Chinese group plans to invest in $2.1bn Pakistan coal-fired power project
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KARACHI: State-run Power Construction Corp of China Ltd plans to invest in a $2.1 billion coal-fired power project in Pakistan as part of a broad economic cooperation between Beijing and Islamabad, the company said on Thursday.
It will get a 51 per cent stake in the project near Karachi, while Qatar's Al Mirqab Capital will own the remaining 49 percent, Power Construction said in a filing with the Shanghai bourse.
The Chinese company will be responsible for construction and operation of the project, which is scheduled to be completed within 32 months and will mainly use coal from Indonesia.
The project, including the installation of two 660-megawatt high-efficiency power units known as super critical generators, will be part of a broad bilateral deal dubbed as China-Pak Economic Corridor, Power Construction added.
Under the deal, the Chinese government and banks will finance Chinese companies to build $45.6 billion worth of energy and infrastructure projects in Pakistan over the next six years.
The deal further cements ties between Pakistan and China at a time when Pakistan is nervous about waning US support as troops pull out of Afghanistan.
The coal-fired power project will require a total investment of $2.085 billion, nearly $1.6 billion of which will be funded with loans, according to the filing.
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Comments (86) Closed
Apr 09, 2015 10:07am
Excellent stuff! At least some development is happening during the tenure of this government. The last ten years was pure stagnation.
PPP did nothing and Musharraf having complete control on government did nothing about the power issue.
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Apr 09, 2015 10:14am
Such news should be published only when the Investments are final. Planning is just a carrot at the end of a stick. Simple!
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Apr 09, 2015 10:19am
Look at the Picture on the top of this article and Say "NO" to the Coal Power Generation..
We need Green Environment not the Black.
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Apr 09, 2015 10:25am
China owns 51% Qatar owns 49% Pakistan provides the geography.
Hooray for Development!
Don't we have any sense of shame left?
Why do we define ourselves by who our "friends" are?
Does this nation that fought so hard to gain the right to exist have no self respect left?
When the kids shout "Pakistan se Zinda bhaag" I used to chastise them. I'm not so sure anymore.
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Apr 09, 2015 10:25am
They are going burn Indonesian Coal near Karachi where millions of People are living. Karachi is already among the top 10 cities of the world with the highest level of lead poisoning.
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Apr 09, 2015 10:30am
Is this Eco friendly.
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Apr 09, 2015 10:32am
ChinA is not like western countries.when it invests 48 bilion then it knows how to extract 96 illion from that country.china muntil now has go e to every country for its profit only by e ploiti g natural resources of other countries.pak should be aware of them for thier own good
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Apr 09, 2015 10:41am
Pakistan is making progress under the direction the new prime minister and his political party; progress not seen under the direction of the PPP or general Pervez Musharraf (retired).
So why all the Nawaz Sharif bashing here? Jealous? Backed the wrong horse? What?
He knows people with money and you don't? The money goes to the Chinese and the Qataris instead of the incompetent cronies of the PPP. The Chinese and Qataris get the money - the people of Pakistan get the electricity. If factories and offices have no electricity how do people find jobs?
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Apr 09, 2015 10:42am
46 billion..???
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Apr 09, 2015 10:44am
Seeing is believing.
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Apr 09, 2015 10:51am
@nation lover its over the period of next 6 years.....
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Apr 09, 2015 10:57am
First they polluted their country environment and now we are taking their 5 decade old methods, why we are not investing in hydro power , Kick backs from Chinese companies will let our incompetent PM to Pass what ever they ask or present.
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Apr 09, 2015 11:09am
We need to invest in hydropower and push china to aid in building dams. Coal power plants are not clean and importing coal from Indonesia means that the generated power will be expensive.
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Apr 09, 2015 11:14am
Not even 1% owned by Pakistan?? Whats going on?
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Apr 09, 2015 11:24am
Why coal from Indonesia?
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Apr 09, 2015 11:25am
What is the completion date of project. Next government will not change the game.
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Apr 09, 2015 11:28am
Can we hear official version of our Govt / Ministry of Water & Power? Such high-sounding news appear in the media off and on and then die down. Should the nation always be led to believe such good news for which there is no way to confirm whether it is true or a stunt just to mislead the masses?
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Apr 09, 2015 11:34am
Why not invest the same amount in renewables? Why coal!
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Apr 09, 2015 11:35am
$45.6 billion worth of energy and infrastructure projects??? R u serious...
U can build new Pakistan with that much capital. Stop providing funds to govt - I dont trust them.
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Apr 09, 2015 11:49am
Terrible. Mercury is a neurotoxin, affecting generations. http://www.epa.gov/hg/about.htm
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Apr 09, 2015 11:50am
why coal from indonesia ?
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Apr 09, 2015 12:04pm
Creation of at least 500 White color Chinese Jobs. Glad that our Govt. is creating employment opportunities for Chinese nationals along with locals. All hail China and GoP.
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Apr 09, 2015 12:06pm
What about PAK CHINA RAILWAY LINE, for the prosperity of country.
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Apr 09, 2015 12:08pm
y coal y not some cleaner energy
plus import coal from indoenasia will be exp req hard currency
not a good idea
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Apr 09, 2015 12:17pm
... and will mainly use coal from Indonesia ?
WHAT ?
Dont we have a massive amount of coal in Sindh ?
/Furqan
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Apr 09, 2015 12:23pm
Another series of debts.
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Apr 09, 2015 12:44pm
Expect nothing less from China , our all weather friend, now we will see US making similar gestures , so that they do not loose leverage over pakistan.
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Apr 09, 2015 12:48pm
I hope the plant is of latest generation which creates minimal pollution.
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Apr 09, 2015 01:16pm
We need several projects like this on the coast in Sindh and in Baluchistan in order to meet Pakistan's growing electric power needs. Indonesian coal can be shipped directly to the coastal locations so it will be easy to maintain continuous supply of imported coal. By the way what ever happened to our Thar coal deposits which the government was so excited about?
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Apr 09, 2015 01:17pm
lucky China
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Apr 09, 2015 01:25pm
The above photograph says it all.
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Apr 09, 2015 01:27pm
While the world is moving to clean and green renewable sources of energy, it's pathetic to go for a technology which is old and great source of concern when it comes to environmental issues.
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Apr 09, 2015 01:37pm
engineers, technicians labours and materials should be utilised of countrymade at maximum level.
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Apr 09, 2015 01:49pm
Well the rest of the world & China itself shutting down Coal Powered projects due to Carbon emission & major environment polluter, we on the other hand planning to install as many Coal Powered Projects...Bravo to our think tanks
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Apr 09, 2015 02:17pm
It is good news, but why China and Pakistan are utilizing Indonesia coal instead of Thar coal?
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Apr 09, 2015 02:24pm
Chinese usually just make announcements, nothing acually gets done. Can some one name one real project initiated and completed by China.
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Apr 09, 2015 02:42pm
progressing pak
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Apr 09, 2015 02:47pm
Bad for the Environment. Please reconsider .
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Apr 09, 2015 02:54pm
Government should start Gawadar port also. It will double the annual income of Pakistan
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Apr 09, 2015 03:00pm
Can someone put some sanity to this coal chaos? Dams are much better options channel these funds to that instead making these pollution mega houses.
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Apr 09, 2015 03:09pm
Power generation using coal imported from Indonesia? What happened to the Thar coal of which there had been so much hue and cry?
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Apr 09, 2015 03:50pm
Lots of contracts related to energy are being signed , but the thing that really counts as to what happens on the ground in a stipulated and accountable manner and period.
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Apr 09, 2015 04:02pm
Coal from Indonesia why not from Thar?
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Apr 09, 2015 04:11pm
@Zak Eco-friendly? No this is Chinese. You know the difference.
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Apr 09, 2015 04:11pm
Scale of Pollution in Karachi will reach same as the level of Beijing where people cannot walk in city without mask during busy workig hours.
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Apr 09, 2015 04:41pm
@CYRUS I think you are mistaken, Our economy was at its best during the time of Musharraf.
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Apr 09, 2015 04:46pm
@Dasti And do you think that's Karachi's biggest problem ?
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Apr 09, 2015 04:48pm
And Karachi to get 100% of polluted air.
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Apr 09, 2015 04:52pm
@timurid
are you going to pay for it? Pakistan cannot afford it.
Pakistan will earn tax revenues from it and inherit new energy infrastructure from it. You seem to want to put nothing in and want something out of it for free. There is no such thing as a free lunch.
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Apr 09, 2015 04:54pm
@Ahmed Shaikh
because renewables are twice as expensive to generate electricity. Coal is cheap, and leads to cheap electricity.
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Apr 09, 2015 04:55pm
@Furqan Ali
it will eventually use Thar Coal, when Thar coal is produced on scale.
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Apr 09, 2015 05:03pm
Government should employ indigenous coal instead of Indonesian. It will also create employment opportunities for the people of Pakistan especially Thar.
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Apr 09, 2015 05:58pm
@Zak Yes Very eco friendly.
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Apr 09, 2015 06:21pm
Let me take a guess. Pakistani government is guaranteeing the supply of coal at some ceiling price. When the Pakistani Rupee devalues against Indonesian Rupiah, our government will be deeper in debt, supply of coal may get disrupted, the plant may stop generating electricity, more litigation, and increase in circular debt.
Am I too cynical? We should invest in those energy projects that rely on indigenous input as it acts as a natural hedge against currency fluctuation and fluctuation of the price of a commodity in the world market on which we have no control
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Apr 09, 2015 07:00pm
It's looks like chinese are making profit out of the pollution of Pakistan.There is no free lunch in modern world.
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Apr 09, 2015 07:26pm
This is wrong on so many levels please clarify me if i am wrong. Here China has 51% stake and Qatar has 49% and pakistan has 0% so it will be like 100%FDI(foreign direct investment) it means that China will fix the prices of electricity produced(as it is a major stake holder) It may look profitable for Pakistan initially(jobs &infra and power) but in a long run it will hurt pakistan most as it is one of the core sector and Pakistan will not be in control of fixing prices of electricity and has to buy from Chinese company and when China will be ready to buy coal from pakistan it will buy at its own price so it wont be a boost for economy in long run i think govt should have invested a minimum of 51% in core sectors like this so that Pakistan could have a major say and later they can allocate their own coal blocks for power generation and economic growth.
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Apr 09, 2015 07:31pm
@Zahid - PPP also signed over $80 billion dollar of MOUs with China. On every Quarterly official visit to China Zardari used to sign $10 billion of MOUs. Remember?
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Apr 09, 2015 08:11pm
With so many concerns and valid questions, I think such matters should be discussed in the parliament first before any approvals.
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Apr 09, 2015 08:20pm
Coal from Indonesia, money from Qatar and China and electricity to Pakistan. Interesting economics. Atleast, three countries will prosper if not four. The opportunity is not too high for Pakistan, I hope.
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Apr 09, 2015 08:32pm
I don't get one thing, why don't the government invite small overseas pakistani investors to invest in these projects and make them partners in the project or float shares so average people like me could invest. instead of them investing money in real estate which is a booming business, they could invest in energy projects as well.
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Apr 09, 2015 08:43pm
@Zahid
ignorance is bliss. there were 19,000 megawatts added during musharraf tenure. kacchi canal, raising of mangla dam, gomal zam dam, bhasha dam, neelum jhelum hydroelectric, ghazi bharotha.. do you want me to keep going? there were 67000 villages electrified between 1947-1999 (thats about 50 years). between 1999-2008, there were 54000 villages electrified approximately. you do the math.
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Apr 09, 2015 08:45pm
@CYRUS
comparing the development under president musharraf to all 4 nawaz sharif governments would still come out in favor of musharraf. theres no competition.
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Apr 09, 2015 09:04pm
@hamza khan
just few comments:
Bhasha Dam, not a single shovel of mud moved, even this unfortunate project been inaugurated twice.
Neelam jehlam was conceived long before Mush, and still ongoing and will be for another while.
Gomal Zam is merely 17 MW installed capacity, and Ghazi Brotha was almost complete when Mush grabbed the power.
So much so of your favourite leader.
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Apr 09, 2015 09:44pm
Power is desperately needed for the economy. At least some one is doing something about the electric shortage.
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Apr 09, 2015 10:11pm
why coal from indonesia when we have reserve in Thar
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Apr 09, 2015 10:13pm
why coal from indonesia when we have reserve in Thar
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Apr 09, 2015 10:13pm
why coal from indonesia when we have reserve in Thar
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Apr 09, 2015 10:30pm
There should be a 'clause' in the agreement stating 'fueled by material originating from Pakistan' only!!
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Apr 09, 2015 10:44pm
I have dealt with Chinese people on many occasions and I can only tell you this: I do not trust them.
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Apr 09, 2015 11:18pm
Al Mirqab Capital is backed by former prime minister of Qatar, who is also the sponsor for Redco Group, Saif-ur-Rehman's business in Qatar.....
Is there any connection here?
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Apr 09, 2015 11:44pm
Why not nuclear energy???
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Apr 09, 2015 11:45pm
@Zak No.. This will spread a lot of smog in the air.
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Apr 09, 2015 11:52pm
@shiv Yes Pakistan Govt will make tremendous amount of money by billing Pakistani public at triple the rate . And there is another sector "Kunda users" will grossly benefit from this project. Losers KarachiWalas with lung and respiratory issues .But who cares for clean environment.
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Apr 10, 2015 12:14am
@Dasti It is not true that Karachi is one of the top ten most polluted cities. We Pakistanis have a problem with exaggeration.
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Apr 10, 2015 12:15am
@Shoaib Lahore
Gwadar Port.
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Apr 10, 2015 12:17am
@shiv
If the Chinese don't sell coal at a fair price, then the market will shift to building other plants, or pressuring the government to invest in other sources of energy. Also, these projects don't typically get built until there is already a negotiated price per megawatt in place.
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Apr 10, 2015 12:38am
For all the people who think these are just useless MoUs as before, this time is different because: 1) Chinese delegations are now being accompanied by engineers, investors, and other planners. Not just party officials. 2) Chinese works already number over 20,000 in Gilgit Baltistan according to several news sites. You can actually now see Chinese workers around Gilgit. 3) Pakistan now has a stable government and is an eager partner that isn't so corrupt like PPP 4) Violence has been largely controlled. Who would invest in Pakistan of 2008-2012? Now it is safer to invest 5) Now China needs to develop Pakistan into a strong market to help China's own slowing economy,. Before China was booming and had no real need to develop Pakistan or Xinjiang 6) US India cooperation against China (they aren't united against Pakistan as they are against China) 7) China is being far more assertive in the world i.e. the new World Bank rival. Hope this helps. 8) China is serious about a new Silk Road.
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Apr 10, 2015 12:39am
@sunill Pakistan has the benefit of knowing that China actually is interested in developing infrastructure (motorways, railways, seaports, Lahore metro rail), which will build our economy and allow us to build our own infrastructure in the future. In fact, their investments would make Pakistan the country with the best infrastructure in South Asia - and with a motorway and rail from Karachi to Kashgar, our infrastructure would even surpass India's because we could bring goods from anywhere to Karachi quickly by motorway, whereas central and north India's road infrastructure would be abysmal by comparison - India cannot afford to build a motorway network criss crossing the whole country for a few more decades. Pakistan is a narrow country, so a motorway along the Indus and into Punjab to KPK would be close to the vast majority of our population centers. So if China makes a lot of money off me being able to drive from Karachi to Islamabad on a nice motorway, then so be it.
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Apr 10, 2015 12:45am
Pollution to Pakistan, Profit to Chain All in all great deal!!!
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Apr 10, 2015 01:24am
@janzee ---Because they don,t want Poor Sindhis to prosper and improve their economic conditions.Period!! Does it need Rocket scientist to figure out this simple fact.Thanks
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Apr 10, 2015 04:45am
Its better if Pakistan speaks to countries like Srilanka regarding Chinese loan and interest rate N payback.
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Apr 10, 2015 06:20am
There is great hydro power potential and if you build dams they will serve multiple purposes i.e. cheap power, water for crops and arrest the floods in monsoon.
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Apr 10, 2015 06:29am
Oh my beautiful country. My lovely Pakistan. They will destroy you . Pollution is yours and profits will be theirs.
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Apr 10, 2015 06:49am
This is disastrous for the environment. Why can't china invest in clean energy, solar, wind or even nuclear energy is better than coal.
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Apr 10, 2015 06:50am
Guys pleasesy be aware that made in china items are always poor in quality.
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Apr 10, 2015 02:28pm
@Rizwan shifting sources wont be easy as you think because here Pakistan is being more China-centric i.e China has a major share in every core sector Rail,road,gas,infra & energy.I am not saying these projects are bad i am saying that Pakistan govt should invest a minimum of 51% in these type of core sectors and also look for investors from other countries for competition.Without competition taxes and tolls will be high and without govts share small companies and govt owned companies may give up before this economy gaint.
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