ISLAMABAD: Three weeks ahead of the close of fiscal year, the government went on a sanctioning spree on Monday giving the nod to record one and half a dozen supplementary grants of more than Rs434 billion and fixed the prices of 49 new essential drugs.

The decisions were taken at a meeting of the Economic Coordination Committee (ECC) of the cabinet, which also allowed the issuance of Rs9.5bn in sovereign guarantee to the contractors of Rs307bn Hyderabad-Sukkur Motorway, besides creation of a battalion of Pakistan Coast Guards.

The meeting, presided over by Finance Minister Ishaq Dar, also granted Rs12bn for the National Disaster Management Authority (NDMA) to replenish its stock of relief goods.

The biggest supplementary grant of Rs402.251bn was approved on the request of Economic Advisory Division (EAD) for debt servicing of foreign loans and credits on account of rollover of $7bn of China Safe Deposit and Saudi Time Deposit and exchange loss on account of currency depreciation.

ECC fixes prices of 49 new medicines; Rs402bn sanctioned for debt servicing, credits

The meeting was informed that budget estimates for debt servicing for the current fiscal year at the time of budget formulation was taken at Rs186 per dollar whereas actual payments had to be made at an average exchange rate of Rs235 per dollar.

The EAD requested that as debt repayments were obligatory, a technical supplementary grant of Rs402bn be approved against about Rs804bn savings that accrued owing to rollover of loans and credits by China and Saudi Arabia, but about half of those savings were lost to currency depreciation.

The meeting was told that EAD had secured budgetary allocations for foreign debt servicing at Rs4.446 trillion for the current fiscal year which had now been revised to Rs4.044tr because it did not have to repay above loans.

The ECC also approved a summary of Ministry of Communications for issuance of the GoP’s guarantee amounting to Rs9.5bn for the construction of Hyderabad-Sukkur motorway on the build-operate-transfer (BOT) basis.

In July, the government had approved the construction of 306km motorway at an estimated cost of Rs308.2bn without any foreign assistance on the BOT basis in public-private partnership. The GoP was required to share Rs10.3bn as viability gap funding, and the concessionaire — a joint venture led by Techno Engineering and comprising Cooperative Muratori Cementisti and Associated Consultancy Centre — was to fund Rs307.394bn with an equity of Rs89.368bn and Rs208.525bn debt. Therefore, the ECC approved the Rs9.5bn guarantee to the National Highway for the comfort of commercial lenders of the project.

The ECC accepted a Rs12bn demand of the NDMA for procurement of relief items to restock or replenish its reserves to be better prepared to respond to any impending disaster.

The committee approved a summary of the Ministry of National Health Services for fixing of maximum retail prices of 49 new drugs on the basis of being lower as compared to their prices in the neighboring countries. These drugs are being introduced in Pakistan for the first time.

The ECC approved another supplementary grant of Rs9.145bn to Power Division for the execution of 2x660MW coal-fired power project at Jamshoro. The project was approved in 2014 and in almost a decade only one unit has achieved 90pc progress with its commercial operations expected to start in November this year.

A supplementary grant of Rs700 million against a demand of Rs2.8bn was approved to the Ministry of Information to meet a shortfall of Rs450m being faced by state-run APP and about Rs2.343bn to Radio Pakistan to meet expenditures for salaries, pensions and artists’ remunerations.

An amount of Rs5.252bn was approved as supplementary grant to Ministry of Defence for meeting shortfall in employees-related expenditures (ERE), Survey of Pakistan, Pakistan Maritime Security Agency and educational institutions in cantonments and garrisons.

Published in Dawn, June 6th, 2023

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