ECC approves issuance of $500mln Eurobonds for dams

ISLAMABAD: Economic Coordination Committee (ECC) of the cabinet on Thursday approved issuance of $500 million Eurobonds to finance construction of Diamer Basha and Mohmand dams and Karachi transformation plan.

Ministry of water resources presented a summary for issuance of the Water and Power Development Authority’s (Wapda) debut $500 million Eurobonds to arrange finances for Diamer Basha and Mohmand dams. Diamer-Basha dam is estimated to cost Rs442 billion, while Mohamand dam has an estimated cost of Rs310 billion. Construction contracts have already been awarded to two separate consortiums of Chinese and Pakistani firms.

The ECC approved the issuance, in principle, and directed the ministry to work out modalities in consultation with the finance division and the State Bank of Pakistan.

Ministry of planning, development and special initiatives presented a detailed presentation on Karachi Transformation Plan before the ECC. The forum discussed the plan thoroughly and endorsed, in principle, with the direction to secure approval from all relevant quarters before submission to cabinet. The planning ministry was directed to follow all codal formalities with reference to various components of Karachi Transformation Plan. Minister for Finance and Revenue Hafeez Sheikh chaired the meeting.

Ministry of maritime affairs presented amendments in the master plan, originally formulated in 2001, regarding establishment of five terminals on build-operate-transfer basis. These terminals would fulfill increased demand for container handling capacity.

The ECC approved amendments in the master plan for establishing the terminals, including two liquefied natural gas (LNG) terminals, two multipurpose cargo terminals and one integrated container terminal.

A detailed summary was placed by the ministry of energy (petroleum division) regarding shelving the LNG air mix projects by Sui companies. Sui Northern Gas Pipelines Limited may abandon the three projects namely Drosh, Ayun and Chitral Town and dispose the land and equipment with minimal loss possible through an open transparent process.

Ministry of energy also presented a summary regarding repayment of Government Holdings (Pvt) Limited (GHPL) loan and future funding requirements for expenditure in relation to Inter-state Gas Systems (ISGS) gas import and infrastructure projects.

GHPL funded all the expenses of ISGSL through medium term loan as per ECC’s earlier decision last week. Various proposals were presented before the forum. The ECC approved the proposals in principle subject to clearance by the high power board.

The ECC also approved the summary by the ministry of industries and production regarding duty and tax free import of cryogenic oxygen tanks for better handling of COVID-19 situation. The duty free import of cryogenic tanks would ensure uninterrupted supply of oxygen gas at competitive rates.

ECC also approved the change in the shareholding structure of the Pakistan Credit Guarantee Company (PCGC). According to the new structure, the shareholding of the government in the company has been reduced to 49 percent from the earlier 70 percent. Any dividends announced by PCGC against shares held by the State Bank of Pakistan or any proceeds from the sale of shares in PCGC, held by the SBP, will be remitted in the government treasury.

The committee also approved technical supplementary grants of Rs757 million for the completion of different projects under sustainable goals achievement program, Rs500 million for the reimbursement of fee for less developed areas as requested by the Higher Education Commission, Rs500 million for the ministry of housing and works to provide interest free loans to borrowers, Rs4.1 billion for the execution of development schemes for Sindh and Balochistan provinces, Rs327 million for Auditor General of Pakistan to sustain the World Bank’s public financial management and accountability service delivery project during FY2021.