ISLAMABAD: The Economic Coordination Committee (ECC) of the Federal Cabinet Tuesday approved an interim business plan presented by the Pakistan International Airlines (PIA) for next five years.

The ECC also allowed the Ministry of Finance to issue continuing fresh guarantees amounting Rs 49 billion during the current year to meet with the critical liquidity condition of the corporation.

The ECC, which met here with Federal Minister for Finance and Economic Affairs Saleem H. Mandviwalla in the chair, agreed to the request of Ministry of Defence for arrangement/provision of US $ 46 million by the Ministry of Finance with or without Government of Pakistan's guarantees enabling the PIA to acquire five narrow body aircraft to replace its ageing fleet.

The ECC also agreed to the proposal for extending the loans/guarantees of Rs 33.5 billion until June 2013.

It also agreed to the borrowing by PIA of Rs 13.50 billion from the National Bank of Pakistan (NBP) against a letter of comfort to be subsequently replaced by the government's guarantees.

The approved measures / strategy for the PIA would provide for fuel efficiency through fleet modernisation, optimum fleet deployment on network, introduction of additional frequencies on high demand high yield routes, revenue enhancement and increase in market share, separation of the core airlines business activities from non-core (SBUs) and restructuring of PIA's liabilities to reduce financial cost.

The ECC on a summary moved by the Ministry of Petroleum and Natural Resources, approved the margin for oil marketing companies and dealers to be increased by Rs 0.10 per litter on high speed diesel.

The ECC, on another summary moved by the Ministry of Petroleum and Natural Resources seeking its approval for the recovery of PARCO claims from freight pool (IFEM), directed the OGRA to continue with the implementation of its earlier decision dated August 16, 2011 and reimburse the price difference to PARCO as per existing practice.

The ECC approved the proposed mechanism/formula for computation of ex-refinery price of high speed diesel (HSD) price due to change of benchmark price from HSD 0.5 sulphur to HSD 0.5 pc Sulphur (Euro-II), which would remain in force till June 30, 2014. The summary for the purpose was also submitted by the Ministry of Petroleum and Natural Resources.

The ECC banned the marketing of high speed diesel with sulphur content more than 0.5 per cent (Euro-II) grade high speed diesel in the country.

The ECC agreed to the proposal of Ministry of Petroleum and Natural Resources for allocation of first 20 MMCFD gas from SSGC share from new discoveries to 100 MW Nooriabad Industrial Estate power plant as requested by the Government of Sindh.

The ECC further directed that the allocation of the said gas from SSGC (Sui Southern Gas Company) should be placed at the disposal of Ministry of Water & Power till the power plant at Nooriabad Industrial Estate gets operational.