This is a great analysis of the biggest bankruptcy in Pakistan history, dragging down many banks including the State Bank of Pakistan, among others. It turns out the CEO was a crony of the previous PM, Musharraf.
The group, which originated in 1912 as a small company dealing in used garments, grew with few major setbacks until Dewan Muhammad Yousuf Farooqui started playing a more active role in business in the late 1990s.
“Yousuf got close to Musharraf. He started expanding like nobody’s business. He went into too many businesses and got overstretched,” the banker said, requesting anonymity.
At the same time, the global financial meltdown hit the cash flows of the conglomerate badly. Most of its businesses depended heavily on imported raw materials, like auto kits, coal and polyester. Banks revoked credit lines, and the group’s companies were left without working capital to run even everyday operations.
This story also gives us a peek into the reasons why Pakistan companies performed so poorly during the Financial crisis. The Fragility of the local economy is slowly being addressed, with China’s help through CPEC. namely:
- shortage of cheap fuel like Coal,
- poor roads, rail, and ports
- blackouts from shortage of electrical capacity,
- shortage hard currency (USD).
Thar Coal mine and new power plant scheduled to open late this year.
SECMC CEO Shamsuddin Shaikh informed a delegation of members of Sindh Assembly, civil society representatives, senior journalists and corporate executives who visited Thar Coal Block-II on Saturday that the power to be generated from Thar coal would be the cheapest in Pakistan.
Mr Shaikh said while briefing the delegation on the progress achieved so far in the mining and the power plant construction that they were just 20 meters away from the first steam coal to supply coal to 660MW mine-mouth power plant.
Thar coal mine could ensure energy security for all of Pakistan:
As the pioneering project in Thar, Block II has a vital role to play in further development of Thar and resolution energy crisis in Pakistan. Not only that, expansion plans are already in motion to increase the scope of mining activities to other blocks of Thar coalfields making them comparable to other large-scale mines in the world. The experts are of the view that little less than one per cent of the Thar Coal reserves, 1.57 billion tons can generate upto6,000 MWs of electricity for next 50 years, and one can well measure that how much energy Pakistan would have on utilization of the entire coal reserve of 175 billion tons
Pakistan‘s coal power generation is expected to increase up to 20,000MW under the Vision-2030 Strategic Plan. The Governments of Pakistan and Sindh are actively inviting the local and foreign investors to come forward to invest in the Pakistan’s coal power projects. The government has also devised a plan to generate 10,000 MW of electricity from Thar Coal by the year 2020. While, a 232 kms of Thar-Matiari 500kv transmission line is close to completion mark.