The Economic Co-ordination Committee of the Cabinet (ECC) has decided to settle the circular debt of Rs 503 billion subject to signing of MoUs by Independent Power Producers (IPPs) with NTDC/CPPA for conversion to coal by projects with a capacity of more than 2000 MW, optimal utilisation of available capacity, one-month extension in the payment period to Pepco/CPPA and early settlement of disputes in accordance with the provisions of the Power Purchase Agreement (PPA).
The ECC meeting presided over by Finance Minister Ishaq Dar decided on a summary moved by the Ministry of Water & Power proposing settlement of the entire Rs 503 billion outstanding as circular debt. As provided in the budget, the ECC approved Rs 326 billion to be settled before June 30, 2013 and the remaining before August 10, 2013. According to a statement, the ECC, while approving the proposal, noted that the this settlement will provide much needed liquidity to the power sector; increase fuel availability, solve several disputes that have led to closure of about more than 1,000 MW of capacity and consequently augment the power generation.
The ECC further directed that this settlement will be subject to signing of MoUs by IPPs with NTDC/CPPA (i) for conversion to coal by projects with a capacity of more than 2000 MW, who have made this commitment; (ii) optimal utilisation of available capacity by IPPs; (iii) one-month extension in the payment period to Pepco/CPPA and (iv) early settlement of disputes in accordance with the provisions of the Power Purchase Agreement (PPA).
The ECC also considered and approved a summary of Water & Power Minister requesting for issuance of government guarantee for the additional cost of Rs 23 billion for Nandipur Power Project that has suffered in the past due to negligent delays in clearance of documents. In view of the significance of the project in meeting the critical shortages in the power sector, the ECC approved provision of letter of comfort that will allow the EPC contractor to remobilise and complete the project within the shortest possible time.
On a summary from the Ministry of Industries, the ECC approved a Ramazan Package of Rs 2 billion for availability of major kitchen items such as Atta, ghee/oil, daal chana, baisan, dates, rice, sugar, white gram, black tea, spices, squashes and syrups and milk (tetra-pack) at reduced prices from 10 per cent to 30 per cent at utility stores. The ECC also directed Ministry of Industries to widely publicise the Ramazan Package so that maximum number of people can take advantage of lower prices during Ramazan.
The ECC considered a summary of Ministry of Industries proposing procurement of sugar to build the stocks of Trading Corporation of Pakistan for effective market intervention and smooth supplies through the USC. The ECC noted with satisfaction better position of available sugar in Pakistan, which were estimated at 3.423 million tons compared to 3.256 million around the same time last year. However, in view of the fact that TCP stocks were only sufficient to meet the Ramazan demand, it decided to allow procurement of 100,000 tons sugar by TCP from local producers through a transparent competitive process in two instalments of 50,000 tons each.
The ECC also directed that sugar stocks positions will be closely watched and it will be ensured that local availability is always in line with the demand. The ECC also considered a summary from the Ministry of Petroleum and Natural Resources for the import of LNG. The summary suggested that the previous effort in this regard was conducted in haste and the Supreme Court had also taken notice of the lapses in the process and desired for a fresh decision from the ECC.
The ECC approved the proposal for cancellation of the two tenders previously bid for this purpose. The ECC decided that the new process will be considered and approved in the next meeting. The ECC meeting was attended by the Ministers for Water & Power, Petroleum and Natural Resources, Planning and Development, Food Security, Science and Technology and Minister of State for IT.
Comments
Comments are closed.