ECC approves Rs90 billion payment to 35 IPPs

May 06, 2021

ISLAMABAD: The Economic Coordination Committee of the Cabinet on Wednesday approved Rs90 billion as the first installment of outstanding payments to 35 independent power producers and withheld...

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ISLAMABAD: The Economic Coordination Committee of the Cabinet (ECC) on Wednesday approved Rs90 billion as the first installment of outstanding payments to 35 independent power producers (IPPs) and withheld disbursal for 12 IPPs under the NAB investigation.

The ECC also approved targeted subsidies mechanism for power sector in principle and directed to finalize modalities to link it with Ehsaas program.

When asked about the possibility of $1.5 billion program approval from the World Bank till end June 2021, Minister for Finance Shaukat Tarin said the power tariff could not be hiked but the targeted subsidies were approved because it was prior action of WB’s loan program. Tarin said the power tariff could not be increased and the WB’s high-ups are empathetic about it.

The power division presented a summary before the ECC regarding release of first installment of payment to IPPs. The committee was briefed about the recommendations of the sub-committee constituted during ECC last week. The ECC approved payment of first installment to 35 IPPs out of total 47 whereas payment to the remaining 12 IPPs (under Power Policy 2002) may be withheld owing to the NAB investigation.

The meeting was told the issue of non-payment for the additional power supply by K-Electric to power division. After detailed discussion, the ECC constituted a sub-committee to be headed by the finance minister to negotiate with the Karachi Electric for settlement of payment dispute amicably.

Power division placed a summary before the ECC regarding tax on payments to the offshore supply contractors of independent power producers located in Jammu and Kashmir. The ECC considered and approved the summary to facilitate swift processing of such projects due to its strategic importance.

The ECC considered and approved a summary tabled by the ministry of industries and production regarding exemption from duties and taxes for import of oxygen gas, oxygen gas cylinder and cryogenic tanks by oxygen concentrators / generators / manufacturing plants under respective harmonized system 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.

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

Lastly, power division presented a summary before the committee regarding retargeting of power sector subsidies for electricity consumers during phase-i in consultation with Ehsaas and finance division. The ECC approved the summary, in principle, with a direction to work out modalities for future course of action.

ECC approved technical supplementary grants Rs1.8 billion for the National Disaster Management Authority for procurement of oxygen gas, Rs10 billion for the finance division for re-imbursement of telegraphic transfer charges to the banks on home remittances, Rs115 million for the ministry of defence for the up-gradation of health care facilities at Cantonment General Hospital, Rawalpindi, Rs800 million to the ministry of defence production for the payment of outstanding loan to the National Bank of Pakistan (Bahrain), and Rs8 million for the ministry of information and broadcasting to clear the pending liabilities of implementation tribunal for newspaper employees.

The committee further approved technical supplementary grants of Rs571.2 million for the ministry of law and justice for the construction of Islamabad High Court Building, Rs350 million for the ministry of law and justice for a new building of the Supreme Court Branch Registry Karachi, Rs198 million for running Isolation Hospital and Infections Treatment Center, Islamabad, Rs27.5 billion for National Disaster Management Fund to complete NDMA’s component under Karachi transformation plan, Rs48.3 million for the ministry of parliamentary affairs for meeting its various operational expenses, Rs17.7 million for the geological survey of Pakistan, Rs1.5 billion for the ministry of federal education and technical training for establishment & operation of basic education community schools., Rs1.2 billion for the National Commission for Human Development, Rs100 million for the cabinet secretariat.



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