ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet is scheduled to meet here on Wednesday (today) to decide outstanding issues of K-Electric’s payables and receivables and National Security Certificate (NSC) for the power utility’s further sale to a Chinese firm besides the launch of second phase of Ehsaas Emergency Cash programme.

To be presided over by Finance Minister Shaukat Tarin, the ECC meeting would also take up exemption from minimum turnover tax under Special Economic Zones Act 2012, condone the delay of late shipment of vehicles imported by overseas Pakistanis and approve a number of supplementary grants including one for supply of natural gas to Allama Iqbal Industrial City Special Economic Zone.

The meeting will also take up a Rs100 million supplementary grant to Ministry of Defence Production for the project management cell for Gwadar Shipyard, Rs85million court fees in a case of Dr Hilal Hussain Al Tuwariqi and Al Ittefaq Steel Company Limited against the federation, besides additional funds for Ministry of Housing and Works.

Forum to also approve supplementary grants to different ministries

An inter-ministerial committee constituted by the ECC has already proposed de-linking the claims and counter claims of payables worth billions of rupees among the public sector companies, the federal and Sindh governments and the KE to facilitate about 1,400MW of additional power supply to Karachi.

The KES Power — the majority shareholder of the KE — had applied for the NSC in November 2016 for sale of the company’s 66.4pc shares to Shanghai Electric Limited of China. But the matter has been pending because of huge claims payable by the KE to the Sui Southern Gas Company (SSGC) and the National Transmission and Despatch Company and the KE’s receivables from the federal and Sindh governments on account of tariff differential subsidy and electricity bills, including legacy payables of the Karachi Water and Sewerage Board (KWSB).

Due to difference of opinion among various stakeholders on the terms of an amicable way forward on payables and receivables of the KE, the issue has remained unresolved till date. A draft arbitration agreement for settlement of pending payables and receivables issue has also been on the table for more than a year now. While the federal government and KE had been divided over the seat of arbitration, the Sindh government had been opposed to be part of arbitration proceedings that are required on account of KWSB bills carried forward at the time of privatisation of Karachi Electric Supply Company.

The KE had been demanding a principle of reciprocity in terms of equal treatment of mark ups payable by the government, the KE and the public sector companies to set off various amounts against each other but the public sector companies, particularly SSGC, had issues with such an arrangement and wanted treatment of late payment surcharge under the bilateral contract with the KE.

Published in Dawn, May 19th, 2021