ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday approved payment of Rs320 billion to public sector power plants and K-Electric within a few days through supplementary grants and started phasing out export finance scheme to meet a condition of the International Monetary Fund (IMF).

A meeting of the committee, presided over by caretaker Finance Minister Dr Shamshad Akhtar, also kept the minimum support price for wheat unchanged at Rs3,900 per 40kg and reprimanded the board of directors of Pakistan Steel Mills for mismanagement of huge assets of the mill, including tens of hundreds of acres of its land.

The ECC approved a summary of the Power Division for settlement of payables to government-owned power plants (GPPs) through a Rs262.075bn supplementary grant.

A senior Power Division official said the ECC was explained that it had sought clearance of Rs444.5bn past liabilities of GPPs in March 2022. The then ECC approved Rs182.465bn supplementary grant for payment to Pakistan Atomic Energy Commission (PAEC) for nuclear plants, the Water & Power Development Authority (Wapda) for hydropower plants and the National Power Parks Management Company (NPPMCL) for LNG-based power plants in line with similar mechanism for IPPs. The amounts were subsequently released in FY23.

Keeps wheat price steady at Rs3,900; slams PSM board for asset mismanagement

It said that for remaining dues of Rs262.075bn to these GPPs as outstanding as of Nov 11, 2020, it was proposed that an exercise be carried out for cash and non-cash settlement by ministries of finance, economic affairs and power.

The power division’s summary did not report what happened with the said exercise.

The ECC also approved another summary of the Ministry of Energy (Power Division) regarding the release of Rs57bn advanced subsidy for payment of K-Electric arrears and approved the technical supplementary grant to meet the operational requirements of the power sector.

Export finance

The ECC also decided to “initiate phase out of the Export Finance Scheme of the State Bank of Pakistan — a requirement of the $3bn Stand-By Arrangement with IMF”.

To operationalise this requirement, the ECC approved release of Rs3.87bn to Exim Bank for the current fiscal year.

While discussing a report on ECC’s decisions on PSM’s liabilities towards GoP, the finance minister directed the Ministry of Industries to carry out a “diagnostic survey to determine why liabilities of PSM persisted even though it had not been operational since 2015 and how PSM land had been allocated to housing companies and served other industries without due process”.

The statement said the “ECC showed its displeasure on PSM board and recommended that Industries Division may look into this issue for further necessary action”.

Published in Dawn, December 21st, 2023