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ECC okays Rs 14.6 billion ”assistance” for Steel Mills




  • The Econo-mic Co-ordination Committee (ECC) of the Cabinet on Tuesday decided to provide financial assistance of Rs 14.6 billion to Pakistan Steel Mills. Sources said that the ECC meeting presided over by the Finance Minister Dr Abdul Hafeez Sheikh approved a fresh assistance of Rs 8.6 billion and decided to release another Rs 5 billion, which were previously approved along with Rs 1 billion for clearance of old liabilities of Sui Southern Gas Company (SSGC). 

    The ECC was informed through a summary that PSM had submitted a business plan based on 63 percent capacity utilisation for 2012-13 to the Cabinet Committee on Restructuring (CCOR) on June 28 this year. It was agreed to achieve an average capacity utilisation of 50 to 55 per cent for 2012-13 for which Rs 14.6 billion funding was discussed. 

    The meeting was informed that PSM has been facing loss since 2008 and currently working at a very low capacity of just 15 percent. Keeping in view PSM”s difficulties and CCOR”s decision, the ECC approved financial package of Rs 8.6 billion for PSM, including mark-up for fiscal year 2013 as well as disbursement schedule for PSM formulated by CCOR on quarterly basis. 

    A statement issued by the Finance Minister after the ECC meeting stated that while keeping in view the current gas shortage in the country, the ECC approved the summary titled “allocation of gas from new sources Makori field, Tal Block” moved by Ministry of Petroleum and Natural Resources by which 75 MMCFD gas will be included in the system. 

    In the same way the ECC approved gas allocation from OGDCL”s NIM West Field to M/S SSGCL by which 2 MMCFD gas will be included in the system. The ECC was also given a presentation of key economic indicators including CPI, WPI and SPI, Large Scale Manufacturing (LSM) trend has been improved to 1.3% in May 2012. Exports reached $24.66 billion and imports were $40.04 billion in 2011-12. 

    Current Account Deficit remained at $586 million in June 2012. Foreign Exchange Reserves remained at $14.77 billion on July 20, 2012, informed in the ECC. The ECC also discussed the summary regarding delay in disposal of surplus stocks of wheat held by Passco. The meeting was informed the case was not processed at appropriate time resulting in substantial loss to public exchequer. Secretary Cabinet informed ECC that major reasons are: devolution of the Ministry of Food and Agriculture, procedural delays because of lack of requisite data and record during interim arrangements and transfer of PASSCO along with subject from Ministry of Commerce to newly created Ministry of National Food Security and Research. 

    The ECC constituted a committee comprising Ministers for Law, Information and Broadcasting and Adviser to Prime Minister on Agriculture and Water Resources to work further on the matter and to formulate a mechanism to avoid any future loss to national exchequer. 

    The ECC also discussed summary of storage charges of wheat moved by the Ministry of Commerce. The Secretary Commerce argued that TCP billed the provincial governments of Punjab, Sindh, Khyber-Pakhtunkhwa, Balochistan, Gilgit-Baltistan, Azad Kashmir, USC, Pakistan Army and Pakistan Navy for recovery of storage charges amounting to Rs 3.886 billion. 

    The Secretary Commerce informed the ECC that TCP had been pursuing all agencies for storage payment which remained unpaid since 2009. The Secretary requested the ECC that the Finance Division may be asked to recover the storage charges at source from the provincial governments. After due deliberations, the ECC decided to hold a separate meeting with TCP officials and representatives from all provinces and armed forces to discuss the issue in detail and to submit their recommendations to Cabinet Division subsequently. 

    The ECC also discussed summary moved by FBR on waiver of sales tax at import stage to Swede Bus Pakistan (Pvt) Ltd which contained company”s request for exemption from sales tax at import stage to discharge its liabilities to the financial institution which are mainly government owned. Without the settlement of this dispute the company will neither be able to sell the buses nor discharge its liabilities and the buses will turn into scrap, informed in ECC. 

    After much deliberation, the ECC constituted a committee comprising Secretary Industries and Chairman FBR to further investigate the matter. The ECC was also informed that 721 decisions have been taken in total 78 ECC meetings since 2008 in which 655 decisions were implemented. So the percentage of implementation of decision is 91 percent, the statement concluded. 

    Copyright Business Recorder, 2012

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