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ECC directs to resolve issue of outstanding payments of Port Qasim Authority

ECC directs to resolve issue of outstanding payments of Port Qasim Authority

ISLAMABAD: Economic Coordination Committee (ECC) of the Cabinet has given a go-ahead for release of 650,000 tonnes of wheat from PASSCO stocks to the provincial governments of Khyber Pakhtunkhwa (KP), Sindh and Balochistan to ease out the demand and supply equilibrium in the local market.

Taking up other agenda items, the ECC also considered two separate proposals submitted by the Ministry of Maritime Affairs for payment of different outstanding amounts by WAPDA and Pakistan State Oil to the Port Qasim Authority and constituted a committee under Federal Minister for Economic Affairs Muhammad Hammad Azhar to resolve the issue of outstanding payments to Port Qasim Authority.

The ECC was told that the WAPDA had only paid a sum of Rs 334 million as against Rs 1.41 billion while the remaining Rs 1.076 was still pending. The other payment was related to the Petroleum Division who owed an amount of Rs 1.696 billion to the Port Qasim Authority for wharfage charges against the LNG imported by the Pakistan State Oil. The Ministry of Maritime Affairs requested the ECC to direct WAPDA and the Petroleum Division to make their respective payments to the PQA. The ECC discussed the issue and in the light of input on the issue, formed a committee headed by Minister for Economic Affairs to examine the matter and suggest a solution within two weeks for resolution of the issue.

The ECC also approved a proposal for grant of Technical Supplementary Grant amounting to Rs 706.050 million, including Rs 650.426 million current and Rs55.624 million development expenditure, to the Ministry of Human Rights in pursuance of a federal cabinet decision to transfer the functions, subjects and organisations, including administrative and financial matters, of the Special Education & Social Welfare along with their allied institutions from Federal Education and Professional Training Division to the Human Right Division. Subsequently, the Federal Education and Professional Training Division surrendered the funds amounting to Rs 706.050 million related to the Special Education & Social Welfare.

The decision was taken at a meeting of the ECC held on Wednesday at the Cabinet Block with Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh in the chair. The ECC took up the wheat situation in the country, particularly the rising trend in wheat prices, and approved a proposal by the Ministry of National Food Security and Research for release of 300,000 tonnes each to governments of Khyber Pakhtunkhwa and Sindh and 50,000 tonnes to the government of Balochistan. The ECC also approved an amount of Rs2.745 billion to be paid as PASSCO incidental charges at the ratio of 50:50 to be equally shared by the federal and respective provincial governments.

The latest release follows an earlier release of 250,000 tonnes of wheat to the governments of Sindh and Khyber Pakhtunkhwa governments (100,000 tonnes for Sindh and 150,000 tonnes to KP) from PASSCO stocks on an ECC decision taken in its meeting on 2nd October 2019. The PASSCO incidental charges for the previous release had also been shared at the ratio of 50:50 equally by the federal and respective provincial governments.

In its meeting held today, the ECC was informed by the Ministry of National Food Security and Research that the PASSCO and Provincial Food Departments had reported their stocks at the level of 6.444 million tonnes as compared to 10.093 million tonnes of the corresponding period of the last year.

However, despite the fact that the total availability of wheat was estimated at the level of 28.256 million tonnes, including the leftover stock of 3.777 million tons as compared to the national requirement of 26.91 million tons of the country, the prices of wheat and flour still showed upward trend in the local market, the ECC was told.

Earlier, the ECC was told that WAPDA owed an amount of Rs1.076 billion to Karachi Port Trust after 52 consignments imported by WAPDA were cleared by the KPT Board on WAPDA’s request on deferred payment and following approval of the federal government.

The ECC also approved a proposal by the Ministry of Interior for grant of a Technical Supplementary Grant amounting to Rs 100 million, inclusive of Rs 43 million for employee related expenses and Rs 57 million for operating expenditures, for revamping of different departments of the Islamabad Administration following approval of summary by the Prime Minister on 10th June 2019 to establish departments like Forest, Food Authority, Reclamation & Probation and a proper Cooperative Society  in Islamabad with their administrative expenditure and expenses to be funded through improved collection of revenues by ICTA. The ECC was told that the ICT Administration has already implemented the part of the approved summary by the PM dealing with the collection of taxes on increased rates and is way ahead of its revenue collection targets while 125 new posts have also been agreed for creation between the Finance, Establishment and the Interior Division for revamping the departments as per the approved summary.

The ECC also took up an issue regarding the supply of gas to Habibullah Coastal Power Company (HCPC) and approved a proposal by the Petroleum Division for supply of indigenous gas for the interim period of 3 to 6 months, purely on ‘as and when available basis’ with no Liquidated Damages attached, to HCPC, during which period the supply of RLNG could be evaluated together with commercial terms, if CPPA agreed to switch the plant on RLNG and extend the Power Purchase Agreement (PPA) accordingly.

Earlier, the Ministry of Energy told the ECC that the issue of supply of gas and RLNG had been deliberated at length with stakeholders and accordingly, Petroleum division was of the view that no long term firm commitment of supply of indigenous gas to HCPC could be offered in view of the depletion of indigenous gas and the widening gap between demand and supply. However, considering the plant location of Quetta and voltage issues, the abrupt suspension of gas supply upon expiry of GSA might not allow CPPA to make alternate arrangement to stabilize the grid which is neither in the interest of Balochistan nor the country.

The ECC also approved another proposal submitted by the Ministry of Energy for allocation of up to 8 MMCFD gas from Chabbaro and up to 10 MMSCFD gas from Gundanwari to the M/s SSGCL with the price of gas as per the applicable Petroleum Policy. Earlier, the ECC was briefed that the OGDCL had requested to allocate the gas from the both the gas fields, located in the Khairpur district, under commercial production to the government appointed buyer Sui Southern Gas Company Limited (SSGCL).

On another proposal by the Ministry of Energy, the ECC also approved a proposal based on uniform seasonal pricing structure of “Use more electricity-pay less” to be applicable during the four winter months from November 2019 to February 2020, at the rate of Rs 11.9 per unit on all units consumed over and above the units consumed in the corresponding months last year by the consumers using Domestic Consumers (5kW and above), ToU meters, commercial consumers 95kW and above), ToU meters, and all except temporary industrial consumers. The ECC was told that the proposal was aimed at utilising the massive surplus electricity during the winter months when the demand plunges to 8000-9000 MW from an installed capacity of 35,000 MW. The Ministry of Energy said the proposal was based on similar models adopted in various countries, including Chile, and it was expected to lead to utilisation of additional electricity to the tune of Rs 24 billion in four months.

On yet another proposal by the Ministry of Energy, the ECC extended the timeline by another one and a half year for the commencement of Competitive Market Operations / commercial operation date of the Competitive Trading Bilateral Contracts Market (CTBCM) to allow completion of CTBCM Plan within 18 months after approval of CTBCM Plan by NEPRA.

The ECC was told that the CTBCM model and plan prepared by the Central Power Purchasing Agency Limited following an ECC decision for transition of the power market to a Competitive Trading Bilateral Contract Market, had been submitted to NEPRA for review and regulatory approval and the approval was anticipated by December 2019. In view of the above, the ECC also approved the proposal for NEPRA to be allowed to amend the timelines of market transition towards a Competitive Market Operations/CTBCM operations mentioned in Schedule-I of the National Electric Power Regulatory Authority (Market Operator Registration, Standards and Procedure) Rules, 2015.