[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.''