02 February 2005	Wednesday	22 Zilhaj 1425

ISLAMABAD, Feb 1: The Planning Commission on Tuesday approved 31 development projects worth Rs57 billion but 'returned' the expansion of Pakistan Steel Mills (PSM) project by saying that the matter be got cleared from the board of directors of the Mills.

Informed sources told Dawn that Deputy Chairman of Planning Commission Dr Akram Sheikh, who presided over the Central Working Development Party (CWDP) meeting, expressed the hope that the finance division would extend the required funds for the approved projects so that they got completed on time.

However, he directed the authorities of the PSM to seek the approval of Rs12 billion Balancing, Modernization and Replacement (BMR) of the Mills from its board of directors. Dr Sheikh said that the board could approve the expansion plan as the project was to be completed under the 'self financing' programme.

The sources said that the deputy chairman cited one of the decisions of the Executive Committee of the National Economic Council (Ecnec) that the self-financed development projects should be referred to the board of the directors of the organizations concerned for approval.

While Dr Sheikh viewed that the board of directors of public sector corporations were competent to approve their development projects, he did not say how the cost of the Foreign Exchange Component (FEC) of the expansion plan would be met.

During the first phase, the Mills' production capacity is to be expanded from 1.1 million tons to 1.5 million tons at a cost of Rs12 billion. The sources said that since FEC cost of the Mills was more than 25 per cent, its authorities would have to seek special permission from the finance ministry, which was still under Prime Minister Shaukat Aziz.

The PSM had submitted a PC-1 of the expansion plan before the CWDP for necessary vetting and eventual approval. But the sources said that since four countries were involved in the expansion plan - Russia, China, Austria and Ukraine - the Planning Commission did not make it explicit whether it approved the project or disapproved it.

"Since it is also not clear as to who would finance FEC cost of the project and the Planning Commission does not have any idea whether Russia or China are ready to offer suppliers' credit for it, therefore, the matter needs to be looked into by the higher authorities," a source privy to the CDWP meeting said. The mega projects approved by the meeting included procurement/manufacture of 100 new locomotives for Pakistan Railways (Rs15.8 billion).