The Economic Coordination Committee (ECC) of the Cabinet chaired by Finance Minister Ishaq Dar approved a Rs 741 per bag subsidy on imported urea to sell it to farmers at locally manufactured price of Rs 1786 per bag. The ECC meeting on Thursday decided that the government would pick up the additional price to achieve uniformity in cost of imported and locally produced urea with the objective to counter exploitation of middlemen, besides providing relief to farmer.
The meeting was informed that the price of imported urea is Rs 2527 per bag. An official said the meeting was of the view that differential in prices of imported and local urea was one of the major factors behind exploitation of farmers. When asked about the total amount of subsidy, he expressed ignorance about it. The ECC was informed that the average cost of 150,000 tons presently being unloaded at the port and another 100,000 tons expected to arrive on January 19-20.
The ECC remained indecisive about the future of Pakistan Steel Mills (PSM) as no decision was taken on the five options presented to the meeting. According to a statement, the ECC directed Chairman Privatization Commission and the Ministry of Industries to prepare a reasonable proposal and present it to the ECC for consideration after a detailed briefing by the Secretary Industries on the current state of affairs of PSM. However, the ECC directed Finance Ministry to release 45 days salaries of workers of PSM.
The ECC decided that the concessionary period of 10 years be extended by the number of days for which SNGPL could not supply gas for operation of the plant in light of the recommendations of the Law Division and Ministry of Petroleum. The decision on concessionary gas sale price to Engro Fertilizer by Sui Northern Gas was deferred by the last ECC meeting due to absence of Law Division advice.
The ECC reviewed the present policy of exports to Afghanistan wherein the facility of exports to Afghanistan was allowed in Pak rupee and endorsed the decision of the Finance Minister taken on January 8, 2014 that after 17 March, 2014 payments against exports to Afghanistan would no longer be possible in PKR and the normal trading regime would apply. The Ministry of Commerce with the concurrence of Federal Board of Revenue (FBR) and President Khyber Pakhtunkhwa Chamber of Commerce recommended that this facility be discontinued since it is resulting in Pakistan being deprived of foreign exchange of around US $1 billion. The two-month period is being given to allow Pakistani exporters to fulfill any existing export contract.
The ECC considered the summary submitted by the Revenue Division on “withdrawal of concession of Custom Duty on import of BOPET Film-SRO 565(1)/2006” by a committee constituted under the Chairmanship of the Secretary, Ministry of Industries and Production with Secretary, Commerce and Chairman FBR as members to carry out a comprehensive study in the matter and bring a proposal based on consensus among all concerned before the ECC.
The ECC decided that the concessionary rate of customs duty provided to Flexible Packaging industry and Gypsum board industry to import BOPET film at 5% may be withdrawn. The withdrawal of concessionary rate of duty will mean that the customs duty on the import of BOPET film by these industries will be 20% and concessions available to metallic yarn industry and magnetic strip/scratch cards industry should continue as it is, because withdrawal of concession for these industries will adversely affect cascading of the tariff structure. However, the misuse of concession to metallic yarn and magnetic cards industries be avoided by observing strict allocation of quota based on a survey of the registered manufacturers and post-import performance verification through sales tax returns.
On a summary moved by the Ministry of Defence, The ECC approved providing of sovereign guarantee of US $26,805,444 in favor of M/s China Electronics and Technology Corporation (CWTC) Beijing, China to pay back loan in seven years, including a two-year grace period. The guarantee is being provided in terms of a decision made by the Government of Pakistan for the establishment of National Electronic Complex of Pakistan (NECOP) between National Engineering and Scientific Commission (NESCOM) of Pakistan and CETC. The Secretary Water and Power informed the ECC that CDWP has approved the proposal for Jamshoro Power Plant to be fueled by coal and construction of Power Project which will be presented before ECNEC in its next meeting for its approval.
The ECC decided to approve the Standardized Security Agreements (Project Agreements) for an Up-Front Tariff regime based wind energy projects under Policy for Development of Renewable Energy for Power generation 2006 following Nepra”s Upfront Tariff Determination. Alternate Energy Development Board (AEDB) was also authorized to approve any project specific amendments, in the Standardized Security Agreement (Project Agreements) for Up-Front Tariff regime based Wind Energy projects which do not increase government of Pakistan”s financial and contingent liability beyond those stipulated in the Project Agreements.
The Ministry of Water and Power placed a summary before the ECC for Gas pricing issues of the TNB Liberty Power Limited 235 (MW). The ECC decided that original decision of ECC be amended as under: “The Qadirpur Gas Price for sale to Liberty Power Plant Limited be fixed equal to 67.50% of the weighted average of a basket of crude oil import during the six months period which shall be notified on six monthly basis as per mechanism prevalent for fixation of well-head gas price of other fields”.
This will remove discrimination towards TNB liberty power plant. The decision has been taken after consultations with all stakeholders. The Ministry of Finance in a summary placed before the ECC stated that a meeting was held with the manufacturers of local fertilizer companies in which Minister for National Food, Security and Research, Minister for Petroleum and Natural Resources assisted the Finance Minister. After discussing various options and extensive deliberations the price of urea was reduced from Rs 1900/- per bag to Rs 1786/- per bag. The manufacturers agreed to the price.
The ECC expressed its condolences over the passing away of father of Anusha Rehman, Minister of State for Information Technology and offered Fateha for the departed soul The meeting was attended by Federal Minister for Industries and Production Ghulam Murtaza Jatoi, Minister for Information, Broadcasting and National Heritage Senator Pervez Rashid, Minister of Food and National Security Sikandar Bosan, Minister for Planning, Development and Reforms Ahsan Iqbal, Minister for Science and Technology Zahid Hamid, Chairman Privatisation Commission Zubair Umar, Chairman Board of Investment Miftah Ismail and senior officials of government.