The Economic Co-ordination Committee (ECC) of the cabinet on Thursday allowed gas companies to set up power plants by using their own low BTU gas as part of the government''s strategy to generate more power from where it is available.
Presided over by Prime Minister Shaukat Aziz, the ECC also approved 8.842 cents tariff for setting up 450 MW thermal power station at Chichoki Malian (Sheikhupura) besides allowing phase-wise import of cotton through land route and as a first step only import of long staple cotton.
After the meeting Dr Ashfaque Hasan Khan, Economic Advisor to the Finance Ministry briefed the journalists that the first priority would be given to gas companies to set up thermal power stations using available low BTU gas.
"If gas companies are unable to give go ahead signal within three months'' prescribed time, then other parties will be considered," he added. The ECC gave go ahead to phase-wise cotton import through land route for which Ministry of Food, Agriculture and Livestock (Minfal) has been asked to set quarantine facility at Wagha border.
In the first phase only long staple cotton could be imported after which the government would conduct study that import of short staple cotton is not harmful for the local farmers and then establish quarantine facility at Chaman and Turkham.
He said after a record cotton production of 14.4 million bales of cotton in 2004-05 it decreased to 12.8 million bales in 2005-06 and further reduced to 12.5 million bales this year. On the other hand spinning capacity over the last few years has developed up to 16 million bales.
ECC also decided to extend R&D support to dyed/printed fabrics, white home textiles and dyed/printed home textiles from eight countries of Central America. These countries are Nicaragua, Costa Rica, Belieze, Guatemala Al-Salvador and Honduras. The proposal had been submitted by the Commerce Ministry.
He said, ECC also approved Wapda''s proposal for setting up a combined cycle thermal power plant of 450 MW at Chichoki Malian as the proposal PPIB''s for setting up three power plants of 200 MW each has been shelved because of higher tariff ranging from 11.1 to 11.1 cents.
In response to Wapda''s international bid, Alstom, a US-based company and Merubeni of Japan offered lowest bid of 8.842 cents per unit but at a later stage Qatar government showed interest to become part of this consortium.
He further said, ECC also decided to continue ban on export of pulses after reports that some of the parties procured gram at higher rates as part of their strategy to export it, as prices its price in the international market is higher than Pakistan.
"Gram crop is very good but export of pulses will not be allowed," he continued. He further said that the ECC also directed the Security and Exchanges Commission of Pakistan (SECP) to resolve all issues relating to equity and Real Estate Investment Trust (REIT) before budget with the consultation of SBP or any financial institution.
He said that the purpose of REIT is to provide cheap housing facilities to low income groups. Dr Ashfaque Hasan further said that the ECC has allowed foreign insurance companies to arrange equity of $4 million from where they want and erased the condition of equity from local market.
He said the ECC has allowed the Central Board of Revenue (CBR) to approve the names of investors who intends to import accessories for the services industry like hotels and chain stores. Dr Ashfaque said that inflation during the first 10 months (July-April) stood at 7.9 percent.
Earlier, ECC had directed CBR to bring the names of those investors before the ECC who are being allowed to import accessories at 5 per cent duty for one time exemption.
He said, a proposal of Defence Ministry has been deferred regarding exemption from sales tax on electrical power generated by the Pakistan Ordinance Factories (POFs). In this regard CBR has been asked to examine the proposal and submit report to the ECC in the next meeting.
The Ministry of Ports and Shipping withdrew a summary regarding establishment of Single Point Moording (SPM) facility at Khalifa point Hub (Balochistan). Dr Ashfaque said that 2.595 million tons wheat has been procured so far against the target of 5 million tons, which is 52 per cent of the total target set for the current year.
The Punjab procured 1.325 million tons of wheat against the target of 3 million tons followed by Sindh, 0.51 million tons against 0.7 million tons and Passco 0.76 million tons against 1.3 million tonnes targets.
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