The federal government has reportedly clipped the wings of Engineering Development Board (EDB), a technical body of Industries Ministry, by shifting the power to determine machinery, equipment and other capital goods to the Water and Power Ministry in "questionable" circumstances under Customs General (CGO)-05/2015. As per the government policy concessions are available on the import of plant, machinery, equipment and other capital goods, etc, under Fifth Schedule to the Customs Act 1969, which was earlier available under SRO 575(1)/2006.
Well-informed sources told Business Recorder that during Budget 2015-2016 Federal Board of Revenue (FBR) issued CGO.03/2015 on June 30, 2015 allowing the import of machinery, equipment and other capital goods as a plant for setting up new power units of 25 MW and above, duly certified by EDB on IPPs mode meant for the supply of electricity to national grid.
According to the CGO of CGO.03/2015, items like machinery, equipment and other capital goods were allowed under Fifth Schedule and were not subject to determination of local manufacturing status (CGO-11/2007). EDB, to maintain the transparency and quick disposal of different cases related to import of mentioned machinery, equipment and other capital goods as a plant under CGO-03/2015, constituted a committee. The first meeting of the committee was held on October 02, 2015, under the chairmanship of CEO - EDB, in the committee room of EDB, which was attended by the representatives from Ministry of Planning, Development and Reforms, FBR, PPIB, AEDB and concerned power companies. The meeting took the following decisions to accelerate the disposal of cases transparently: (i) the companies shall provide/submit the revised list of the machinery and equipment as per the bona fide requirements of the plant and details of the spares along with their quantity. The list should indicate per unit requirement of the machinery and equipment; and (ii) The companies shall provide/submit Engineering, Procurement, Construction and Commissioning (EPCC) contract, project related installation/ technical drawings of the plant along with BOQ showing details of inputs/raw materials.
According to sources, to facilitate the clearance of the consignments for uninterrupted activities of setting up of the power plant, EDB has been recommending clearance of partial consignments imported by power companies considering the status, capacity and mode of the power plant which include: (i) Sindh Nooriabad Power Co (Pvt) Ltd - 52.10MW; (ii) Sindh Nooriabad Power Co. Phase-Il (Pvt) Ltd, 52.10 MW; (iii) Gul Ahmed Wind Power Ltd - 50 MW; (iv) Metro Power Company Ltd - 50 MW; (v) Hydrochina Dawood Power (Pvt) Ltd - 49.5 MW; (vi) Yunus Energy Ltd - 50 MW; (vii) Tapal Wind Energy (Pvt) Ltd - 30 MW; (viii) Star Hydro Power Ltd - 147 MW Hydropower plant; (ix) Huaneng Shandong Ruyi (Pakistan) Energy (Private) Limited - 1320 MW coal-fired power plant; (x) Chiniot Power Limited - 62.4 MW Bagasse-fired co-generation power plant; (xi) Brest Green Energy Pakistan Limited - 100 MW solar power plant; and (xii) Crest Green Energy Pakistan Limited - 100 MW solar power plant.
The sources revealed that on November 09, 2015 FBR issued CGO-05/2015 and the role of EDB for determination of machinery, equipment and other capital goods was shifted to the Ministry of Water and Power EDB, accordingly, vide a letter, informed all the relevant quarters about the procedure to be carried out to dispose of the cases related to import of power plants of 25 MW and above.
While evaluating the cases EDB allowed only those items falling under the definition of machinery, equipment and other capital goods under CGO-03/2015 whereas the list of the machinery and equipment provided by the firms contained such items which were not eligible to allow under the CGO-03/ 2015 CGO (such as concrete mixer, dump trucks, street lights, kitchen range, restaurant & saloon equipment etc).