Home / Government Institutions / Ministry of Finance refutes claim of Chief Minister Sindh that Federal Government has not issued sovereign guarantee for Sindh-Engro Power Project to Chinese financiers for nearly two and half years

Ministry of Finance refutes claim of Chief Minister Sindh that Federal Government has not issued sovereign guarantee for Sindh-Engro Power Project to Chinese financiers for nearly two and half years

Islamabad, November 08, 2015 (PPI-OT):Spokesman of the Ministry of Finance has refuted the claim of CM Sindh that the Federal Government has not issued sovereign guarantee for Sindh-Engro Power Project, to Chinese financiers for nearly two and half years. The fact is that the government had agreed from the outset to issue the sovereign guarantee as soon as the Sindh Government agrees on giving a counter-guarantee, as the project is a public-private partnership between Government of Sindh and a private party (Engro).

The spokesman said that the Government of Sindh took a long time to agree to this condition and as soon as they consented, the Government of Pakistan approved the issuance of the sovereign guarantee after proper documentation. This is therefore a settled matter. About a week ago, the spokesman said, the financiers approached the ministry for approval of terms of financing for the rupee portion ($500 million) and issuance of guarantee for foreign currency portion ($200 million), which are being processed for early approval in the Ministry.

The spokesman said that the Federal Government has not only agreed to issue the sovereign guarantee but has also constantly included the Thar Coal Power project among the early harvest projects under the CPEC. Despite this outstanding support, it is quite regretful that the Chief Minister, Sindh has chosen unwarranted language against federal government.

Regarding the releases for K-4 project, the spokesman stated that Government of Sindh has not released any amount for this project so far. However, during 2014-15, against a budget estimate of Rs.200 million, Federal Government had released Rs.2.2 billion for this scheme. For current fiscal year 2015-16, another Rs.500 million is budgeted.

It is strange that CM Sindh has disregarded both these facts, i.e. that his government has not expended any expenditure and that federal government has released such a large amount for the project, which he has not even acknowledged. Given the significance of this scheme for the residents of Karachi, Federal Government assures the Government of Sindh that as much as they will spend on this scheme, the Federal Government will release matching grants.

The spokesman added there is no basis in the assertion that the Prime Minister had announced a package of Rs.12 billion for fight against terrorism. Equally baseless is the claim that the Government of Sindh is fighting this war alone from its own resources. The Prime Minister had not announced any such package.

More importantly, law and order is the responsibility of provincial governments and they are receiving a significant portion of national revenues for fulfilling such obligations. Yet, realizing the gravity of the situation, Sindh Rangers, a part of federal civil armed forces, has been deployed in Karachi and is leading the war against terror. All expenses of this force are borne by the Federal Government, the spokesman concluded.

For more information, contact:
Haji Ahmed Malik
Principal Information Officer
Press Information Department (PID)
Tel: +92-51-9252323 and +92-51-9252324
Fax: +92-51-9252325 and +92-51-9252326
Email: piopid@gmail.com

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