Summary re-submitted to ECC: A revolving account for Chinese IPPs on the cards

ISLAMABAD: The government has reportedly decided to re-submit a summary to the ECC for opening of revolving account for the Chinese IPPs, well informed sources told Business Recorder.

The stock of Chinese IPPs’ receivables is over Rs 300 billion but neither the government is paying them nor opening revolving account in violation of its previous commitments.

However, a high level committee preparing agenda for the Prime Minister’s forthcoming visit to China has directed Power Division to re-submit summary to the Economic Coordination Committee (ECC) of the Cabinet, immediately.

The Committee has also decided that Finance Division will take up the matter with State Bank of Pakistan to facilitate and make smooth the debt and insurance premium payments of CPEC IPPs.

The sources said PPIB will depute an officer and arrange visit of CIHC Pak Power Company to Thar for exploring the possibility of shifting the Gwadar coal project to Thar.

PM forms body on Chinese IPPs, other matters

According to sources, Advisor to PM on Establishment, Ahad Khan Cheema has emphasized that the issues on Pakistan’s side should be resolved prior to the visit. Tariq Fatemi, SAPM, underscored the importance of the visit and advised the concerned ministries to prepare well for the visit. He proposed that an advance party of concerned officials should go to Beijing, ahead of PM’s visit, to tie up the deliverables.

SAPM on Government Effectiveness, Dr. Jehanzeb Khan observed that ministries should prioritize their recommendations for the visit. The agenda for the PM should be concrete, focused and ready to be delivered.

Zafar Mahmood, SAPM, stated that position papers may be developed on each item. These must be provided to Chinese Embassy in Islamabad and Pakistan’s Embassy in Beijing well in time, so that the Chinese side can process them and advice their leadership. He also suggested that at least one SEZ must be functional which does not require layers of regulatory approvals to proceed ahead with industrial cooperation.

Ministry of Planning, Development and Special Initiatives (PD&SI) has constituted a 21-member high-level Working Group to coordinate and oversee preparation for Prime Minister’s upcoming visit to China during which nearly three dozen projects/ MoUs would be discussed/ signed, the sources added.

The constitution of Working Group is as follows: (i) Advisor to Prime Minister on Establishment, Ahad Cheema (Convener); (ii) SAPM on Government Effectiveness, Dr. Jehanzeb Khan(Co-Convener); (iii) Tariq Fatemi-SAPM (Member); (iv) Zafaruddin Mahmood-SAPM (Member); (v) Secretary Foreign Affairs (Member); (vi) Secretary Finance (Member); (vii) Secretary Interior (Member); (viii) Secretary Commerce (Member); (ix) Secretary Communications (Member); (x) Secretary, PD&SI (Member); (xi) Secretary Power Division (Member); (xii) Secretary Petroleum Division(Member) ; (xiii) Secretary Railways (Member); (xiv) Secretary Industries and Production (Member); (xv) Secretary Economic Affairs (Member); (xvi) Secretary National Food Security and Research(Member); (xvii) Secretary Board of Investment (BoI) (Member); (xviii) Chairman Federal Board of Revenue (FBR)(Member); (xix), Chairman NDMA (Member); (xx) Deputy Governor, State Bank of Pakistan (Member); and (xxi) Director General (China), Ministry of Foreign Affairs (MoFA)(Member).

The Working Group is finalizing recommendations on the following 28 major infrastructure including CPEC projects/ agreement to be considered/ signed during the forthcoming visit of Prime Minister: (i) agreement on financing of ML-1 and commencement of tendering;(ii) payment to the CPEC IPPs and establishment of revolving account; (iii) Chinese investment to upgrade Pakistan’s power transmission and distribution system; (iv) financial closure of Azad Pattan, Kohala, Thar Block power projects; (v) Karachi Circular Railway (KCR); (vi) realignment of KKH Thakot-Railkot; (vii) construction of Babusar Tunnel; (viii) convening of 11th JCC meeting; (ix) attracting investment in solar power parks and solar panel manufacturing; (x) expediting development of CPEC SEZs to mobilize investment in targeted sectors; (xi) improved incentives for industrial relocation from China to Pakistan; (xii) expansion of bilateral trade through increased market access for Pakistani exports including cement, clinker, agri goods, etc; (xiii) establishing a green channel/ setting up FMD-free zone in Pakistan (including Gwadar); (xiv) establishment of border trade and transit facility between Xinjiang and Gilgit-Baltistan at Khunjerab border; (xv) business and investment conference; (xvi) corporate meeting of the Prime Minister with leading Chinese enterprises and financial institutions; (xvii) development of mining/ petrochemical industry in Gwadar; (xviii) additional Balance of Payment (BoP) support; (xix) draw China’s unutilized IMF SDRs; (xx) refinancing/ rollover of commercial loans (approximately $ 10 billion); (xxi) enhanced measures for security of Chinese personnel projects and instructions in Pakistan; (xxii) prosecute/ punish perpetrators of terrorist attacks targeting Chinese at Dasu, Gwadar Eastbay Expressway, Karachi University; (xxiii) package for post-flood rehab and reconstruction; (xxiv) desalination/ water treatment system for Karachi; (xxv) establishing TVET centres for skills development; (xxvi) preparations to celebrate 2023 as “decade of CEPC” (xxvii) Chinese support for climate change mitigation, capacity building, and improving infrastructure resilience; and (xxviii) signing of agreements/ MoUs.

Copyright Business Recorder, 2022