ISLAMABAD, Dec 16: The Economic Coordination Committee (ECC) of the cabinet here on Tuesday allowed Passco to import half-a-million tons of wheat through international tenders “to build wheat reserves, stabilize prices, pre-empt hoarding and speculative tendencies”.

According to an official, acting after months of continuous increase in price of wheat by over 27 per cent over the previous year, the meeting, chaired by Finance Minister Shaukat Aziz, also decided to establish a committee under the minister for food, agriculture and livestock to monitor supplies and imports of wheat to ensure transparency.

To encourage modernization of railways and make it cost effective, the ECC decided to reduce from 10 per cent to five per cent the customs duty on import of locomotives and railway wagons in CKD or CBU condition.

The cabinet committee also decided to allocate gas for generation of power by the export industries having 70 per cent export target for their production or having sizable foreign investment. The gas would, however, be supplied as and when available and on the condition that the requirements of Wapda and KESC would be given first preference, a source stated.

These companies would be allocated gas for self-generation on the recommendation of the Board of Investment and the Export Promotion Bureau. The measure, the source said, was a long-standing demand of the industry and was likely to improve competitiveness by reducing the cost of production.

In order to make Habib Bank Limited attractive for privatization, the ECC approved issuance of bonds amounting to Rs9.840 billion against income tax refunds due to HBL.

After considering the problems of the soap industry, the ECC agreed to extend the rate of 10 per cent customs duty on palm stearin for the toilet soap manufacturers subject to the same conditions as are available in respect of the oelo-chemical/stearic acid industry.

These conditions require availability of in-house manufacturing facility and determination of requisite quantity of raw materials on the basis of a survey to be conducted by the Central Board of Revenue. The measure, it was expected, would remove tax anomaly and make the soap industry a viable commercial venture.

To further encourage the construction and housing industry, the cabinet committee allowed Pakistan Steel to import billets to increase their supply for the manufacture of MS products. The objective was to stabilize prices of steel and bridge the demand gap of 0.5 million tons of steel billets.

Besides, it was decided to reduce the customs duty on imported billets from 20 to 10 per cent for all importers, providing a level-playing field to the public and private sectors.

The ECC noted that equity-based investment abroad by resident Pakistanis as a result of liberalized economy and removal of control over foreign exchange amounted to $3.353 million during the period July-September 2003.

To ensure adequate supply of livestock within the country and to stabilize prices of mutton and beef, the meeting decided to check cross-border smuggling of live animals with the collaboration of law enforcing agencies, including assistance of the governors of NWFP and Balochistan and that of the CBR.

A committee was also established under the chairmanship of the agriculture minister to recommend effective measures for plugging the smuggling of live animals.

To ensure continued gas supply to various consumers during the peak winter months, the ECC considered gas supply and demand management programme for the year 2003-04.

The meeting was attended by the ministers for commerce, industries, water and power, railways, agriculture, petroleum, privatization, information technology and communications as well as the governor of State Bank, chairman of BoI, provincial agricultural ministers and secretaries of respective divisions.