Dec. 9, 2009 -
PRLog -- Pakistan has experienced a high level of activity in its infrastructure sector in 2008. This has mostly been focused on the power sector and the road network. In addition, construction of housing has been a top priority. However, the global downturn is hitting Pakistan hard, and in BMI's 2009 Annual Infrastructure Report for Pakistan we are forecasting the construction industry to contract by 6.31% y-o-y in 2009. The power sector has been the major focus in Pakistan's infrastructure sector in 2008. Years of underinvestment in electricity generating and distributing infrastructure came to a head in 2008, when there was not enough supply to meet demand, further exacerbated by lack of rainfall almost knocking out Pakistan's large hydropower sector. It is currently estimated that there is a 3,300MW shortfall in capacity at peak hours; as a result, load shedding has been a common practise. In an attempt to combat the shortages, a US$30bn investment plan has been announced, which has seen the development of a number of projects. Construction started in 2008 on the 969MW Neelum-Jhelum power plant, which is being built by a consortium comprising Chinese Gezhouba Group Company and China Machinery Export Corporation. Construction of the Diamer Basha Dam, which will have a capacity of 4,500MW once completed, is expected to start in 2009. Within the transport sector, the roads have benefitted from the majority of attention in 2008. This has been the result of the National Highways Authority's plans to invest US$5.36bn into the sector. The plans benefitted from a US$900mn multi-tranche loan from the Asian Development Bank. The main project being pursued is the National Trade Corridor, envisaged as a main thoroughfare connecting the north of the country to the ports in the south; it is estimated to cost US$6.58bn. Construction of housing has been a major feature in 2008. Residential construction is being carried out under the prime minister's 'mega housing scheme' which involves the construction of one million low cost houses per year. Pakistan's economy has been hit hard by the global economic downturn and BMI's is forecasting real GDP growth of 2.5% y-o-y in 2009, down from 6.8% in 2007. In November, the country received a US$7.6bn 23-month standby loan from the International Monetary Fund to 'support the country's economic stabilisation programme'. The move might help boost investor confidence in the short term; however, it may put off investors looking at long-term infrastructure investments. Consequently presenting a down side risk to our forecasts.
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