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ISLAMABAD, Sept 1: The government on Thursday allowed the import of unlimited quantities of cement without any customs duty and withholding tax through the private sector to augment supplies for price stabilization in the domestic market.
The decision was taken by the Economic Coordination Committee (ECC) of the cabinet that also enhanced the concession period for hydel power projects from 25 years to 50 years. It also decided to provide federal guarantees for hydel power projects of below 50-mw capacity to be set up by the provincial governments and the AJK. Prime Minister Shaukat Aziz presided over the meeting.
Economic Adviser Dr Ashfaq Hassan Khan told Dawn after the meeting that the government had exhausted all possible means through negotiations with the cement manufacturers of reducing the cement prices to the level of June 9 — Rs259 per bag — but in vain and was fed up with their attitude.
He said the cement manufacturers insisted that the increase in price was because of excess demand, so the meeting decided to improve supply situation through duty- and tax-free imports by the private sector. “The importers can import any quantity and from anywhere,” he said. Likewise, big builders “can now import as much as they desired and from anywhere”.
He said the ECC also decided to allow import of clinker cement used for commercial purposes. However, committee comprising deputy chairman of Planning Commission, chairman of CBR and ministry of finance officials would submit in the next ECC meeting proposals about taxation.
WHEAT: The ECC rejected a proposal of the food ministry and flour mills to export wheat flour to Afghanistan through duty-free import of wheat due to strong opposition from the ministry of finance.
The meeting noted that such a move would increase domestic wheat flour prices and drain foreign exchange reserves.
PRICES: He said the ECC expressed satisfaction over the availability of essential commodities and stabilisation of prices. He said the sensitive price indicator (SPI) stood at eight per cent on week ending August 24 compared with 9.5 per cent on July 14. The prices of essential commodities like sugar and wheat have reduced or stabilized owing to sufficient supplies made available through various measures.
He said the meeting was informed that the government had allowed import of 250,000 tons of wheat through private sector and the first consignment of 50,000 tons of the commodity would reach Karachi on September 8 at a C&F cost of $150 per ton or Rs10 per kg.
Mr Khan said the sugar prices had also dropped by an average Re one per kg during the last few weeks. The ECC, he said, decided to auction 50,000 tons of sugar stocks in a manner that it was available to consumers at least two weeks ahead of Ramazan, starting early next month.
He said the commodity would be auctioned in the lots of 50 tons to 500 tons to ensure broad-based distribution. However, the sugar mills would not be allowed to participate in the auction.
Mr Khan said under the ECC decision, the prime minister would write letters to the chief ministers to ensure sufficient availability of essential items during the month of Ramazan to stabilize the prices and to take strict administrative action against hoarders.
He said the ECC took strong notice of the increase in meat prices, including beef and mutton, chicken and eggs and would be taking strict necessary measures in the next few days.
HIDES AND SKINS: Dr Ashfaq said the ECC imposed a 20 per cent duty on export of hides and skins to discourage raw exports and encourage and protect value addition in the leather sector for international competitiveness.
LIVE ANIMAL IMPORT: The ECC also withdrew quarantine charges of Rs100 per head on the import of live animals to reduce the prices of meat in the market.
CABINET COMMITTEE ON ENERGY: The ECC also decided to constitute a cabinet committee on energy for a coordinated approach on all energy issues instead of these being dealt at different forums. Now all policies on energy, including hydel and thermal power, coal, alternative energy sources, CNG, LNG, natural gas and oil would be formulated by this committee.
He said the prime minister would separately issue a notification about the composition of the committee and its exact terms and conditions.
NEPRA RESTRUCTURING: The ECC approved comprehensive restructuring of the National Electric Power Regulatory Authority (Nepra) and Private Power and Infrastructure Board (PPIB) to make them professional entities. He said private sector professionals and experts would be inducted in Nepra as members instead of retired bureaucrats representing provinces.
He said the modalities of the Nepra restructuring would also be announced by the prime minister shortly.
ENERGY SECURITY POLICY: He said the ECC also approved energy security policy prepared by the ministry of petroleum that liberalized gas supplies to the industrial sector.
Under the policy, top priority would be given to fertilizer sector in gas allocation followed by power sector and then other industrial sectors, he said. Similarly, strong emphasis would be put on exploration of oil and gas and a liquefied natural gas terminal would be set up in Karachi soon.
He said top priority had also been accorded to import of natural gas as a number of projects were now in an advanced stage. The meeting asked the petroleum ministry to make sure that at least one gas pipeline started delivering natural gas by 2009.
GAS FOR SELF GENERATION: The ECC decided to provide natural gas to the industrial sector for captive power projects of up to 50-mw for self consumption on as and where available basis. He said two-three industrial units could also jointly establish captive power plants for their consumption but they would not be allowed to sell their power to other units.
GAS FOR FERTILIZER/ POWER: The ECC directed the Sui Northern Gas Pipelines Limited (SNGPL) to market additional 100-mmcfd of natural gas from Qadirpur gas field for fertilizer plants and another 75-mmcfd of gas for two thermal power projects.
PAKISTAN RAILWAYS: The meeting also approved leasing out of two sleeper manufacturing factories of Pakistan Railways to the private sector with a buyback guarantee. This meant that PR would purchase the sleepers to be produced by the private sector but on a competitive basis with the international manufacturers.
PRIVATISATION: The ECC approved Rs5.769 billion debt-to-equity swap of Faisalabad Electric Supply Company (FESCO) and Jamshoro Power Generation Company (JAPCO) to enable their privatization. Mr Khan said the federal government will convert their Rs5.769 billion debt into equity but a committee comprising secretary finance, water and power and privatization would finalize its modalities.
EXPORT PROCESSING ZONE: The ECC also declared steel mill plants to be set up by Al-Tuwairiqi Group in Karachi as export processing zone.
CONTAMINATION-FREE COTTON: The meeting also approved in principle a plan for supply of contamination-free cotton and decided to start a campaign for the purpose.
