• Provincial surplus ‘next to impossible’, Jhagra writes to Centre
• Miftah says will sit down with KP counterpart to resolve differences, hopes things will be settled before Fund’s board meeting
• Power users assured of relief in 24 hours
ISLAMABAD: The coalition government on Friday took exception to PTI’s “attempts to jeopardise the IMF loan programme” just days ahead of the Fund’s board meeting on Monday, with Finance Minister Miftah Ismail making an impassioned appeal to shun politics at a time when unprecedented floods have wreaked havoc on every nook and cranny of the country.
In a joint statement, the ruling parties criticised the Khyber Pakhtunkhwa government for “playing politics” after it allegedly refused to implement the terms of the IMF agreement in a letter as part of “a ploy to plunge Pakistan into a flood of economic crisis”.
The late-night statement was part of a series of events emerging out of the letter written on Friday by KP Finance Minister Taimur Khan Jhagra to his federal counterpart Miftah Ismail.
In the letter, Mr Jhagra informed Mr Ismail that his KP administration might find it difficult to run a provincial surplus this year in view of flood-related damages.
Ensuring surpluses by provinces this fiscal year is a key requirement previously agreed upon to revive the IMF programme.
Mr Jhagra said running a surplus would be “next to impossible” if the federal government didn’t resolve certain issues, such as budget allocations for ex-Fata, monthly transfers of net hydel profits as per agreed terms, immediately reviving the National Finance Commission award, etc.
Reacting to the letter in his second presser of the day late in the night, Finance Minister Ismail criticised what he called PTI’s “attempts to sabotage the IMF deal”.
Addressing the press conference alongside Information Minister Marriyum Aurangzeb, the finance minister said throwing a spanner in the works at this stage might destroy Pakistan’s economy.
He regretted that the PTI was “doing politics” at a time when rain-induced floods have affected millions of families across the country. “If you can’t stop politics even at this time, let the country go to default,” he thundered.
However, Mr Ismail hoped the matter would be settled when he meets Mr Jhagra on Monday. “Taimur Jhagra is an honourable man,” he said, adding the KP minister had told him that he hadn’t forwarded the letter to the IMF, an allegation earlier doing the rounds on the media. “I hope the IMF will approve the programme on Monday,” he said.
Mr Ismail also slammed PTI leaders and former ministers Fawad Chaudhry and Shaukat Tarin for suggesting that Punjab and KP governments would not cooperate with the federal government over the IMF programme.
Earlier in the press conference, Miftah Ismail said the government would provide 1.15 million flood-hit families with Rs25,000 cash assistance each in the next week.
Relief to power users
Meanwhile, the government announced on Friday that it would provide relief to the consumers using up to 200 units of electricity in 24 hours and constituted a high-level committee to address their complaints.
The announcement by the prime minister came following the severe countrywide criticism of his government’s decision to raise the power tariff multiplying the miseries of the masses.
In another press conference earlier in the day, Mr Ismail said decisions about the increase in electricity tariff as well as petroleum products were taken with the approval of the prime minister.
Prime Minister Shehbaz Sharif also directed the officials of power distribution companies (Discos) to work round the clock for correcting the bills. He directed that holidays of the Discos staff be cancelled for immediate completion of this task and a report in this regard be submitted to him.
Mr Sharif said banks should also be directed to remain open on holidays to receive the payment of electricity bills.
The correction of the bills of 16.6 million consumers is being done as per the relief given in the fuel price adjustment (FCA).
At the press conference, Miftah Ismail said the government was also weighing options to provide further relief to the people burdened by high electricity bills. The committee will deliberate what relief can be given to the power consumers using between 200 and 300 units per month, he added.
The finance minister said the increase in power tariff was in line with the conditions of the International Monetary Fund and expensive electricity generation combined with higher temperatures in May.
“Our anticipated charges were Rs6 per unit, but actual charges were around Rs100 because coal became very expensive and gas prices were the highest on record. May was very hot,” he said, adding that there was a day when the electricity demand rose beyond 30,000 megawatts.
“We generated 25,000MW which was the maximum we can. We have informed the IMF about the removal of FCA on those using less than 200 units,” the minister said, adding this would cost the national exchequer Rs20-21 billion.
The corrected bills will be sent to the consumers soon, while the amount already paid would be adjusted in the bill for the month of September.
The last date for the payment of bills is now Aug 31.
IMF bailout package
The finance minister said the IMF executive board would meet on the night between Aug 29 and 30 and approve the loan tranche for Pakistan. He said Pakistan had fulfilled all the requirements of IMF and would receive the next tranche after the board meeting.
He refuted rumours that the government was planning to sell Roosevelt Hotel in New York, which is owned by Pakistan International Airlines, or the airline itself, to Qatar. There have been no talks in this regard, he added.
The Gulf country was primarily interested in leasing Pakistan’s airports for long-term and managing them, constructing terminals at ports, LNG plants and large-scale solar farms, he said, adding that Qatar may also invest in the stock market.
The minister welcomed Qatar’s announcement of investing $3bn in Pakistan, saying that with this amount, Pakistan had collected $5bn in funding compared to the IMF’s demand of $4bn.
Responding to criticism by PML-N leader Abid Sher Ali for his “anti-people policies”, Mr Ismail said the country needed $40bn to deal with its current account deficit and debt repayments.
“I ask Abid Sher Ali and all my brothers to tell me of any decision I took that Shehbaz Sharif did not agree with. If the petroleum levy or FCA is imposed, it is done so with PM Shehbaz’s permission. It is easy to criticise me but everyone knows the facts,” he explained.
Published in Dawn, August 27th, 2022