PIA seeks Rs3.2b to pay interest on loans
ECC likely to approve cash support in its meeting today
PHOTO: REUTERS
ISLAMABAD:
Pakistan International Airlines (PIA) has sought allocation of Rs3.2 billion worth of additional funds, which will help it pay mark-up on loans.
The Economic Coordination Committee (ECC) of the cabinet, in its meeting scheduled for Wednesday, is likely to approve the Rs3.2-billion cash support required by PIA for bearing mark-up cost on loans taken against government guarantees.
In a meeting held on December 30, 2017 under the chairmanship of former prime minister, it was decided that the mark-up on debt of PIA Company Limited (PIACL) would be picked up by the government for five years and its payment would be made directly to the lenders. The government had allocated Rs24.5 billion in the budget for 2019-20 for payment of mark-up on guaranteed loans on the basis of assumption of Karachi Inter-bank Offered Rate (Kibor). Subsequently, the actual demand rose due to drastic changes in Kibor.
A summary was prepared by the Aviation Division for the ECC regarding government support required by PIACL for loan mark-up on July 9, 2019. The ECC, in its meeting held on July 17, 2019, considered the summary but put off any decision with directives that the proposal may be re-submitted after the completion of Hajj operation in 2019.
A shortfall of Rs3.2 billion exists in the budgetary allocation related to mark-up payments on government-guaranteed loans. This shortfall is due a drastic change in Kibor, which stood at 13.5%, and re-appropriation of funds amounting to Rs600 million for in-flight entertainment. PIACL has requested additional funds/grant so that obligations on account of mark-up could be met.
Allocation to combat locusts
In a bid to combat locust attack, the ECC is likely to approve provision of funds amounting to Rs100 million for tackling the insect in Punjab. Locust swarms have rapidly grown globally as well as regionally, including Pakistan, and have posed a serious threat to the agriculture sector. Pakistan is an important frontline country for desert locusts because of summer and spring breeding.
Summer breeding normally occurs along the Indian border in the deserts of Tharparkar, Khipro and Cholistan (Sindh and southern Punjab) while spring breeding happens every year in Balochistan. Considering the imminent threat to Pakistan’s food security due to locust attack in various parts of the country and neighbouring countries, a national emergency has been declared by the federal government. In a high-level meeting headed by the prime minister on January 31, 2020, the National Action Plan (NAP) on Desert Locust Surveillance and Control was approved.
Budget requirements for the implementation of NAP in 2020 were approved in principle and the NDMA was tasked with ensuring immediate procurement of pesticides in consultation with the Department of Plant Protection (DPP).
In pursuance of the prime minister’s directives, the National Locust Monitoring Centre was established by the NDMA in close coordination with all provinces and relevant stakeholders.
For combating locust attack in Pakistan, the Provincial Disaster Management Authority (PDMA) Punjab said Rs100 million may be credited into the account of federal government in lieu of purchase of six vehicle-mounted spray machines and balance amount for the purchase of Malathan.
Published in The Express Tribune, June 17th, 2020.
Pakistan International Airlines (PIA) has sought allocation of Rs3.2 billion worth of additional funds, which will help it pay mark-up on loans.
The Economic Coordination Committee (ECC) of the cabinet, in its meeting scheduled for Wednesday, is likely to approve the Rs3.2-billion cash support required by PIA for bearing mark-up cost on loans taken against government guarantees.
In a meeting held on December 30, 2017 under the chairmanship of former prime minister, it was decided that the mark-up on debt of PIA Company Limited (PIACL) would be picked up by the government for five years and its payment would be made directly to the lenders. The government had allocated Rs24.5 billion in the budget for 2019-20 for payment of mark-up on guaranteed loans on the basis of assumption of Karachi Inter-bank Offered Rate (Kibor). Subsequently, the actual demand rose due to drastic changes in Kibor.
A summary was prepared by the Aviation Division for the ECC regarding government support required by PIACL for loan mark-up on July 9, 2019. The ECC, in its meeting held on July 17, 2019, considered the summary but put off any decision with directives that the proposal may be re-submitted after the completion of Hajj operation in 2019.
A shortfall of Rs3.2 billion exists in the budgetary allocation related to mark-up payments on government-guaranteed loans. This shortfall is due a drastic change in Kibor, which stood at 13.5%, and re-appropriation of funds amounting to Rs600 million for in-flight entertainment. PIACL has requested additional funds/grant so that obligations on account of mark-up could be met.
Allocation to combat locusts
In a bid to combat locust attack, the ECC is likely to approve provision of funds amounting to Rs100 million for tackling the insect in Punjab. Locust swarms have rapidly grown globally as well as regionally, including Pakistan, and have posed a serious threat to the agriculture sector. Pakistan is an important frontline country for desert locusts because of summer and spring breeding.
Summer breeding normally occurs along the Indian border in the deserts of Tharparkar, Khipro and Cholistan (Sindh and southern Punjab) while spring breeding happens every year in Balochistan. Considering the imminent threat to Pakistan’s food security due to locust attack in various parts of the country and neighbouring countries, a national emergency has been declared by the federal government. In a high-level meeting headed by the prime minister on January 31, 2020, the National Action Plan (NAP) on Desert Locust Surveillance and Control was approved.
Budget requirements for the implementation of NAP in 2020 were approved in principle and the NDMA was tasked with ensuring immediate procurement of pesticides in consultation with the Department of Plant Protection (DPP).
In pursuance of the prime minister’s directives, the National Locust Monitoring Centre was established by the NDMA in close coordination with all provinces and relevant stakeholders.
For combating locust attack in Pakistan, the Provincial Disaster Management Authority (PDMA) Punjab said Rs100 million may be credited into the account of federal government in lieu of purchase of six vehicle-mounted spray machines and balance amount for the purchase of Malathan.
Published in The Express Tribune, June 17th, 2020.