Rs 322 billion paid to IPPs; ECC told

The Economic Coordination Committee (ECC) of the cabinet was informed on Tuesday that as per its June 27 decision, Rs 322 billion had been paid to independent power producers (IPPs).
The ECC, which met with Finance Minister Ishaq Dar in the chair, was further informed that before the payment, the IPPs signed a memorandum of understanding with conditions of conversion to coal by projects with capacity of more than 2000 megawatts, optimal utilisations of available capacities by IPPs, one month extension in the payment period to PEPCO/CPPA and settlement of dues in accordance with the provision of the Power Purchase Agreement (PPA) and withdrawal of cases by nine IPPs from the Supreme Court.
This step will bring additional 1600-1700MWs to the national grid, which will considerably reduce power shortage in the country, further enhance the country’s credibility and boost up investors’ confidence, it was told.
The ECC also decided to liquidate balance of circular debt before July 21 instead of August 10 as originally envisaged. This step will bring further relief to the people of Pakistan.
The ECC was informed that pursuant to its June 27 decisions, the Universal Service Fund and Research and Development Fund formed under the Pakistan Telecommunication (Re-organisation) Act 1996, which had been held in accounts with scheduled banks, have been transferred to the Federal Consolidated Fund after necessary amendments in the Rules pertaining thereto.
The transfer is in conformity with the provisions of the 1996 Act which stipulate that the Funds shall be under the control of the federal government.
The USF Rules 2006 also stipulate that the Federal Government shall have the possession, management and control of the fund, its income, undertakings, properties and assets.
Similarly the RDF Rules 2006 read that the federal government shall administer control and manage the RDF.
Provisions in the Act/Rules relating to non-lapsing of credit balances in the Funds and procedures for release and utilisation of funds there from remain un-changed.
It may also be mentioned here that the Workers’ Welfare Fund and the Export Development Fund, which are of a similar nature, are also held in FCF.
The ECC was further informed that month on month CPI based inflation was estimated at 5.9 percent in June.
Food inflation was 7.9 percent and contributed 2.9 percent points to inflation in June, 2013 while non-food inflation registered at 4.4 percent and contributed approximately 3.0 percentage points to CPI inflation.
The ECC was also informed that Pakistan’s month on month inflation registered at 5.9 percent in June, 2013, while in India 9.3 percent (May 2013) followed by Bangladesh 7.9 percent (April 2013) and Sri Lanka 6.8 percent (June 2013).
The ECC was informed that stock of wheat as on June 24 was 6.4 million tons showing sufficient quality of wheat was available for daily release to mills by the Provincial Food Departments and PASCCO.
Sufficient stocks of sugar and POL products are also available, the ECC was told.
The ECC authorised the Petroleum Ministry to engage with the Government of Qatar for procurement of up to 500MMCFD LNG.
The summary for the subject approval was forwarded by the ministry. The ECC reviewed the fertiliser demand and supply situation for Kharif (April-September) season. After deliberation, the ECC approved to import a total of 300,000 tonnes of urea for Kharif 2013.
It was further decided that 60 MMCFD gas reserved for Guddo Power Plant from Mari Gas field, which was un-utilized, would be given to fertilizer sector to help produce 50,000 tonnes of fertiliser per month.
This will bring substantial saving to our foreign exchange, it was stated.