ISLAMABAD, Nov 28: The government on Monday allowed sugar mills to generate 750mw power and approved policy guidelines for tariff determination of the independent power producers (IPPs), sale of Pakistan Steel Mill’s land and an incentive package for production of clean cotton.
The government took these decisions at a meeting of the Economic Coordination Committee (ECC) of the cabinet, presided over by Prime Minister Shaukat Aziz.
Dr Ashfaq Hasan Khan, economic adviser to the finance ministry, told Dawn after the meeting that the prime minister had briefed the ECC about the stand Islamabad had taken on farm subsidies given by the EU member countries and the United Sates.
The committee decided to convene a special one-point ECC meeting to prepare a consensus position of all the ministries for the forthcoming ministerial meeting of the World Trade Organisation (WTO) in Hong Kong.
NATIONAL POWER POLICY FOR SUGAR INDUSTRY: The ECC approved a national policy of power co-generation, under which 750mw electricity would be produced by the selected sugar mills from March 15 to Nov 15 by using bagasse (dry pulp) as fuel and there would be no gas supply during other months.
Dr Ashfaq said power generating units of the sugar mills would be considered as separate entities aimed at avoiding taxation ambiguities.
GUIDELINES ON TARIFF SETTING FOR IPPS: The ECC approved a summary of the water and power ministry envisaging policy guidelines for tariff determination for the IPPs by Nepra.
The policy promises to link the rate of return to investors to long term (10-year) Pakistan Investment Bond (PIBs) with a margin and interest rate to Karachi Interbank Offered Rate (Kibor) plus 300 basis points.
Mr Ashfaq said IPPs and different government departments had disputes over tariff issues. Now the dispute had been resolved once and for all.
STANDARDIZED CLEAN COTTON: The ECC approved in principle a clean cotton production plan along with financial incentives proposed by the ministerial committee on textile ministry. It constituted another committee to finalize modus operandi for the operation.
The secretaries of the textile industry, finance, commerce and Minfal and Trading Corporation of Pakistan (TCP) chairman would on the committee.
The ministry had proposed that the TCP should be allowed to procure 100,000 bales clean lint cotton from the ginners, for which the government would provide a credit line of Rs1.080 billion to the trading corporation.
The ministerial committee had also decided to Rs100 million as budgetary grant to the TCP for payment of Rs100 per 40 kg as premium for clean seed cotton (phutti) to the growers and suppliers.
SALE OF STEEL MILLS LAND: The ECC decided to give some additional land of the PSM to the new buyers for expansion purposes while the remaining land (2,000 acre) would be transferred to the National Industrial Park Development and Management Company (NIPDMC) at Rs3 million per acre for the developed and Rs1.5 million per acre for undeveloped land.
The sale price was finalized by Prime Minister Shaukat Aziz at a meeting with Minister for Industries Jahangir Khan Tareen and Finance Adviser Dr Salman Shah recently. The price for the onward sale of this land by the NIPDMC to the industrial sector would be determined later.
GRACE PERIOD FOR WIRELESS LOCAL LOOP: The ECC rejected a proposal of the ministry of information technology and telecom division regarding relaxation in payment of about half of the spectrum fee to seven WLL operators. The committee said any relaxation in fee would set wrong precedent.
BAN ON SHUTTERING WOOD: The ECC decided not to impose ban on exports of shuttering material to Afghanistan as demanded by the Sarhad Chamber of Commerce and Industry (SCCI) owing to fall in the export of matchboxes.
The ECC noted that inflation measured by sensitive price indicator had come down to 6.85 per cent at the week ending on Nov 24 against 9.24 per cent on week ending Oct 6.
It also observed that there was no impact of earthquake so far on prices situation.
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