Offer derailed: Govt refuses to take on $112m Pak Railways debt
Believes it will set a precedent for other enterprises to follow.
The railways had obtained the loan from China’s Export-Import Bank for procurement. PHOTO: FILE
ISLAMABAD:
The government on Thursday turned down a request of Pakistan Railways that the state bear the burden of $112 million (about Rs11.5 billion) worth of debt liabilities that the sinking enterprise owes to China, which is feared to worsen the financial condition of the corporation.
Federal Railways Minister Khawaja Saad Rafique asked the Economic Coordination Committee (ECC) of the cabinet, in a meeting held on Thursday, to take on the $112 million debt as the railways was not able to service it, officials say. The railways had obtained the loan from China’s Export-Import Bank for procurement.
However, the government refused to bail out the railways. On the contrary, it approved a Rs7 billion life line for Pakistan International Airlines last week.
The railways wanted its debt to be made part of the national debt aimed at cleaning its books. However, ECC Chairman Ishaq Dar, who is also the finance minister, rejected the request, arguing that after Pakistan Railways other entities would also start seeking similar treatment.
The country’s total public debt has already crossed Rs14.5 trillion or 63.5% of gross domestic product, far above the ceiling of 60%.
Pakistan Railways is facing acute financial problems and is unable to pay salaries and pensions to its employees without seeking grants from the government. Last week, the government gave a grant of Rs500 million to the railways for repairing out-of-order locomotives.
Registering NGOs
In the meeting, the ECC also constituted a committee to streamline the process of registering international and domestic non-governmental organisations.
The committee, to be headed by Science and Technology Minister Zahid Hamid, will submit its report to the ECC in two months and suggest how to check the rapid growth of INGOs and NGOs in the country.
According to a report of the Abbottabad Commission, there was no foolproof mechanism for registering INGOs and NGOs and their monitoring, posing a serious security threat to the country. Most of the NGOs are directly taking funds from international donors like the USAID and their aim is not known to state institutions.
The commission has called for strict security mechanisms to be put in place as most of these NGOs have become a tool for foreign spying.
Some of the organisations that are working to eradicate poverty in the country like the Pakistan Poverty Alleviation Fund (PPAF) have been accused of corrupt practices and found misusing borrowed money. The PPAF is allegedly spending the World Bank loan on its executives, according to a draft audit report.
LNG terminals
The ECC also approved three different projects for the construction of terminals for import of liquefied natural gas (LNG), according to an official handout.
It allowed the establishment of Engro Terminal, which will likely be completed in eight months at an estimated cost of $30-40 million and having a capacity of 200 million cubic feet per day (mmcfd).
However, modalities of the project have to be finalised by the finance and petroleum secretaries.
The ECC also reaffirmed its earlier approval for the SSGC LPG Retrofit Project estimated to cost $175-200 million with a capacity of 500 mmcfd.
It agreed to initiate the process of launching a new LNG terminal project at an estimated cost of $200-250 million with handling capacity of 500 to 1,000 mmcfd. Both the projects will be completed in two to three years.
The ECC approved such important projects without a thorough debate and in less than five minutes, according to the officials who attended the meeting.
The ECC did not extend the expiry date for quotas of those traders who had not been able to export sugar within the stipulated period. These quotas will now be awarded on first-come-first-served basis to the applicants who will establish irrevocable letter of credit with a shipment date within 60 days.
Published in The Express Tribune, July 19th, 2013.
The government on Thursday turned down a request of Pakistan Railways that the state bear the burden of $112 million (about Rs11.5 billion) worth of debt liabilities that the sinking enterprise owes to China, which is feared to worsen the financial condition of the corporation.
Federal Railways Minister Khawaja Saad Rafique asked the Economic Coordination Committee (ECC) of the cabinet, in a meeting held on Thursday, to take on the $112 million debt as the railways was not able to service it, officials say. The railways had obtained the loan from China’s Export-Import Bank for procurement.
However, the government refused to bail out the railways. On the contrary, it approved a Rs7 billion life line for Pakistan International Airlines last week.
The railways wanted its debt to be made part of the national debt aimed at cleaning its books. However, ECC Chairman Ishaq Dar, who is also the finance minister, rejected the request, arguing that after Pakistan Railways other entities would also start seeking similar treatment.
The country’s total public debt has already crossed Rs14.5 trillion or 63.5% of gross domestic product, far above the ceiling of 60%.
Pakistan Railways is facing acute financial problems and is unable to pay salaries and pensions to its employees without seeking grants from the government. Last week, the government gave a grant of Rs500 million to the railways for repairing out-of-order locomotives.
Registering NGOs
In the meeting, the ECC also constituted a committee to streamline the process of registering international and domestic non-governmental organisations.
The committee, to be headed by Science and Technology Minister Zahid Hamid, will submit its report to the ECC in two months and suggest how to check the rapid growth of INGOs and NGOs in the country.
According to a report of the Abbottabad Commission, there was no foolproof mechanism for registering INGOs and NGOs and their monitoring, posing a serious security threat to the country. Most of the NGOs are directly taking funds from international donors like the USAID and their aim is not known to state institutions.
The commission has called for strict security mechanisms to be put in place as most of these NGOs have become a tool for foreign spying.
Some of the organisations that are working to eradicate poverty in the country like the Pakistan Poverty Alleviation Fund (PPAF) have been accused of corrupt practices and found misusing borrowed money. The PPAF is allegedly spending the World Bank loan on its executives, according to a draft audit report.
LNG terminals
The ECC also approved three different projects for the construction of terminals for import of liquefied natural gas (LNG), according to an official handout.
It allowed the establishment of Engro Terminal, which will likely be completed in eight months at an estimated cost of $30-40 million and having a capacity of 200 million cubic feet per day (mmcfd).
However, modalities of the project have to be finalised by the finance and petroleum secretaries.
The ECC also reaffirmed its earlier approval for the SSGC LPG Retrofit Project estimated to cost $175-200 million with a capacity of 500 mmcfd.
It agreed to initiate the process of launching a new LNG terminal project at an estimated cost of $200-250 million with handling capacity of 500 to 1,000 mmcfd. Both the projects will be completed in two to three years.
The ECC approved such important projects without a thorough debate and in less than five minutes, according to the officials who attended the meeting.
The ECC did not extend the expiry date for quotas of those traders who had not been able to export sugar within the stipulated period. These quotas will now be awarded on first-come-first-served basis to the applicants who will establish irrevocable letter of credit with a shipment date within 60 days.
Published in The Express Tribune, July 19th, 2013.