ECC okays Rs90bn payment to IPPs

Published May 6, 2021
Minister for Finance and Revenue Shaukat Tarin presided over the ECC meeting. — Photo courtesy Radio Pakistan
Minister for Finance and Revenue Shaukat Tarin presided over the ECC meeting. — Photo courtesy Radio Pakistan

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved payment of Rs90 billion to 35 independent power producers (IPPs). The ECC also decided to give a last chance to K-Electric (KE) for settling Rs212bn payments and inking an agreement for additional power intake from the national grid on timely payments.

The ECC meeting, presided over by Minister for Finance and Revenue Shaukat Tarin, also approved lowering taxes on Chinese investors of hydropower projects in Azad Jammu & Kashmir (AJK), exempting the import of oxygen and related equipment from duties and taxes besides an additional Rs27.5bn grant for disaster management schemes in Karachi.

Secretary Power gave a detailed briefing to the ECC regarding arrangement for providing additional power from the National Transmission & Despatch Company (NTDC) to KE since April 2020. He also raised the issue of non-payment for the additional power supply by KE to the Power Division.

Informed sources said the meeting was told that Rs212bn were payable by KE to the NTDC which operates the national grid. The Cabinet Committee on Energy (CCoE) had decided last year to provide 1,350-1,400MW additional power supply from the national grid to KE in a bid to address the citizens suffering amid prolonged power outages in Karachi.

K-Electric given last chance to settle Rs212bn dues for signing new pact for additional power

The NTDC has already started to supply a part of the additional power.

A few ministers objected that the citizens of Karachi would suffer for such a move for no crime of their own and that was an element that KE management had been exploiting through political means.

The ECC also took up a summary regarding the release of first installment (40 per cent) of payment to IPPs against total Rs403bn payables. The ECC approved payment of first installment to 35 IPPs out of total 47 and decided to withhold payment to the remaining 12 IPPs (under the Power Policy 2002) owing to the National Accountability Bureau investigation.

The ECC considered and approved the summary to facilitate swift processing of such projects due to its strategic importance by reducing withholding tax from 2.1pc to 1.4pc (tax discounts) on payments to Chinese (Offshore) supply contractors. China Three Gorges Corporation as main sponsor is developing the 1,124 MW Kohala Hydropower Project (KHCL) located on river Jhelum in AJK while China Gezhouba Group Company Limited as main sponsor developing 700MW Azad Pattan Hydropower Projects.

Duties exemption on oxygen cylinders

The ECC also approved a summary of the Ministry of Industries for exemption from duties and taxes for import of oxygen gas, oxygen gas cylinder and cryogenic tanks by oxygen concentrators, generators, manufacturing plants under respective Harmonised System (HS) codes for a period of 180 days to cope with the increased requirement of oxygen during the third wave of Covid-19 in the country.

The Ministry of Commerce presented a summary regarding implementation of United Nations Security Council Resolutions (UNSCRS) through export Policy Order, 2020 and Import Policy Order, 2020. The ECC considered and approved the summary.

The ECC also approved a summary of the Power Division regarding retargeting of power sector subsidies for electricity consumers during Phase-I in consultation with Ehsaas and Finance Division.

Supplementary grants

The ECC also approved a total of 14 supplementary grants worth Rs44.28bn including Rs1.8bn to National Disaster Management Authority (NDMA) for procurement of oxygen gas and delivery mechanism for import of 6,000 tonnes of oxygen to meet the emergency requirement for supply of oxygen to hospitals for treatment of Covid-19 patients.

Other approved grants included the Rs800m to the Ministry of Defence Production for the payment of outstanding loan to the National Bank of Pakistan (Bahrain), Rs8m for the Ministry of Information to clear the pending liabilities of “Implementation Tribunal for Newspaper Employees (ITNE)”, Rs571.216 to Ministry of Law for the construction of Islamabad High Court Building, Rs350m for a new building of the Supreme Court Branch Registry Karachi, Rs198.017m for running Isolation Hospital and Infections Treatment Center, Islamabad for treatment of Covid-19 patients, Rs48.337m for the Ministry of Parliamentary Affairs, Rs17.739m for the Geological Survey of Pakistan (GSP), Rs1.563bn for the Ministry of Federal Education and Technical Training for establishment & operation of Basic Education Community Schools, Rs1.2bn for the National Commission for Human Development (NCHD) for meeting various operating expenses and Rs100m for the Cabinet Secretariat for an endowment fund.

Published in Dawn, May 6th, 2021

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