 01 Feb 2021 14:47

Aditya_V wrote:
Why doesn't Pakistan just scrap its Railway system, sell the wagons engines and rail can be sold as steel scrap to pay foreign debts, Those who need to travel can use Road or Air and so can cargo.


Well, the Pakistani Rail Minister, no less, was recently on record saying that Pakistan Railways might be eventually shut down.
https://mmnews.tv/govt-cannot-run-pakis ... zam-swati/

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Re: Pakistani Economic Stress Watch

Postby Bart S » 01 Feb 2021 14:50

nachiket wrote:^^I thought they had invested a lot in their motorways between the few major cities while completely neglecting PR (typical paki elite behavior) and as a result they had great inter-city highways they liked to show off while the whole of PR was a disaster zone.


I think that they have a couple of high-end American funded motorways that they like to show off, and they have some shiny new CPEC roads in Gilgit Baltistan. These, like the RAPE and their lifestyles, get showcased externally and by ISPR-handpicked western 'travel influencers' but are a rare exception. This is unlike India where you can find a lot of maybe not so great looking but very useful and functional roads that were built over the last 30 years.

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Re: Pakistani Economic Stress Watch

Postby AkshaySG » 01 Feb 2021 14:57

nachiket wrote:^^I thought they had invested a lot in their motorways between the few major cities while completely neglecting PR (typical paki elite behavior) and as a result they had great inter-city highways they liked to show off while the whole of PR was a disaster zone.



There are some good highways.. Mostly up north towards Islamabad, Peshawar and Pindi ( The M1, M2, M3 etc) but not nearly enough to satisfy both personal and cargo movements to a desired level..


Since the Chinese money and construction workers/managers etc started flowing the the situation has improved quite a bit with port connectivity becoming much better though the intra city network still leaves a lot to be desired.

https://en.wikipedia.org/wiki/Motorways ... prov=sfla1

https://en.wikipedia.org/wiki/Expresswa ... prov=sfla1

Their desire to be Right Hand drive but refuse to import from India means that the cars in Pak were usually imported Japanese or British and meant that car prices were exceptionally high until the Chinese started pumping their cars into Pak

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Re: Pakistani Economic Stress Watch

Postby Bart S » 01 Feb 2021 15:10

AkshaySG wrote:
nachiket wrote:^^I thought they had invested a lot in their motorways between the few major cities while completely neglecting PR (typical paki elite behavior) and as a result they had great inter-city highways they liked to show off while the whole of PR was a disaster zone.



There are some good highways.. Mostly up north towards Islamabad, Peshawar and Pindi ( The M1, M2, M3 etc) but not nearly enough to satisfy both personal and cargo movements to a desired level..


Since the Chinese money and construction workers/managers etc started flowing the the situation has improved quite a bit with port connectivity becoming much better though the intra city network still leaves a lot to be desired.

https://en.wikipedia.org/wiki/Motorways ... prov=sfla1

https://en.wikipedia.org/wiki/Expresswa ... prov=sfla1

Their desire to be Right Hand drive but refuse to import from India means that the cars in Pak were usually imported Japanese or British and meant that car prices were exceptionally high until the Chinese started pumping their cars into Pak


They have little industry to speak of, so what their highways (mostly around the Lahore, Pindi, Slumbad areas) are used for is for their RAPEs and military folks to drive around in comfort. Not much use to the country as a whole.

Also, Chinese cars barely sell in Pakistan, and cars are heavily overpriced (roughly 2x of India) and are generally old models without proper safety features. Chinese are more present in bikes (basically any car is out of reach for all but the elite minority). They do have a thriving market for used car imports (mostly Japanese) though.

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Re: Pakistani Economic Stress Watch

Postby Suraj » 02 Feb 2021 00:35

A few datapoints about their railways:
* Annual passenger traffic is 60 million, down from 82 million in 2005. Their population is up perhaps 20% during that time. IR does 8.1 billion (8100 million) passengers a year.
* One line electrified, but service was terminated in 2011 due to theft of overhead wires.
* 5MT of freight traffic in 2017. For comparison, IR did 1250MT in the current fiscal.
* PR has 190 working diesel electric locomotives, which is about 40% of CLW's annual output. IR operates close to 13000 locomotives, about 55% electric and rising.

Many pages ago, I stated this, and will state again - this is a pre-industrial economy we are looking at. Their steel output is just over one week's output in India. Their railway network and infrastructure is nonexistent for a country of that size, with many parameters off by 100x or more. Without capex into infrastructure, you cannot have long term growth. That cannot be accomplished by proxy through CPEC - they'll be stuck with depreciating assets they cannot maintain, and cannot pay down external borrowings on.

By 2030, most macro economic metrics between the countries that currently sit at 10:1 will expand to 15:1 or 20:1 , with some things far more.

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Re: Pakistani Economic Stress Watch

Postby VKumar » 02 Feb 2021 00:51

Leave them alone to reach the end they deserve

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Re: Pakistani Economic Stress Watch

Postby m_saini » 02 Feb 2021 02:53

^ Hopefully we're prepared for the inevitable influx of refugees when they go belly up. Our bollywood "stars" alongwith orgs like amnesty would be browbeating the GoI to let the pukis in on account of hooman rights.


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