ISLAMABAD, July 11: The Economic Coordination Committee of the Cabinet (ECC) on Thursday approved the establishment of liquid cargo terminal at Port Qasim in private sector on build, operate and transfer (BOT) basis.

The meeting, presided over by Minister for Finance Shaukat Aziz, decided that the construction of terminal would not involve any government funding or guarantee, and that the private sector sponsors shall make the entire investment.

The setting up of liquid cargo terminal will provide modern facilities for export of molasses and import of edible oil, which could be re-exported to Afghanistan and Central Asian States.

To be operated on BOT basis for a period of 30 years, extendible for another 30 years on mutually agreed terms and conditions, the terminal has capacity of berthing ships up to 35,000 dead weight ton (DWT) with annual handling capacity of 4 million tons.

According to an official announcement the ECC approved exemption of canola seeds from sales tax altogether from the date of insertion of that entry in sales tax law to encourage local cultivation of canola.

The ECC noted that after nine years of stagnation, the steel consumption in the country increased by 8 per cent. Similarly, cement consumption, in spite of economic shocks from January-June, 2002 was 5.14 million tons, registering an increase of 7.6 per cent. The cement consumption during July-December 2001 was 4.76 million tons.

It further noted that prices of essential items more or less remained stable, ample stock of ghee, sugar, rice, wheat and oil were available in the country. The meeting asked the minister for commerce to coordinate monitoring of prices of fertilizer.

The ECC directed that since the market share of branded ghee was around 15 per cent, a realistic price sampling of other products of ghee be carried out to assess impact of GST and rise in international prices of palm oil. The meeting further decided to ensure quality control of ghee products to protect consumers from spurious marketing.

The ECC noted that the gross reserves have crossed $6.5 billion. This figure is likely to improve further as it does not include disbursements of IMF and World Bank loans. It noted stability in exchange rates, which in turn has helped export sector. The meeting noted that trade deficit during the year 2001-2002 was brought down to $1.2 billion as compared to trade deficit of $1.75 billion during the year 2000-2001. The export reached $9.2 billion in 2001-2002 and target for next year is $10 billion.

The meeting noted with satisfaction recovery in exports during 2001-2002 of cotton cloth ($100 million), cotton made ups ($174 million), ready-made garments ($56 million) petroleum products ($17 million) and machinery ($27 million).

The ECC further noted decrease in the prices of nine items including farm chicken, vegetable ghee (loose), gur, mutton and moong pulse. Prices of 25 items including rice, bread, milk, tea, cooked beef, bath soap remained unchanged. However, prices of 17 items including tomatoes, kerosene, potatoes, basmati rice, onions, eggs and electricity charges registered marginal increase.

The meeting, among others, was attended by ministers for commerce, communications, labour and manpower, environment, agriculture, privatization, advisor on agriculture, secretary general, Finance, deputy chairman, Planning Commission, chairman, BoI, and federal secretaries.