ISLAMABAD, June 28: In the midst of a power crisis, the government on Thursday extended the deadline till 2010 for big business houses and existing independent power producers (IPPS) to set up power projects of about 2,250MW capacity without any change in the tariff and benefits.
Prime Minister Shaukat Aziz presided over the meeting of the Economic Coordination Committee (ECC) of the cabinet which also decided to continue with the ban on export of wheat for an indefinite period, saying “there will be no export of wheat under any circumstances” because wheat and flour prices had “increased unnaturally” despite record output and available stocks.
Briefing newsmen after the ECC meeting, economic adviser of the finance ministry Dr Ashfaq Hassan Khan said the meeting asked ghee and edible oil manufacturers to take account of the decline in international prices of palm oil from $869 to $760 per ton.
He said leading business houses and existing IPPs had not been able to achieve their various performance deadlines like financial close, etc., and hence they were given flexibility in deadline until 2010. He said business houses and existing IPPs would set up thermal power plants of about 1,450MW and 750MW capacity, respectively.
He declined to respond when asked why were the business houses and IPPs granted another favour when they had been allowed the highest-ever tariff of 12.4 cents per unit by setting aside rules and regulations, so that the projects were developed on a fast-track basis by 2008-09.
He declined to respond when asked if the extension in performance deadlines would result in lower tariffs.
It may be noted that most of these power projects were exempted from rules and existing power policy with the objective of increasing power-generation capacity by 2008 or 2009. They were granted average tariffs of 12.4 cents per unit, including 18.8 cents during the first 10 years.
The ECC also linked reduction in tariff on import of betel leaf from 35 per cent to 20 per cent and no tariff on import of herbal cosmetics and ceramic tiles from Sri Lanka with a written assurance from Colombo that there would be no export of any auto-parts. As a result, the import of auto-parts from Sri Lanka would now fall in the negative list as a quid pro quo to the reduction in tariff on import of betel leaf and other items.
