ISLAMABAD: The Econo-mic Coordination Committee (ECC) of the Cabinet has allowed mills to export 0.250 million tons of sugar and approved $29.9 million for Pakistan International Airlines (PIA) to acquire aircraft on dry lease.
Sources said that ECC meeting presided over by Finance Minister Ishaq Dar also decided that a decision to allow mills to export another 0.25 million tons of sugar would be taken by the end of April after assessing the situation. They said that 0.255 million tons export of sugar allowed to the mills is in addition to 0.5 million tons export which was allowed to sugar mills previously; out of which some 0.160 million tons is still to be exported by the mills.
Sources further stated that the ECC had decided in principle to allow 10kg import of gold per transaction but a final decision in this regard would be taken after April 16 when Finance Minister would return from the International Monetary Fund/the World Bank spring meeting in Washington. Dar has reportedly directed Commerce Ministry to submit a summary to the next ECC meeting with a recommendation that the import of gold must not exceed 10 kg per transaction, which may be once a month. Sources said that the decision to this effect was taken because majority of the importers were of between 1 and 6 kgs.
The meeting also approved $29.9 million for Pakistan International Airlines (PIA) to acquire aircraft on dry lease as well as a proposal of Water and Power Ministry for utilization of the existing available generation capacity of Rental Power Plants, which have now been renamed as short-term IPPs, subject to the fact that it is not in violation of the Supreme Court’s Judgment dated 30.3.2012. The ECC also approved the import of 0.125 million tons urea through Trading Corporation of Pakistan (TCP) for kharif crops and extended a ban on import of gold till the third week of April.
The meeting decided that export quota would be allocated on first-come-first-serve basis and export may be made against irrecoverable letter of credit or a contract with a 25% non-refundable advance payment.
The shipment may be made within 45 days of the registration of contract with the State Bank of Pakistan (SBP) and the non-refundable advance payment to be forfeited in favor of Government of Pakistan in case of non-performance. The ECC directed Ministry of Industries and Production to ensure coordination with the provinces that outstanding payment to cane growers is made by the sugar mills. The ECC was informed that the import of urea would have no impact on foreign exchange reserves as the same would be imported through ITFC. The Finance Minister on the occasion said that the earlier decision of the ECC to maintain the retail price of Rs.1786 per bag must be ensured in the local market. He said that the Ministries of Food Security and Industries & Production should work in coordination with the provinces for the agreed price.
The ECC also constituted a four-member Committee comprising Ministers for Water and Power, Petroleum and Natural Resources, Food Security and Industries and Production to sort out the issue of supply of required gas to the local urea manufacturers.
The meeting approved a Water and Power Ministry’s summary on utilizing generation capacity of RPPs with a changed name of short-term IPPs subject to the fact that it is not in violation of the Supreme Court’s Judgment dated 30.3.2012. The meeting was informed that utilization of available capacity would add 200 MW power to the system. The Ministry argued that to avoid obsolescence of plants and machinery and to avoid monetary claims under arbitration, these plants and machinery can be utilized to generate power.
The ECC directed that the project company to acquire generation license and tariff determination from National Electric Power Regulatory Authority (NEPRA) and tariff would be based on take-and-pay basis and electricity actually delivered to the national grid and on terms and conditions of the regulator. The short-term IPPs may have an option to sell electricity to the bulk consumers like housing societies, industrial parks, etc. without the government guarantees and obligation of the public entities to buy all of the generated electricity. The terms of Power Purchase Agreement (PPA) would be for a period of three years and a draft in this regard would be prepared by the National Transmission and Dispatch Company (NTDCL) for short-term IPPs for approval of the ECC.
The utilization of the plants would also be subject to no objection from National Accountability Bureau (NAB) for utilization of plant and machinery.
The ECC considered and approved the summary of the Aviation Division for the release of US$29.9 million to PIAC for acquisition of aircraft on dry lease. The ECC was informed that PIA intends to lease eight A320s offered by Qatar Aviation Lease Company through international tender. These aircraft will be available from next month.
The ECC also considered a summary of the Ministry of Commerce regarding lifting of ban on the import of gold. The ECC directed the Commerce Ministry to resubmit the summary, incorporating guidelines provided by ECC, in the third week of April for consideration.
by Zaheer Abbasi