Islamabad, October 23, 2012 (PPI-OT): The Economic Coordination Committee (ECC) of the Cabinet under the chairmanship of Dr. Abdul Hafeez Shaikh, Federal Minister for Finance and Economic Affairs met here today to discuss various agenda of national importance.
After reviewing the liquidity conditions of Pakistan International Airlines Corporation (PIAC), the ECC extended repayment period for loan (Sukuk Certificates) of PIAC for 2 years. In the same way, after considering the severe liquidity crisis faced by PIAC, ECC approved to issue guarantee for fresh loan of Rs.9.36 billion to PIAC. However, ECC directed PIAC officials to present their detailed business plan in the next ECC meeting.
The ECC also approved up-gradation of capacity of Wah Brass Mills (Pvt) – Project of Wah Industries from 7000 MT to 24000 MT. In order to achieve this enhanced capacity, ECC approved (a) a loan of US$ 16 million at the rate of annual average cost of borrowing of the Government for FY/2012-13 to be repayable over a period of 7 years and (b) issuance of letter of comfort/sovereign guarantee against loan facility to POFs Wah amounting to US$ 59.4 million, as demanded by Ministry of Defense Production.
The ECC also discussed a summary on protection of Motor Cycle Industry in Pakistan, presented by Secretary Commerce, proposing reduction in tariff for motor cycle industry and policy guidelines for new entrants in this industry.
The ECC, while agreeing in principle to gradually reduce custom duties in its previous meeting, approved reduction in general tariff on different categories of components used in motorcycle industry. It was decided that the rate of the approved tariff would be average of the existing rates and the commerce ministry’s currently proposed rates for each category. However, the new tariff will be reviewed after one year.
ECC also discussed summary on “Policy Guidelines for Energy Efficiency Audit of Captive Power Plants and Natural Gas Boilers, proposing reduction in efficiency benchmark for gas engines/gas turbines, combined cycle and boilers. As the comments from Ministry of Water and Power and Ministry of Textile Industry were not presented in the summary, it was decided to reconsider the summary in next ECC meeting after receiving the formal comments from both the Ministries.
On the summary of “LPG Production and Distribution Policy 2012” Minister for Law and Justice remarked that comments by his ministry are not present in the summary. After discussing the different dimensions especially arguments given by Minister for Law and Justice, ECC decided to reconsider the summary in the next meeting after having formal comments by the Law and Justice Division.
ECC also discussed summary on Import Policy of Used Cars submitted by Ministry of Industries. Secretary Industries argued that huge import of used cars are severely damaging the domestic car industry and proposed to reduce the age of used cars from five years to three years. After due deliberations, ECC constituted a committee comprising representatives from Ministry of Industries, Commerce, FBR and Production to work out further and give a detailed presentation in the next ECC.
ECC discussed in detail on the allocation of gas to fertilizer plants from dedicated sources. It was informed to ECC that total 202 MMCFD would be made available through newly discovered fields and the fields having additional gas.
It was proposed to allocate this additional gas to four fertilizer plants. It was also informed that 1000 km long pipeline would be required to be established in order to utilize this additional gas from the fields. After considering the different aspects of the proposal, ECC gave in principle approval for establishment of 1000km long pipeline.
ECC also set up a committee comprising Ministers for Information and Broadcasting, Petroleum and Natural Resources, Law and Justice, Deputy Chairman Planning Commission and Secretary Water and Power to work on determination of legal modalities, mechanism for pricing, review of agreement and estimation of cost and time. The said committee will present their report in the next ECC.
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