Net hydel profit: ECC allows Wapda to borrow Rs25b to pay off K-P’s dues

ISLAMABAD:

The Economic Coordination Committee (ECC) allowed the Water and Power Development Authority (Wapda) on Saturday to borrow Rs25 billion from local banks to pay off part of the net hydel profit arrears owed to Khyber-Pakhtunkhwa.

The amount will be raised under the sovereign guarantee of the federal government, the committee decided in a meeting chaired by Finance Minister Ishaq Dar.

The federal and K-P governments have agreed on a total amount of Rs70 billion to be paid on account of net hydel profit owed to the province. The centre will pay the amount in four annual tranches, the first of which will amount to Rs25 billion.

The remaining tranches will amount to Rs15 billion each.

The ECC meeting also approved a revision in the margins of Oil Marketing Companies (OMCs) and Dealers on petroleum products. Turning down an Oil and Gas Regulatory Authority request, it linked the increase in margins with the consumer price index (CPI). The new margins, applicable from July 1, include Rs0.06 on petrol and high speed diesel (HSD) for OMCs, and Rs0.08 on petrol and Rs0.07 on HSD for dealers. It approved the payment of two-month salary to the employees of the Pakistan Steel Millis as well. The salaries will amount to Rs858 million in total.

The ECC also extended till May 31 the date the reduced 4% withholding tax rate on banking transactions for non-filers will remain in effect. It extended the period of the Export Processing Zone Status of Duddar Project till January 14, 2035 as well.

On a water and power ministry proposal to incentivise energy efficiency and conservation, Finance Minister Dar said such suggestions could only be entertained through the finance bill. He advised the ministries of water and power, climate change and industries, and the Federal Board of Revenue to put forth a joint proposal to be introduced in the finance bill towards this end.

Published in The Express Tribune, May 8^th, 2016.