The Economic Co-ordination Committee (ECC) of the Cabinet on Thursday decided to import 500,000 tonnes of wheat, in addition to one million tonnes approved a couple of months ago. It was presided over by caretaker Prime Minister Mohammedmian Soomro also approved acquisition of shares of Diamond Trust Bank of Kenya by the Habib Bank Limited (HBL).
The State Bank of Pakistan (SBP) had recommended the request of the HBL for making equity investment amounting $15 million in Diamond Trust Bank, Kenya. The ECC has also allowed the Pakistan Electric Power Company (Pepco) to negotiate 450-500 MW thermal power plant with the Chinese firm, Dongfeng, after Qatar Investment Authority (QIA) failed to come up with tariff proposal.
It was informed that despite the recent increase in price of wheat flour in the country, the flour price is still the cheapest in the world. The international price of wheat flour is Rs 35 per kg; price of wheat flour exported to Afghanistan at Rs 27 per kg; the price of wheat flour in India is Rs 31.5 per kg and it is selling at the national average rate of Rs 19.3 per kg.
The total wheat stock as on December 24, 2007 is 2.428 million tonnes. The provincial governments have released 2.306 million tonnes of wheat to flour mills by December 24, 2007.
The provincial governments have increased the releases to 31,700 tonnes per day after December 15, 2007 from 25,900 tonnes before December 15, 2007 - an increase of 22.4 percent with a view to stabilising wheat flour prices in the country. The ECC was informed that by February-end 2008, at least 971,680 tonnes of imported wheat will be available to the country.
After discussing the wheat availability, the ECC approved the import of additional 500,000 tonnes of wheat in addition to 1.0 million tonnes. Therefore, the total imported wheat will be 1.5 million tonnes.
The Committee also asked the State Bank of Pakistan (SBP) to strictly monitor the credit given to private sector for wheat operation and must not allow refinancing after January-end 2008.
The commercial banks have also been asked to make sure that the private sector does not borrow from other banks to retire its current borrowing and keep the wheat hoarded. The Committee has asked the provincial governments to locate the wheat purchased by the private sector and keep track of its offloading.
The federal government is writing letters to the provincial governments to strictly monitor the performance of flour mills and ensure the availability of flour in the markets. The Committee also approved Combined Cycle Power (CCP) Plant projects at Chichoki Mallian on the proposal of Pepco to negotiate the project with the Dengfong (DEC) of China which was already establishing 450-500 MW plant at Nandipure as the company was the second lowest bidder of this project.
Pepco was of the view that the ECC because Qatari Investment Authority (QIA) failed to submit tariff petition with Nepra, as advised by the ECC till November 30, 2007. At the recommendation of the Pepco board and the Board of Directors of Northern Power Generation Company, the ECC approved the award of the Nandipur CPP projects of 425 MW to the Dengfong (DEC), China.
The ECC approved placement of 60 mmcfd gas at the disposal of Ministry of Water and Power to undertake the fast track power projects in Karachi area. Accordingly, the it approved the allocation of 10 - 12 mmcfd gas to 48 MW barge mounted power project at Port Qasim by the Envicon and 32 mmcfd gas to 136 MW power project by the One World Consultant Inc for two years or till the time of commissioning of new IPPs for which this gas was originally allocated, whichever is earlier.
It may be noted that this 60 mmcfd gas was earmarked for two IPPs namely the Tapal and the Fauji Korangi at Karachi. The two planned IPPs are delayed for about two years from the projected time frame of 2007-08 and 2008-09.
ECC also approved the policy guidelines on LPG air mix which will benefit the far flung areas of the country where piped gas cannot be delivered. The ECC also accorded approval that English Law will be applicable to the direct agreements for foreign lenders participating in the project provided that obligations or liabilities of GoP under the Implementation Agreement, Power Purchase Agreement and GoP guarantee are not increased.
The Committee meeting was adjourned at the sad news of the death of Benazir Bhutto. The prime minister and the cabinet members attending the ECC meeting expressed great sorrow and grief over the unfortunate incident.