[Congressional Record Volume 140, Number 144 (Thursday, October 6, 1994)]
[Extensions of Remarks]
[Page E]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]

[Congressional Record: October 6, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

                       MENDING FENCES IN PAKISTAN


                          HON. BOB LIVINGSTON

                              of louisiana

                    in the house of representatives

                       Thursday, October 6, 1994

  Mr. LIVINGSTON. Mr. Speaker, unfortunately, the longstanding 
conflicts between India and Pakistan have placed strains on our 
relationship with both countries. I am especially concerned that U.S. 
policy in the region has been unfair in its treatment of Pakistan.
  Under the Pressler amendment, the U.S. conditions aid to Pakistan 
upon a certification by our government that Pakistan is not developing 
a nuclear weapons program. Given that other countries in the region 
have such a program, but do not have their aid conditioned, the 
Pakistani people feel that the United States has a double standard. I 
agree and I believe that we need to reconsider our unbalanced policy 
toward Pakistan. Next year we should revisit this important issue.
  Despite the controversy in our official policies, I an pleased that 
the private sector has recognized the great opportunities for trade and 
investment in Pakistan. I commend the following three articles which 
outline the signing of 16 contracts worth about $4 billion, with 
American power-generation and oil-exploration companies. I submit these 
articles for my colleagues.
  The articles follow:

          [From the Christian Science Monitor, Sept. 28, 1994]

          Big U.S. Contracts Won in Pakistan Help Mend Fences

                          (By Farhan Bokhari)

       Islamabad, Pakistan.--American investment prospects in 
     Pakistan appear to have been livened up after the recent 
     return to Washington of Hazel O'Leary, the United States 
     Energy secretary, following a five-day presidential mission 
     to the Asian nation. Business executives accompanying Ms. 
     O'Leary used the opportunity to sign 16 contracts worth 
     roughly $4 billion, mainly in power-generation and oil-
     exploration sectors.
       That investment commitment is one of the largest in the 
     history of Pakistan. In the past 47 years. American 
     businesses have invested only about $450 million in equity in 
     Pakistan. O'Leary's visit also marks a turning point in the 
     two countries's bilateral relations which were at their 
     lowest point until recently.
       Less than two years ago Washington considered declaring 
     Pakistan a terrorist state. The US cut military and economic 
     aid to the country for almost four years under a U.S. 
     congressional provision, dubbed the Pressler Amendment. It 
     restricts assistance unless Islamabad accepts international 
     safeguards on its nuclear facilities.
       However, the two sides appear to be trying to expand 
     contacts through areas such as private business investment. 
     These are not barred under the Pressler law. ``[O`Leary's] 
     visit here signifies the broadening of the U.S.-Pakistan 
     relationship; this is a multidimensional relationship.'' 
     declared Benazir Bhutto, the Pakistani prime minister, as she 
     presided over a ceremony celebrating the signing of the 
       Other officials from the U.S. and Pakistan acknowledge that 
     the two countries are trying to contain the difficulties over 
     the nuclear issue so that the issue does not harm a broad 
     range of potential contacts, especially business 
       This month, the Clinton administration announced a $10 
     million grant for nongovernment groups working to improve 
     Pakistan's social sector. And Pakistani officials are 
     examining prospects for purchase of up to $20 million in US 
     soybean oil.
       These amounts may seem small compared with the more than $7 
     billion committed by the U.S. in military and economic aid to 
     Pakistan during the height of the 1980's cold war when 
     Islamabad played a key role in supporting the Western 
     alliance against the Soviet occupation of Afghanistan. But 
     they have added to the enthusiasm of Pakistani officials, who 
     say the two countries are now out of the crisis mold.
       ``We have brought in the U.S. delegation of businesspeople, 
     the best experts that we have to offer,'' O'Leary said at the 
     end of her visit. She repeated commended Pakistan's energy 
     policy during her stay. That policy, which has not opened the 
     doors for American businesses, has been welcomed by a wide 
     range of businesspeople since its announcement this year.
       Under the policy, a complicated procedure to seek official 
     permission for setting up an electricity-generating plant has 
     been replaced by a ``one window'' government office in 
     Islamabad. There prospective investors can get the official 
     paperwork processes at a fast pace.
       Also, the government's decision to assure investors a bulk 
     tariff rate of 6.5 cents per kilowatt hour for electricity 
     generated in such new plants marks one of the most attractive 
     incentives the Pakistan government has ever offered.
       Pakistan officials hope progress over the energy projects 
     will help attract U.S. investments in other sectors, too. 
     Many officials here are heartened about the $10 million grant 
     and the possible soybean-oil sale.
       These initiatives represent an important shift at a time 
     when despite little movement over the nuclear issue. Pakistan 
     wants to mend fences with the U.S.

                       Entergy Cuts Foreign Deals

                            (By James Welsh)

       Entergy Corp., already involved in Argentina and China, 
     ventured deeper into emerging markets Thursday with a $50 
     million investment in a Pakistan power project.
       The investment is being made with a consortium developing a 
     new $1.6 billion project near Karachi, Pakistan.
       The group, Hubco, will operate and own a 1,292-megawatt, 
     oil-fired power plant. Officials at Entergy said the project 
     will boost Pakistan's generating capacity by 13 percent.
       Entergy's overseas excursions are making it a leader among 
     American utility companies in emerging markets. The company 
     recently invested about $115 million in two projects in 
     China, and bought into a separate project in Argentina last 
       Pakistan's demand for electricity is not as great as that 
     of China. But as with other foreign markets, the new venture 
     promises substantial profits because it falls outside 
     regulated electricity sales mandated in the United States.
       ``Obviously, no market compares in potential to what China 
     represents,'' Entergy spokesman Patrick Sweeney said. ``At 
     the same time, this is a really solid project that has been 
     under way for about a year and a half. The participants are 
     well established in that part of the world, and we're 
     comfortable with it from that standpoint.''
       The station in Pakistan will have four generating units. 
     The first should be in operation by the summer of 1996, and 
     completion of the whole project is expected by the next 
       Entergy will hold a seat on Hubco's board of directors. The 
     project's other major investors include National Power PLC of 
     Great Britain, Xenel Industries of Saudi Arabia, and Pakistan 
     Power Limited of Singapore.
       Entergy's domestic holdings include Arkansas Power & Light 
     Co., Gulf States Utilities Co., Louisiana Power & Light Co., 
     Mississippi Power & Light Co. and New Orleans Public Service 
       Entergy closed up \1/4\ at $23\1/8\ in New York Stock 
     Exchange trading Thursday.

            [From Far Eastern Economic Review, Oct. 6, 1994]

    Now Deliver--Pakistan Prepares for Next Round of Energy Projects

                      (By Ahmed Rashid in Lahore)

       The hard part, it seems, is over, Pakistan has won 
     credibility among international investors and, with it, 19 
     agreements worth US $5 billion to build power plants that 
     will help meet the country's growing energy shortfall. Eight 
     of those were signed on September 24, the last day of a visit 
     by American executives traveling with the United States 
     energy secretary, Hazel O'Leary.
       Now all Islamabad has to figure out is how to get fuel to 
     the plants, most of which will be oil-fired and how to 
     deliver the electricity that they eventually will produce. To 
     that end the government in October will unveil plans designed 
     to attract at least US $5 billion more to support energy-
     related infrastructure projects according to Shahid Hassan 
     Khan, special adviser on economic affairs to Prime Minister 
     Benazir Bhutto.
       ``We now want to concentrate on infrastructure such as 
     railways which have been totally neglected the logistics of 
     moving fuel for the plants, and oil and gas transmission to 
     the cities.'' Khan says few details about the incentives the 
     government might offer potential investors are available.
       Among projects that will be critical to the operation of 
     power plants are new oil pipelines, a US $25 billion railway 
     to transport oil from Karachi's port to inland plants, and 
     the laying of seven 500-kilowatt transmission lines, costing 
     about US $25 billion. The Karachi port may also require 
       Khan has been the driving force in moving the country's 
     lethargic bureaucracy to coordinate better and put together 
     packages attractive enough to draw foreign backing. The rate 
     of return of 22-23% offered to investors in power plants is 
     perhaps the most favorable in the region. The generous energy 
     package has brought support for 19 power projects that 
     together would generate 5,000 megawatts of power--nearly 
     double the current supply.
       Pakistan's ambitious energy policy received a ringing 
     endorsement from American investors who recently signed 16 
     power-related deals--worth nearly US$4 billion--with 
     Pakistani industrialists. Few expected that Bhutto's 
     government would receive such a financial pick-me-up when 
     O'Leary arrived on September 20 with 80 American energy 
     executives in tow.
       By the end of the five-day trip, the U.S. contingent had 
     signed agreements to invest in eight power plants and develop 
     three petroleum concessions, among other deals. ``Increasing 
     oil and gas exploration is crucial and our oil policy is 
     already attracting new international players who have not 
     been here before,'' says Khan.
       After the deals were signed on September 24, Bhutto hailed 
     them as ``a landmark'' in the country's history of foreign 
     investment. ``Today, Pakistan is a country which offers 
     macroeconomic stability, which comes about if a government 
     has the popular support to take harsh measures that put the 
     economy on track,'' Bhutto declared.
       Four hundred top Pakistani businessmen and bureaucrats 
     nearly fell off their seats when United States Energy 
     Secretary Hazel O'Leary began her address to them in Lahore. 
     Dressed in a designer power suit, with a skirt cut above the 
     knee, the glamorous O'Leary approached the podium and then 
     claimed down from the stage. She strolled the aisles, making 
     eye contact with her audience as she spoke.
       The style was more Oprah Winfrey than Inside Washington. 
     And it stunned the conservative local audience. The energetic 
     and unconventional O'Leary, an expert on private-sector power 
     generation and law, is acknowledged as one of the few stars 
     of the beleaguered Clinton cabinet. ``In all her 
     presentations, she was brilliant and articulate,'' says a 
     Pakistani energy executive.
       However, O'Leary requested a proviso, asking the government 
     for ``a clear strategy for implementation of the projects.''
       O'Leary carried a letter from President Bill Clinton to 
     Bhutto that gave unstinting praise to her policies. ``She has 
     made market-driven energy development the chief priority in 
     expanding Pakistan's economy * * * Pakistan has made great 
     strides in reforming its institutions to encourage 
     international investment,'' wrote Clinton. The endorsement, 
     despite continuing disputes with Islamabad over its nuclear 
     programme, buoyed the government just as the opposition 
     launched a nationwide strike to try to topple Bhutto.
       O'Leary also expressed support for nuclear-power 
     generation--a thorny issue in the past between the two 
     countries. ``We have no intention to walk away from a power 
     source like nuclear energy,'' she said. ``Any capping of this 
     technology would cap the development of the world.''
       Pakistani officials said that cementing economic links with 
     Washington without conceding anything on its nuclear-bomb 
     programme was a major success. Maleeha Lodhi, Pakistan's 
     ambassador to Washington, said: ``We are reshaping the U.S.-
     Pakistan relationship and taking it beyond the confines of 
     the Cold War into a new era of cooperation between the 
     private sectors of both countries.''
       O'Leary, 58, was a hit from the moment she touched down 
     with 80 American businessmen in a glitzy plane chartered from 
     Hollywood's MGM studios. Islamabad pulled out all the stops 
     to entertain its visitors in style. One dinner was held at a 
     15th-century Mughal fort in Lahore, lit by oil lamps while 
     dancing camels provided entertainment. O'Leary wore the 
     traditional shalwar kameez, a long dress over trousers, much 
     to the delight of her hosts.
       Later, visiting a village without electricity, O'Leary 
     sipped tea while chatting with giggling village women. She 
     dismissed her crew-cut bodyguards, saying: ``We girls want to 
     be alone.''
       O'Leary also hit it off with Prime Minister Benazir Bhutto, 
     who put aside protocol to host ceremonies in Islamabad during 
     which US$4 billion in energy deals were signed between U.S. 
     and Pakistani companies. The excitement was palpable. ``These 
     are the largest single foreign-investment deals ever made in 
     Pakistan's history,'' said a senior bureaucrat. ``We have 
     wasted so much time. This is how business is done.''