ECC rejects PSM revival plan

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The Economic Coordination Committee (ECC) of the Cabinet on Wednesday rejected a multi-billion rupees Pakistan Steel Mills revival plan and approved inclusion of two kosher rental power plants, enhanced regulatory duty on sugar imports to protect the millers, incentive package for the defaulters of electricity bills and replacing FIA with NAB for power bills recovery.

An official source said the ECC meeting chaired by Finance Minister Ishaq Dar rejected the umpteenth version of PSM revival plan submitted by the ministry of industries. The ground for the rejection was the same as that of last time – the plan was not properly drafted and there was no surety that injection of Rs 6 billion into the mills will yield the desired results.

The source said that the committee was of the opinion that the privatization along with management control was the most viable option. On a proposal by the privatization commission, the committee approved payment of two months (January-February 2015) salaries to the employees of the steel mills and asked PSM to give a clear road map regarding its working so that a decision about its future status could be made accordingly.

In an apparent bid to protect the mighty sugar millers, the ECC approved a proposal of ministry of commerce to enhance regulatory duty on the import of sugar from 20 percent to 40 percent. It is important to mention that the sugar millers have already jacked up the sugar price from Rs 50 per kg in March to Rs 65 per kg in May. It is an exorbitant profit. With 20 percent regulatory duty the commodity was likely to be provided at Rs 60 per kg in the local market, a source said, adding that the sugar price was likely to be jacked up by the millers in Ramzan when use of soft drinks increases manifolds.

However, the committee failed to come up with any recommendations to forces the sugar barons to timely pay the dues of the sugarcane growers and mechanism to keep sugar prices stable. An official statement said the chair (Dar) asked the concerned ministries to keep an eye on the price trend of both the commodities in the market. The chair also called upon sugar millers to clear dues of the sugarcane farmers on priority.

On a proposal from the ministry of water and power, the ECC approved power purchase agreement from two rental power plants, which were earlier stopped under the Supreme Court decision but are now baptised by the power ministry as short term IPPS (STIPPS) to utilise the existing available generation capacity which is around 150 MW.

Regarding recovery of outstanding amounts and anti-theft campaign in DISCOs, the ECC decided that all cases of non-payment of dues during the period of three years preceding July 1, 2012, would be handed over to NAB for recovery.

A source said the performance of FIA in controlling power theft and recovery of electricity arrears was termed unsatisfactory by some of the committee members and it was decided to engage NAB in the exercise. However, the source said that NAB was unlikely to take interest as it had recently announced that it would only take cases that involve embezzlement of Rs 10 million.

However, the source said the committee was unsure about the recovery drive and decided to provide incentives for those who paid their dues. Under this package the defaulters who pay full amount up to July 31 will be given 30 percent rebate. A rebate of 25 percent will be allowed if they pay the full amount in August and 20 percent rebate in case they make the payment in the month of September 2015. It also approved 5 percent reward for the staff concerned for recovery of receivables of more than three years.

On a proposal by the ministry of national food security, the committee enhanced regulatory duty on import of wheat from 25 percent to 40 percent. The committee approved extension in time period for export of wheat and wheat flour for the provinces of Sindh and Punjab up to 31st July 2015. It may be mentioned that the ECC in its meeting in January 2015 had allowed the provinces of Punjab and Sindh to export a total of 1.2 million tons of wheat and later on 9th of February also allowed export of wheat flour. The ECC in its meeting on 19th of April had fixed 30th April as the date for export of wheat by Sindh and 15th May for Punjab. However, in view of the request by provincial food departments and Pakistan Flour Mills Association, the period for export has now been extended to 31st July with the instructions that export process be completed within 30 days beyond this date.

The meeting approved the proposal of the ministry of defence for the issuance of sovereign guarantee for procurement of 6 maritime patrol vessels (MPVs) for Pakistan Maritime Security Agency (PSMA) on soft loan basis at a cost of $ 135 million. The EAD, Finance Division and State Bank, will now take measures for issuance of guarantee to China shipbuilding and trading company (CSTC), the firm which was declared successful by the defence production division after international tendering for procurement of the six MPVs.

On a proposal by the privatization commission, the committee approved Rs 64 million for payment of two months (April-May 2015) salaries to the employees of the Pakistan Machine Tool Factory. The ECC approved to continue the subsidy for period of two year from 01-12-2014 to 31-12-2016 for agri-consumers of Balochistan.​

1 COMMENT

  1. When PSM was being privatized during Gen M, SC stepped in & stopped it, consequently, how much the govt has paid in loss, since then ? & now, it is being contemplated to privatize it so that no one but the Steel baron Sharif family takes it over through a front company….just wait & See.

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