47. Pakistan Economic Survey 2011-12 - Consultancy Services in ...

Executive SummaryKarachi to Lahore. Commercial management ofrail operations and outsourcing of non-corefunctions is being initiated with an aim to improveefficiency of rail operations. Private Sector is alsorunning a passenger train.During the financial year, 16 kms of track wasrehabilitated on the Pakistan Railways networkbesides doubling the previous 15 kms of track.Construction of a D Class railway station at newMultan City, renovation of Khudian Khas,Usmanwala, Raiwind and Kanganpur railwaystations was carried out. Signaling system of fourrailway stations damaged during the riots of 2007was rehabilitated during the period. DuringFebruary 2012, 52 new design passenger coacheswere imported from China. Remaining 150passenger coaches will be manufactured atPakistan Railway Carriage Factory Islamabad byJune 30, 2013. In addition, 22 passenger coacheshave been rehabilitated at the Pakistan RailwayCarriage Factory Islamabad during the last year. Anew dry port was set up at Prem Nagar nearRaiwind industrial area, Lahore through publicprivatepartnership.Teledensity in the country has increased by 68.3percent in April 2012, showing 6.7 percent growthas compared to the previous year. Mobilepenetration rose to 64.9 percent in 2011-12 against60.4 percent in 2010-11. Fixed Local Loopteledensity now stands at 1.93 percent. Totalmobile subscribers has reached 118.3 million bythe end of March 2012. Subscribers of Local Loop(FLL + WLL) are 5.9 million, out of which 3.10million belong to FLL and 2.8 million belong toWLL. Broadband subscribers reached 1.9 millionat the end of February 2012.There has been a cumulative investment ofapproximately US$ 2.5 billion in the electronicmedia industry in Pakistan. More than 200,000new jobs with diversified skills and qualificationshave been provided. Additionally, over 7 millionpeople have been accommodated through indirectemployment. With the current growth rate of morethan seven percent per annum in this sector, it isestimated that the cumulative investment in theelectronic media industry will reach above $ 3.0billion by the end of the current financial year.Energy: Energy is considered to be the lifeline ofeconomic development. Pakistan’s economy hasbeen growing at an average growth rate of almost 3percent for the last four years and demand ofenergy both at the production and consumer end isincreasing rapidly. The Energy Committee headedby the Finance Minister presented a wellarticulated Energy Recovery Plan to the Cabinet inNovember 2011 which was approved after duedeliberations.The Plan focused on: (i) improving governancestructure: it included dissolution of PEPCO andreplaced by Central Power Purchase Authority,constituting new Boards of Directors (BODs) of 8DISCOs and NTDC comprising professionals,issuance of explicit guidelines of professionalizingthe BOD, hiring professional CEOs for DISCOs,GENCOs and CPPA, and business plans for eachDISCO and GENCO to be developed by the newlyhired CEO and approved by the new Board; (ii)Supportive legislative framework: NEPRA lawwas amended authorizing NEPRA to notify fueladjustment, Cabinet has approved amendmentmaking electricity theft a serious crime; (iii)Financial Sustainability of the System: theGovernment has increased electricity tariff by 90percent and Rs. 1.25 per kwh very recently torecover the full cost of electricity supply which isstill Rs. 3 per kwh below the determined tariff; (iv)Resolution of Circular Debt: the Government hasprovided Rs. 1122 billion from the budget duringthe last four years to resolve circular debt issue.However, extremely low collection than required(90 percent of the billed amount) by DISCOsalways leaves a high balance as receivables; (v)Supply Side Management: reduction intransmission and distribution losses as well asrunning the most efficient plants; (vi) DemandSide Management: Standard Operating Procedure(SOP) issued for recovery of private receivables, alimit of 45 days for payment overdue has been setfor disconnection, Loss mapping in each DISCOinitiated to identify losses and their sources,Government facilitating recovery of dues ofProvincial and Federal Government departments,and Media campaign for prudent use of electricity;(vii) Promoting Private Sector Participation (viii)changing fuel mix and (ix) changing energy mixmoving towards hydel and coal based generation.In addition, the Government has launched a majorvii