The Economic Coordination Committee (ECC) on Thursday approved a bailout package of Rs6 billion as working capital for the ailing Pakistan Steel Mills (PSM) to enable it continuing its operations and avoid imminent shutdown.
However, the ECC had to defer many agenda items including energy audit of fertiliser plants, tax exemption on import of machinery to be used in gas import projects and revised gas load management plan due to long debate on three items including import of sugar, the issue of Latif gas field and Low BTU gas policy.
Cabinet Committee on Restructuring (CCOR) in its meeting held on November 5 had given the go-ahead to inject Rs6 billion as working capital into Pakistan Steel Mills and to provide Rs600 million for Pakistan Railways to pay arrears to Wapda.
A senior official who attended the meeting told The Express Tribune that ECC opposed the approval of importing 0.2 million tons of sugar at the rate of Rs63 per kg proposed by Ministry of Industries due to sugar availability at Rs52 per kg across the country.
The Ministry of Industries in its summary had warned that the country’s sugar stocks will be depleted in about 90 days. A sub committee comprising Finance, Industries and Commerce secretaries, was formed to look into the possibility of sugar import as well as to formulate a mechanism for negotiations with the sugar mill owners to purchase sugar below market prices.
Sources said that Minsiter for Water and Power Syed Naveed Qamar had raised concern over price proposed for Low BTU fields in Low BTU policy proposed by Ministry of Petroleum. Qamar said that Low BTU policy had component of gas price and should be referred to the Council of Common Interests (CCI).
ECC also deliberated on the summary proposed by Ministry of Petroleum and Natural Resources for laying down 50km pipeline from Latif field to Sawan plant where surplus capacity is available. The summary states that if new avenues to process raw gas from Latif field are not found then the gas network will lose additional gas availability to the tune of 50-70 MMCFD.
ECC was informed that the other company (Kandanwari Joint Venture) has refused to work on it due to low earning, so SSNGPL and SSGPL be allowed to accept Latif gas into the system by laying 50km pipeline at a cost of Rs2.31 billion with certain modalities. ECC approved in-principle the said proposal and formed a sub committee comprising Deputy Chairman Planning Commission and representatives from Finance division, Petroleum division and the Oil and Gas Regulatory Authority each.
Published in The Express Tribune, December 2nd, 2011.
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When would this 'bailout' strategy end? And from where they give away this huge amount of Rs.6 billion.....from the poor taxpayers' money. All praise to CJ....who stop the privatization of Steel Mill....now no one is damn interested in this project......Judiciary Zindabad...Bailout Paindabad
Keep on throwing money at these in-efficiently run government units. Why not investigate that who was responsible in 2008-2009 in theft, bad decisions etc which caused massive losses.
Why not put in independent Boards and efficient management in place please.
This seems to be more of an political decision than economic one
Bailing out the corrupt officials who looted the organization in the first place? How could SC let this happen? Sack the whole management and bring in qualified and clean people! The public should protest about this!
This is going to be Rs 6 billion in the pocket of some fat cat
Who cares. No one really understands these things in Pakistan.
for this mr. iftikhar chaudhry is solely responsible. if he just sould have let them sell it it would be a profitible institute now.
Ohh Finally thanks for this but i'm sure after six months it will need double...