October 26, 2003	Sunday	Sha’aban 29, 1424

ISLAMABAD, Oct 25: The Economic Coordination Committee (ECC) of the cabinet on Saturday approved the establishment of sugar buffer stock to stabilize prices in the country.

The decision among others was taken here at the ECC meeting presided over by Finance Minister Shaukat Aziz.

The meeting decided to procure 200,000 tons of sugar in two instalments. The first instalment of 100,000 tons will be procured by the government after Eid. The second instalment of remaining 100,000 tons will be purchased in January 2004 from those mill owners who have cleared all their outstanding dues to sugarcane growers and have started crushing season not later than November 15.

These measures will ensure settlement of outstanding dues to the growers and at the same time provide an incentive to sugar mills to continue their operations in the ensuing crushing season.

The ECC approved the recommendation of the ministry of food and agriculture to export 50,000 tons urea to Afghanistan immediately on the condition that only manufacturers would be allowed to export and the share of export of each manufacturer would be determined according to their total share in the local production of urea. The decision would encourage increase in urea production and its legal trade with Afghanistan.

The ECC also approved the proposal of the ministry of water and power for signing an MoU on New Bong Escape Project. The proposal includes ownership of the project to be transferred to the government after the concession period; and payment of water use charges by Wapda in Pakistani rupees to the government of Azad Jammu and Kashmir.

It was agreed to improve analytical capability at Minfal and set up a separate agriculture export unit at the Export Promotion Bureau for making better estimates of export surpluses and related analysis of global trends and availability of agricultural produce. The Minfal and the commerce ministry will come up with specific recommendations so as to improve agricultural variety and exports.

The ECC also approved criteria for the establishment of oil marketing companies proposed by the ministry of petroleum and natural resources. The criteria have been developed keeping in view international standard, practices and policies.

The criteria include upfront paid-up capital of Rs100 million, which would be subsequently raised to Rs500 million through debt equity ratio of 60:40, experience in oil marketing, marketing plan, investment infrastructure, financial capability and expertise and quality control in the relevant field. The criteria would ensure transparency through across-the-board policy for establishment of oil marketing companies.

The meeting also approved proposal for Civil Aviation Authority’s swapping of expensive foreign loans with local soft loans against government guarantees. This would improve CAA’s cash flow, reduce cost of borrowing and provide budgetary space for investing in creating better airport facilities in the country. The ECC noted that total amount of $25.680 million was invested abroad by resident Pakistanis in equity-based projects.

State Bank Governor Dr Ishrat Hussain informed the ECC that remittances were on target at $890 million for the first quarter after adjusting for usual items like Haj sponsorship.

He told the meeting that