Saudi Fund for Development approves grant for King Salman Hospital in Pakistan — PM

ISLAMABAD: Pakistan has granted licenses to 57 manufacturers of electric vehicles (EVs), state media reported on Tuesday, as the government moves to transition to green transport solutions and beat climate change. 

The government of Pakistan approved an ambitious National Electric Vehicles Policy (NEVP) in 2019 with the goal of electric vehicles comprising 30 percent of all passenger vehicle and heavy-duty truck sales by 2030, and an even more ambitious target of 90 percent by 2040. For two- and three-wheelers, as well as buses, the policy set a goal of achieving 50 percent of new sales by 2030 and 90 percent by 2040.

“The government is focusing on expanding local EV production, with licenses issued to fifty five manufacturers for two and three-wheelers, and two for the assembly of four-wheelers,” Radio Pakistan said in a report. “A plan is under consideration for establishing charging stations, including fast chargers and battery swapping stations.”

The report said under a new EV policy, free registration and exemption from annual token fees and toll taxes would also be offered to consumers. 

“There is a plan to create at least one electric vehicle zone in each province, including Islamabad,” Radio Pakistan added. 

A Senate Standing Committee last week criticized a lag in the production of EVs in Pakistan, saying only 60,000 had been produced by this year against a target of 600,000.

Last month, Pakistan said it would cut the power tariff for operators of EV charging stations by 45 percent as part of the ongoing reform of the energy sector designed to boost demand. The government is also planning to introduce financing schemes for e-bikes and the conversion of two- and three-wheeled petrol vehicles.

The cabinet on Jan. 15 approved a reduced tariff of 39.70 rupees ($0.14) per unit, down from 71.10 rupees previously, which will be in place within a month. The government expects an internal rate of return of more than 20 percent for investors in the sector.

According to a report submitted to the government by power ministry adviser Ammar Habib Khan and reported by Reuters on Jan. 15, there are currently more than 30 million two- and three-wheeled vehicles in Pakistan, which consume more than $5 billion worth of petroleum annually.

The energy ministry plans to convert 1 million two-wheelers to electric bikes in a first phase, at an estimated net cost of 40,000 rupees per bike, according to the report, saving around $165 million in fuel import costs annually.

BYD Pakistan, a partnership between China’s BYD and Pakistani car group Mega Motors, told Reuters in September up to 50 percent of all vehicles bought in Pakistan by 2030 would be electrified in some form in line with global targets.

ISLAMABAD: The International Monetary Fund (IMF) has given the go-ahead to waive 18% general sales tax (GST) imposed by the Pakistan government on the induction of new planes if Pakistan International Airlines is privatized, the chairman of the privatization commission told a parliamentary committee this week.
Cash-strapped Pakistan is looking to offload a 51-100% stake in debt-ridden PIA to raise funds and reform state-owned enterprises as envisaged under a $7 billion International Monetary Fund program. A final bidding process for the airline’s privatization in October attracted just one bid of $36 million for a 60% stake in the national flag carrier. The government had pre-qualified six groups in June, but only real-estate development company Blue World City participated in the bidding process, placing a bid that is below the government-set minimum price of 85 billion Pakistani rupees.
Among concerns raised by potential bidders for the PIA stake include policy continuity, honoring contracts, inconsistent government communication, unattractive terms and taxes on the sector, and the flag carrier’s legacy issues and reputation.
Officials say PIA’s cumulative losses alone are close to $3 billion, with the total asset valuation of the airline standing at approximately $572 million.
“In the previous round, bidders recommended waiving the 18% GST imposed by the government on the induction of new planes and fleet expansion,” the privatization commission chairman told the National Assembly Standing Committee on Privatization on Monday, according to a press release.
“They believed that removing this tax would facilitate new aircraft acquisitions and support the growth of the aviation industry.”
The government presented these concerns to the IMF, which agreed that if PIA was privatized, the 18% GST could be removed to encourage private sector investment in new aircraft, the press release said.
PIA’s liabilities currently stand at Rs45 billion ($162 million), and the government says it is developing a strategy to address these financial burdens and ensure they do not deter potential buyers.
“A mechanism would be devised to address outstanding liabilities, ensuring that financial burdens do not become a hindrance for potential investors,” the statement added.
The development comes weeks after PIA resumed operations in Europe, after a 2020 ban by the European Union Aviation Safety Agency (EASA) over concerns about the ability of Pakistani authorities and its Civil Aviation Authority (PCAA) to ensure compliance with international aviation standards. EASA and UK authorities both suspended permission for PIA to operate in the region after Pakistan began investigating the validity of pilots’ licenses following a deadly plane crash that killed 97 people.
Pakistan hopes new European routes and flying approval to the UK will boost PIA’s selling potential.