Bank guarantee for ATT cargo waived

Govt decides to implement annual price adjustment in electricity prices from January

ISLAMABAD:

Pakistan on Friday waived the condition of provision of bank guarantees for Afghan transit cargo of imported urea passing through the Gwadar Port and also approved additional funds to strengthen its paramilitary force to flush out terrorists raising rear head in new areas.

The country also decided to implement annual price adjustment in electricity prices from January 2025 –- advancing it by six months to avoid a period of higher demand coupled with higher prices. It also sanctioned Rs90 million as cost to airlift Pakistani students stuck up in Kyrgyzstan in April last year.

The Economic Coordination Committee (ECC) of the cabinet approved nearly Rs1 billion for the operational requirements of Frontier Corps in Khyber-Pakhtunkhwa that is manning the western borders along Afghanistan.

The additional funds are approved to meet the new operational requirements for the areas of Chitral and Tirah valleys that are becoming new theaters for the terrorists. The funds were approved the day Pakistan's security forces killed five terrorists in Tirah valley.

Finance Minister Muhammad Aurangzeb chaired the ECC meeting. The ECC also relaxed an earlier condition for provision of bank guarantees for the Afghanistan bound transit cargo passing through the Gwadar port. Instead of bank guarantees, the importer will now provide insurance guarantees, according to the Ministry of Finance statement.

Pakistan had imposed stringent conditions on Afghan transit trade in October 2023 to discourage smuggling and to use it as an economic leverage against the Afghan government aimed at forcing it to take action against banned Tahreek-Taliban Pakistan –the terrorist outfit.

The relaxation is only for the import of DAP urea. Afghanistan imports about 900,000 tons of DAP every year to meet its requirements.

The government also approved Rs910 million in additional funds to strengthen its capacity for quality and safety checks of food exports to the European Union. The money has been approved to set up a new National Food Safety, Animal, and Plant Health Regulatory Authority (NFSAPHRA). It will be established by merging the Department of Plant Protection, Animal Quarantine Department and Federal Seed Certification and Registration Department.

Pakistan's $6 billion rice exports to the European Union and other countries recently came under threat after the European Union found serious quality standard issues. At present there is no EU accredited laboratory in Pakistan.

Out of the Rs910 million, an amount of Rs400 million will be utilized for the management and up-gradation of the land and Rs100 million will be spent on consultants –a sum that could have been saved.

The ECC also deliberated upon the proposal of the Ministry of Industries and Production regarding the disbursement of salaries to Pakistan Steel Mills (PSM) employees for the financial year 2024-25 (projected).

The Committee authorised the Finance Division to approve the payment of the projected net salary of Rs935.78 million for FY 2024-25, to be disbursed monthly according to the salary demand of PSM. These funds will be provided from the already approved budgetary allocation of Rs3.5 billion.

Despite Pakistan Steel Mills being shut down 10 years ago, there are still 2246 employees who are receiving salaries.

The government decided to advance the annual adjustment in the electricity prices to January this year aimed at avoiding a dual increase in prices on account of annual rebasing and high monthly and quarterly fuel cost adjustment in the peak summer season.

The ECC approved the proposal from the Power Division regarding the revision in the annual rebasing determination timeline, according to the Finance Ministry. It added policy guidelines were approved to be issued to NEPRA for revising the annual tariff determination process timeline by amending the legal and regulatory framework.

The ECC directed that rebasing should be notified with effect from January 1, 2025, onward each year, following the completion of regulatory proceedings. The Power Division was authorized to approach NEPRA for the implementation of these policy guidelines.

The Ministry of Commerce presented a proposal seeking an extension of regulatory duties on finished flat steel products. The ECC approved extending 3% to 5% duties on iron and steel flat products until March 31, 2025.

The Tariff Policy Board had recommended maintaining the duties to protect protection given to the local millers. The ECC emphasized that no further extensions will be entertained, referencing the federal government's authority under Sub-section 3 of Section 18 of the Customs Act, 1968.

The ECC also approved Rs90 million funds for the Ministry of Foreign Affairs on account of clearing dues for repatriation of Pakistani students stuck up in Kyrgyzstan in April last year. Out of the Rs90 million, Rs15 million will be paid to Pakistan Air Force for one flight and Rs75 million to Pakistan Airlines for five operations of five flights.

The ECC considered the proposal of the Ministry of Overseas Pakistanis and Human Resource Development for budget proposals for FY 2024-25 and revised estimates for FY 2023-24 regarding Employees' Old-Age Benefits Institution (EOBI).

The ECC expressed strong displeasure over the delayed submission of the proposals by EOBI. While the budget proposals for FY 2024-25 were reluctantly approved, the revised estimates for FY 2023-24 were not approved. The ECC also registered its concerns over the delay in EOBI audits, with the last audit conducted in 2019. Relevant authorities were directed to thoroughly investigate the delay and submit an update to the ECC within one week.

Finance Minister Senator Muhammad Aurangzeb emphasized the importance of efficient and transparent implementation of all decisions to achieve desired outcomes, stated the Finance Ministry.