ECC defers PIA’s Rs96bln payables to CAA

ISLAMABAD: Government on Wednesday allowed state-owned ailing Pakistan International Airlines (PIA) to temporarily hold up around Rs96 billion in payments the airline owe to the Civil Aviation Authority (CAA) on account of aeronautical charges and other levies, sources said on Wednesday.

The sources said the Economic Coordination Committee (ECC) of the cabinet took the decision during a meeting presided over by Finance Minister Asad Umar.

They said the committee decided to freeze the dues of the PIA demanded by the CAA till June 30. ECC also approved $3 million (around Rs420 million) for repair and overhauling of the airline’s fleet. PIA’s Chief Executive Officer Arshad Malik earlier asked the government to give the airline a relief from payment of Rs95 billion and late penalty to the CAA till the loss-making PIA comes out of its dire financial straits.

The committee further approved a proposal of ministry of industries and production to allocate 66 million metric cubic feet/day additional Mari deep gas to Private Power and Infrastructure Board – a state-owned facilitator to promote private investment in power sector – for power generation purposes.

Mari Petroleum Company, a joint venture of government and Fauji Foundation, intended to set up a 180 megawatts combined-cycle thermal power plant in Daharki on fuel supply from its gas field. The ECC, in the previous meeting, refused the proposal on the ground that gas should first be supplied to fertiliser companies. The exploration and production firm defended its rights of gas supply for electricity generation under Power Generation Policy 2015 that stipulates gas with low British thermal unit to power plants.

The ECC was further briefed by the water resource division on the proposed arrangement for settling the electricity tariff and water usage charges issues with Kashmir. Secretary Shamail Ahmad Khawaja of Water Resource Division said a detailed arrangement covering all aspects of the issue was worked out in consultation with the government of Kashmir. Under the new arrangement, it would be given a dispensation similar to the provinces.

The committee said Kashmir would set up its own power distribution company under the proposed arrangement and it would receive water usage charges at the enhanced rate of Rs1.10/kilowatt hour, which is based on the principle of equality.

Ministry of national food security and research briefed the committee on the implementation status of decision taken by the committee last month for improvement of cotton crop in the country. The committee approved the proposal of ministry of national food security and research to extend the export period of surplus wheat from Pakistan Agricultural Storage and Services Corporation’s stock. 

The ECC approved supplementary grant of Rs156.327 million for ministry of health services, regulation and coordination and Rs41.671 million for ministry of overseas Pakistanis and human resource development. It also approved the demand of cabinet division to release technical supplementary grant of Rs14.844 million.