The government has expanded the scope of the Special Investment Facilitation Council (SIFC) to the domestic economic agenda aimed at addressing the problems faced by local investors and fixing the ills of the economy.
The elaborate agenda of the fifth meeting of the Executive Committee of the SIFC showed that the SIFC’s mandate is no longer restricted to the facilitation of foreign investment through swift decision-making.
The scope of the joint civil-military-led forum now includes performance reviews of various ministries, dispute resolution between investors and government departments, allocation of gas to various sectors, water supply schemes for major metropolitans, settlement of circular debt, and curbing oil smuggling.
The issue of the privatisation of ailing Pakistan International Airline (PIA) and the performance of Foreign Diplomatic Missions have also been debated at the SIFC forum.
The Executive Committee had a two-day-long meeting this week and finalised its recommendations for the apex committee of the SIFC. The apex committee is chaired by the prime minister with the army chief in attendance. The interim planning minister chairs the executive committee, with the chief of the general staff acting as national coordinator.
Read SIFC reviews measures to kick-start economic growth
During its two-day-long deliberations, the executive committee also reviewed the implementation status of the projects that the SIFC had shortlisted for offering to foreign investors.
There was some progress on the dilution of the government of Pakistan’s share in the Reko Diq project in favour of Saudi Arabia. The state-owned entities holding shares in the project on behalf of the government notified the stock market on Thursday about their decision to hire financial advisors for the transaction.
The executive committee is the second tier that thrashes out proposals for the endorsement of the apex committee of the SIFC, the final decision-making body.
Former Prime Minister Shehbaz Sharif had set up the SIFC on the advice of the military aimed at removing bottlenecks in the way of foreign investment from the Gulf and other countries.
During the army chief’s recent interaction with Pakistani businesspersons in Lahore and Karachi, it was revealed that local businessmen were also facing serious issues, and there was a need to expand the scope of the SIFC, said a senior Pakistani official on the condition of anonymity.
He said that the executive committee of the SIFC has become a kind of national policies and operational issues clearinghouse where all sorts of economic and business issues are being discussed and their solutions are agreed upon.
In its 5th meeting, the SIFC executive committee agreed upon a proposal to allow information technology services exporters to retain 50% of their earnings abroad. The current limit is 35%.
The executive committee discussed the electricity projects related issues faced by local investors and directed Faisalabad and Rashakai economic zones authorities for their resolution, according to a government official working in the PM office.
Until the local investors are satisfied and willing to make investments, no major foreign investment is possible, said the official while explaining the reasons behind the expansion in the mandate of the SIFC.
The growing role of the SIFC does leave a question mark on the working of the government that is now increasingly conceding its ground. A chief secretary of one province did object to the role of the SIFC in a matter, which according to the senior-most provincial bureaucrat did not fall in the SIFC mandate, said the sources.
While discussing the PIA issue, the privatisation minister sounded hopeful to privatise the airline by March next year. He wants to keep the airline with minimum cash injections by drastically curtailing its operations.
In its last meeting, the executive committee could not take a decision on the provision of gas to exporters on a priority basis. Similarly, there was no agreement on withdrawing the subsidised gas from the captive power plants. Both these decisions could not be taken due to the lack of availability of data, according to another government official.
There was also another proposal to cut the supply of gas to domestic consumers from the current eight hours to four hours in the winters and give gas to the industry. But no decision was taken due to the adverse impact on domestic consumers.
The SIFC papers showed that the body was also working for the implementation of the Weighted Average Cost of Gas policy. It also reviewed the pricing mechanism for imported coal and a plan for the provision of LNG to housing schemes.
The SIFC executive committee discussed a plan to enhance domestic production of LPG to provide affordable fuel to households and instructed to maximise the use of LNG terminals for the import of LNG by private businesses.
The SIFC body discussed the delisting of undeforming or dormant seed companies, reviewed the preparation of irrigation canal for the promotion of sustainable corporate farming, and urged to make a plan for horticulture development in Karachi.
No major decision could be taken on the agenda of water sector development-related issues. The SIFC wants an implementation plan for the National Water Policy for addressing water security issues and also a plan to meet water requirements for Islamabad and Rawalpindi.
Importantly, the executive committee discussed measures for the phased stoppage of smuggled fuel through existing checkpoints of law enforcement agencies.
The interior minister stated a few days ago that the government was not completely stopping the smuggling of goods; rather, it was discouraging it for the time being.
The executive committee reviewed the proposal for the extension of industrial tariffs to telecom companies, resolution of frequency allocation issues, and the award of new 5G licenses.
The matter of the finalisation of board members of Special Technology Zone Authority has also landed on the plate of the SIFC. The SIFC is also working for the resolution of disputed tax notices to software exporters.
In the energy sector, the SIFC has reviewed the proposals for the determination of benchmark tariffs for solar power plants and the conducting of bidding.
The executive committee also reviewed the progress made on signing a government-to-government framework agreement with Saudi Arabia for investment purposes.
The Wapda chairman and interim finance minister debated the issue of allowing Wapda to retain foreign currency accounts. However, the finance minister was not in favour of giving this permission due to its implications for the country’s foreign exchange reserves.
The SIFC body also discussed the alternatives to entertain demands for new electricity connections, a mechanism for the sale of electricity between business producers and business consumers, and the settlement of the Rs2.3 trillion circular debt.
The SIFC is also working on developing Pakistan’s first fuel economy standards for automobiles and tractors.
Published in The Express Tribune, October 1st, 2023.
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