Economic Co-ordination Committee (ECC) of the Cabinet headed by Finance Minister Senator Ishaq Dar on Saturday snubbed the top brass of Pakistan International Airlines (PIA) for seeking an amount much greater than $52 million to be paid for aircraft to be acquired on a dry lease, well informed sources told Business Recorder.
"PIA through Aviation Division sought Rs 20 billion for payment of 15 aircraft got on dry lease. However, when Finance Minister calculated the required amount he found it $52 million," the sources added. Finance Minister, sources said, took strong exception to miscalculations on part of PIA and directed that proposals submitted to the ECC must properly reflect the financial implications of the projects, encompassing all related aspects.
According to an official statement, ECC approved, in principle, the release of first tranche of $16.46 million for December out of the total $52 million requested by PIA for the induction of 15 aircraft in its fleet on a dry lease. This amount will be injected as equity by the Government of Pakistan (GoP). PIA has been directed to complete all codal formalities, fully adhering to the procurement rules.
ECC also constituted a committee comprising Secretary Finance, Chairman SECP and Secretary Petroleum and Natural Resources to analyse financial statements/projections before the second tranche is released. PIA will revert to ECC after December 20 when the amount granted will be fully exhausted for the fresh instalments which will be paid on a monthly basis as per requirement.
The Finance Minister directed PIA authorities to inform the forum at least two weeks before the actual payments are due so that the timely release of funds is made possible. The ECC also approved the establishment of Inland Container Terminal in Sialkot under the Customs Act, 1969. The committee was informed that the addition of one more inland container terminal in Sialkot would not only facilitate exporters but also improve services because of a healthy competition.
ECC also approved the allocation of gas from existing and new gas fields, as requested by the Ministry of Petroleum and Natural Resources. According to the approved plan, 30MMcfd additional Adhi gas is to be allocated to SNGPL enabling it to meet its existing contractual obligations. 01 MMCFD Gopang gas & 02 MMCFD Nim-01 gas, respectively, is allocated to SSGCL. A consistent decline in the level of gas production from the existing fields has triggered a huge gap between demand and supply in natural gas distribution system. The Ministry of Petroleum and Natural Resources is vigorously pursuing LNG import and transnational gas pipeline projects which will help sustain supplies to the system.
The sources said, Ministry of Industries and Production (MoI&P) did not submit a summary for approval of natural gas to Tuwairqi Steel Mills Limited (TSML) at cheap rates. Ministry of Petroleum is of the view that if the government approves TSML''s proposal, it will inflict Rs 5 billion loss per annum to the national exchequer.