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June 20, 2019

Govt to balance unpaid claims of Discos with outstanding loans


June 20, 2019

ISLAMABAD: The government on Wednesday decided to adjust an estimated Rs86 billion worth of unpaid industrial support package claims of power distribution companies with their outstanding loans.

The decision was taken at a meeting of the Economic Coordination Committee (ECC) presided over by Adviser to the Prime Minister on Finance, Revenue and Economic Affairs Hafeez Shaikh.

The ECC further directed the officials to recommend measures to settle approximately Rs30 billion of industrial support package claims of the privately-held K-Electric

The power division of the ministry energy briefed the committee about cash and non-cash settlement for the power sector. “The ECC resolved the issue of industrial support package (ISP) by adjusting it against the loans receivable from power sector entities,” the finance ministry said in a statement. The ECC formed a committee, comprising of senior representatives from power, finance and economic affairs divisions, to address the issue of ISP.

“Regarding K-Electric, the committee directed that the ISP claim of K-Electric, amounting to approximately Rs30 billion, may be looked into and solid recommendations be made,” the finance ministry added.

According to an estimate, pending ISP claims of discos and K-Electric have surpassed Rs115 billion since July 2017. The claims are surging as the newly-elected government continued the policy of providing financial assistances to industrial consumers on their electricity bills during an ECC meeting in October last year, according to a summary of the power division. The government had decided to continue with Rs3/unit of electricity tariff to industrial consumers.

Financing of industrial support package has been an unresolved issue for long with the power division opposing its financing through recovery in losses. The energy ministry has always been vocal in funding the government’s subsidy to industrial consumers through budgetary allocation.

The ECC also resolved the long standing issue with regard to payment of subsidised power supply to Jammu and Kashmir by way of cash and non-cash settlement with no financial impact on the area.

Hashim Popalzai, secretary of the ministry of national food security and research updated the meeting about the availability of wheat stocks in the country. Food ministry proposed the government to impose ban on wheat exports despite surplus inventory of the staple food.

Popalzai said wheat stock of 28 million tons is available in the country compared to the total national requirement of 25.84 million tons. The ECC constituted a committee to make its recommendations on the proposal.

The Economic Coordination Committee further approved, in principle, the proposal of ministry of maritime affairs to provide tax relief on import of ships in order to revive and strengthen the shipping sector of Pakistan. The committee directed the maritime ministry to make substantial changes to the proposals before submitting them to the cabinet for final approval.

The committee also approved technical supplementary and supplementary grants for different ministries/divisions.

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