[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 contracts. 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 opportunities. 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 year. 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 spring. 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 Inc. 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 refurbishing. 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.''