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ISLAMABAD, Aug 29: The ministries of food and finance are in a serious row over the proposed export of wheat flour to Afghanistan as the domestic market is yet to come out of rising food shortage.
A meeting of the Economic Coordination Committee (ECC) of the cabinet has been convened here on September 1, 2005 to take a final decision on the proposal besides taking another six major and short-and-medium term policy decisions in respect of the energy sector.
The ECC meeting to be presided over by Prime Minister Shaukat Aziz would consider an agenda of at least 17 items that have piled up owing to engagements of ministers in the local body elections.
Informed sources told Dawn that heated debate would take place on wheat issue as the ministry of finance would strongly oppose a proposal of the food ministry to allow import of wheat for its re-export in the form of flour to Afghanistan.
The food ministry, on the request of flour mills, has propounded this proposed in order to utilize grinding capacity of local mills.
The finance ministry, however, feels that such a move would badly affect local wheat flour prices which have been stabilized through a painstaking exercise and supplies through utility stores. Also, it would drain foreign exchange reserves and increase already declining trade deficit while there would be no check whether imported wheat was being exported in the same quantity.
The ECC would also waive animal quarantine fee on import of live animals from India and other countries to reduce meat prices in the country through augmentation of supplies.
The meeting would also declare as special export processing zone (EPZ) the steel mills of Arabian investor Al-Tuwariqi Group in Karachi and approve supply of natural gas to Pakistan Textile City Limited at Port Qasim.
ENERGY SECTOR: The ECC is expected to take six major decisions. Advisor to the Prime Minister on Energy Mukhtar Ahmad would give a detailed presentation on “Analysis of Power Policy and Demand for period 2005-2010” and revise the policy parameters in many respects.
The ECC would also consider allocation of natural gas for power generation by captive power plants (CPPs) of the industrial units to reduce production cost to make industrial products competitive in the international market.
The meeting would review concession period for hydel power projects in the private sector. It would also consider allocation of natural gas to a fertilizer plant and two independent power producers (IPPs).
The ECC would take up the overall “Policy for Power Generation Projects 2002” and would provide federal government guarantees for hydel projects up to 50-mw to be implemented by the four provinces and AJK.
Under the policy, the provinces and AJK are responsible to develop up to 50-mw of hydel projects but they have been demanding of the federal government to extend sovereign guarantees to the foreign investors.
The ECC would also approve debt-equity swap for privatisation of Faisalabad Electric Supply Company (Fesco) and Jamshoro Electric Power Company (Jepco). The two companies have accumulated outstanding foreign loans over Rs12 billion - transferred to them as part of Wapda corporatisation - . These loans would be taken over by the federal government as equity to enable foreign investors and lenders to participate in their privatization.
The meeting would also consider imposition of export duty on raw hides and skins and wet blue leather besides allowing a couple of resident Pakistanis start equity-based investment abroad.
