ECC approves mechanism for utilisation of GIDC

Attention: open in a new window. PDFPrintE-mail

ISLAMABAD - The Economic Coordination Committee (ECC) of the Cabinet on Friday approved mechanism for utilization of gas infrastructure development cess (GIDC) that was created mainly to fund the Iran-Pakistan gas pipeline project and Turkmenistan-Afghanistan-Pakistan-India (TAPI) project. The ECC met here under the chairmanship of Federal Minister for Finance and Economic Affairs, Senator Saleem H Mandviwalla.  The ECC approved mechanism/procedure/rules for utilization of gas infrastructure development cess. Under the rules, a high powered Project Review Board headed by Finance Minister has been constituted to review the projects, proposed by Ministry of Petroleum and Natural Resources, which are duly qualified for funding under gas infrastructure development cess. The Project Review Board will include Minister for Petroleum and Natural Resources, Deputy Chairman Planning Commission, Secretary Finance and Secretary Petroleum and Natural Resources as its members.

According to the reports, the proceeds from GIDC are being deposited/credited in Federal Consolidated Funds (Account-1) under a sub-account No 003916 allotted by Controller General of Accounts. According to section 4 of the GIDC Act, 2011, the proceeds of cess will have to be used for a specific purpose as enumerated under section 4 which reads ‘the cess shall be utilised for or in connection with infrastructure development of Iran Pakistan Pipeline Project, Turkmenistan Afghanistan Pakistan India (TAPI) Pipeline Project, LNG or other projects or for price equalisation of other imported alternative fuels including LPG.

The ECC approved provision of a $700 million sovereign guarantee for Sindh Engro Coal Mining Company (SECMC), a joint venture between the Government of Sindh and Engro Corporation, with the following conditions: 1) That the majority share holding in the project sponsoring company shall be held by the government. In case of SECMC, the sovereign guarantee may be issued once such a majority shareholding has been affected in favour of the government. The Sind Government will be responsible for the primary obligations against this sovereign guarantee. 2) That the maximum limit of such a guarantee shall not exceed $ 700 million. Term Sheet shall be as agreed by the Finance Division.

On a summary by Ministry of Industries, ECC approved M/s Engro’s existing Mari Gas allocation to be reallocated to SNGPL for onward supply to Engro’s new energy efficient plant on a dedicated basis which may be supplied under existing SNGPL contract with all terms and conditions staying unchanged.

The ECC approved a proposal from Ministry of Industries for import of a total of 0.130 million tons of urea by Trading Corporation of Pakistan from the international market to meet the fertilizer requirements for Kharif Season 2013.

ECC also approved acquisition and rehabilitation of DHA Cogen Ltd. (Power & Desalination Plant) by International Electric Power (IEP). The ECC was informed that Sui Southern Gas Company Limited entered into a general sale agreement (GSA) with DHA Cogen for allocation of 17.5 MMCFD gas upto 2015. The ECC also approved extension of the GSA from 2015 to 2030 in accordance with the terms agreed between SSGC & IEP.

The ECC approved extending deadline of June 2014 for meeting Euro-II Specification up to December 31st2015 with the condition of meeting the requirements of the Finance Division to ensure up-gradation of refineries. This will allow refineries to adopt the option for meeting Euro-II quality via a combination of upgrading and treating facilities.

The ECC also approved issuance of policy guidelines to OGRA for relaxation of the moratorium on new development schemes while advising it to allow the additional amount of Rs.5,558 million in respect of distribution development programme during the financial year 2012-13.

The ECC approved, in principle, initiation of the process of unbundling of gas utility companies. As a first step consultants will be inducted to undertake the assignment as per given TORs and the report will be submitted for consultation and approval to the Council of Common Interest.

The ECC in principle approved the revised model petroleum concession agreement subject to its concurrence/approval by all the provinces.

The ECC approved enhancement of government’s guarantee from Rs.2 billion to Rs.3.165 billion for Pakistan Textile City Limited at Port Qasim Karachi. ECC was informed that the Textile City is at an advanced stage of completion and requires necessary support to complete its development works. The approval was granted on the conditions that a realistic business plan and final power supply agreement with KESC will be submitted to the Ministry of Textile Industries and Finance Division.


Courtesy: The Nation

Forex open Market rates & comments Archive

Login Form