ISLAMABAD, Jan 4: The Economic Coordination Committee of the Cabinet (ECC) is meeting here on Saturday to discuss a number of important issues, including restructuring of the Pakistan Steel.

The official sources said on Friday the ECC, to be presided over by Finance Minister Shaukat Aziz, will discuss and approve new measures aimed at ensuring adequate supply of food items and petroleum products throughout the country keeping in view the growing tension in the region.

The ECC will also discuss restructuring of the Pakistan Steel for which its chairman Col (Retd) Mohammad Afzal has already arrived in Islamabad to attend the meeting.

The Pakistan Steel authorities were reportedly facing problems in paying off banks’ Rs12 billion loans due to increased rate of interest. Earlier, banks were charging roughly 12 per cent mark-up on the PS’s loans which had further been increased by another 1.5 per cent.

Sources said that Pakistan Steel was not in a position to return $2 billion to the banks during the current financial year due to increased rate of interest and its declining sales being experienced because of an anomaly created in the budget.

The anomaly committee has not been able to address the grievances of the PS to impose import duties on various items. In the budget for 2001-2002 duties on various steel items had either been removed or reduced, causing considerable loss to it.

According to the latest details given to the Ministry of Industries and Production, the Pakistan Steel’s sale has declined from Rs18.5 billion to Rs16.5 billion during July-December 2001, compared to the corresponding period last year. The shortfall of Rs2 billion was creating financial problems for the PS.

The ECC would be informed and requested to get the anomaly removed in the tariff announced on June 17, 2001 in the budget.

The PS had shown profit, after a long time, last year when it paid off Rs2.7 billion to the banks and at the same time paid Rs4 billion from its own resources to those employees who were retired under the Voluntary Separation Scheme (VSC).

The Ministry of Industries and Production has reportedly been informed that the PS inventory was in access of 200,000 tons of products as they could not be sold out due to relatively cheaper imported steel items.

Sources said the ECC would take the notice of declining sales and look into its problems relating to banks’ loans which were not being returned due to increased mark-up rate.

Earlier, a restructuring plan, approved by the Chief Executive, suggests repayment of around Rs11 billion in 12 annual instalments. Another Rs6 billion is to be paid after 12 years in a period of five years. Moreover, the interest was to be charged at 11.5 per cent, but when the PS showed some positive results, banks backed out of the agreement and wanted additional 1.5 per cent interest to ensure early repayment.