ECC allows Pakistan to raise Rs200b from Islamic Banks

The Economic Coordination Committee of the Cabinet (ECC) in Pakistan allowed the raising of Rs200 billion on the request of Ministry of Energy (Power Division) from the Islamic banks.

The amount will be utilised for the purpose of funding the repayment liabilities of the distribution companies (DISCOs).

The Economic Coordination Committee of the Cabinet approved the proposed mechanism by the Ministry of Finance for the grant of Sovereign guarantees. All requests for government guarantees are to be accompanied by request for guarantee by the governing body of PSE’s.

ECC allowed the fund raising from the Islamic Banks as fresh facility through Power Holding Limited by way of issuance of Pakistan Energy Sukuk-II against assets of the DISCOs/GENCOs as collateral through open competitive bidding to procure financing in a fair and transparent manner.

A meeting of the Economic Coordination Committee of the Cabinet (ECC) chaired by Adviser to the Prime Minister on Finance and Revenue, Dr Abdul Hafeez Shaikh has allowed import of 0.3 million tonnes of wheat to decrease the local wheat price and meet the domestic requirement.

Under the decision, the wheat would be imported by the private sector by withdrawing regulatory duty to the extent of the approved quantity, says an official statement Monday.

The ECC further decided that the wheat to be imported under the ECC decision would be allowed in the country until 31st March 2020 to ensure that the local wheat to be available from the start of April was picked up at the right price from the market.

The Economic Coordination Committee of the Cabinet (ECC) also issued instruction for the immediate release of stocks held by the Pakistan Agricultural Storage and Services Corporation (PASSCO) and the provincial departments.

Besides the import of wheat, the ECC approved a proposal by the Ministry of Industries and Production to reduce the GIDC on gas consumed by the fertilizer manufacturers from Rs 405 to Rs 5 per bag so that this benefit could be passed on to the farmers.

Wheat flour crisis has taken Pakistan by surprise as the unprecedented hike in the commodity has presented dire situations for the general public, while the government on Monday decided to import 300,000 tonnes of wheat without regulatory duty to relieve a shortage of flour supplies.

In Lahore, people are forced to buy flour at highest-ever price of up to Rs70 per kg, and the growers are holding the flour mill owners and the government responsible for the “Aatta crisis”.

In Faisalabad, the flour prices have skyrocketed with an increase of up to Rs30 per kg as wheat supply to mills has been suspended.

After failure in negotiations with the provincial Khyber Pakhtunkhwa (KP) government, the nanbais went on strike in Peshawar and Hazara on Monday.

Further: Every request must be reviewed and endorsed by the concerned Administrative Ministry/Department of the relevant entity; Audited Financial statements of previous year prior to issuance of guarantee is mandatory for evaluation of guarantee request; Business plan including an explanation of the business model and financial projections for at least 5 years;

A note explaining the following; Whether its need for guarantee is short term or long term; Business model followed by the entity since inception or over the last 5 years, whichever is less; Financial as well as non-financial performance of the entity since its inception or over the last five years, whichever is less; and Request, along with justification, for the type and amount of guarantee needed by the entity and the timelines over which it is required.

The Finance Division shall evaluate the request internally and finalise its recommendations with the approval of the Finance Secretary.

ECC also approved the report on proposed exemption of 5 per cent sales tax on cotton seed cake. It was briefed to the ECC that in case the exemption of sales tax on Cotton Seed Cake cannot be introduced during CFY 2019-20, the same can be considered for inclusion in the Finance Bill of 2020-2021.

The approval of Technical Supplementary Grant of Rs 96.652 million of National Book Foundation in favor of Ministry of Federal Education and Professional Training was also granted by ECC.

Technical Supplementary Grant amounting to Rs 15 million for centralised procurement of ICT infrastructure to ensure e-readiness of Federal Government for implementation of E-Governance programme was also approved.

Agencies