ECC approves release of $29.9 million to secure dry lease of planes for PIA

Export of 250,000 metric tonnes of sugar, import of 0.125 million tonnes of urea approved. Ban on gold extended.

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet met on Thursday approved a summary to release $29.9 million to secure eight planes for Pakistan International Airlines (PIA) on dry lease. Export of 250,000 metric tonnes of sugar, and import of 0.125 million tonnes of urea also approved.

Meeting at the Prime Minister House on Thursday, finance minister Ishaq Dar headed the meeting.

The committee considered and approved a summary of the aviation division for release of $29.9 million to Pakistan International Airlines (PIA) for acquisition of aircrafts on dry lease.

PIA intends to lease eight A320S offered by the Qatar Aviation Lease Company through international tender. These aircrafts will be available from April 2014.

Sugar export

ECC approved a summary of the ministry of commerce for the export of 250,000 metric tonnes of sugar by sugar mills from surplus sugar stock. However, it subjected export to the following conditions:

1. Quota will be allocated on first come first served basis.

2. Export may be made against irrecoverable letter of credit or a contract with a 25 per cent non-refundable advance payment.

3. Shipment may be made within 45 days of the registration of contract with the State Bank of Pakistan (SBP), and the non-refundable advance payment to be forfeited in favour of Government of Pakistan in case of non-performance.

The finance minister also directed the ministry of industries and production to ensure outstanding payments to sugar cane growers by sugar mills in coordination with the provinces.

Import of urea

In light of the upcoming Kharif season from April to September, the ECC approved a summary from the finance division for the import of 0.125 million tons of urea.

Acting on the recommendations by the ministry of national food security, Dar said that the previous decision made by the ECC to maintain the retail price of Rs1,786 per bag must be ensured in the local market.

The ECC also constituted a four-member committee comprising ministers for water and power, petroleum and natural resources, food security and industries and production to sort out the issue of gas supply to local urea manufacturers.

Utilising installed generation capacity

A summary of the ministry of water and power on utilisation of the existing available generation capacity from short term IPPs was reviewed by the ECC and approved, subject to the fact that it is not in violation of the Supreme Court’s Judgment dated March 30, 2012.

The Supreme Court had in March 2012 declared the import of power generation equipment under other scheme as illegal.

The ECC directed that respective project companies shall obtain generation license and tariff from NEPRA. While the terms and conditions for these tariffs will be determined by NEPRA, they will be based on a take and pay basis and electricity actually delivered to the national grid.

The power purchase agreement (PPA) shall be for three years. The draft PPA shall be prepared by the National Transmission and Despatch Company Limited (NTDCL) for short term IPPs for approval of the ECC. A no objection certificate from National Accountability Bureau (NAB) for utilisation of plant and machinery will be required.

Unconditional and irrecoverable waiver of claims of arbitration against the government and its entities shall be eligible under the short term IPPs framework.

Ban on gold import to continue

Despite the existing ban having stretched for three months, the ECC on Thursday told the ministry of commerce to resubmit its summary by incorporating guidelines provided by ECC. The ECC further directed the ministry to submit the summary in the third week of April, thereby extending the ban for another month.