ECC to approve GIDC utilisation mechanism today

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The Economic Co-ordination Committee (ECC) of the Cabinet which is scheduled to meet on Friday (today) with Finance Minister Saleem Mandviwalla in the chair, will accord approval to the mechanism for utilisation of Gas Infrastructure Development Cess (GIDC) created mainly to fund Iran-Pakistan Gas Pipeline Project (IP) and Turkmenistan-Afghanistan-Pakistan-India (TAPI), official sources told Business Recorder. The sources said National Assembly approved the Gas Infrastructure Development Cess Act, 2011 on November 25 2011, which received the assent of the President on December 13, 2011 and was published in the gazette of Pakistan, Subsequently, the GIDC Act, 2011 was amended through Finance Act, 2012 which substituted the Second Schedule attached thereto providing revised rates of cess applicable for various sectors/categories of gas consumers.

The revised second schedule is as follows: Fertilizer - feed stock (except for the Fertilizer plants having fixed price contracts) Rs 300/MMBTU; Compressed Natural Gas (CNG) Region-I KPK, Balochistan & Potohar Region (Rawalpindi, Islamabad and Gujjar Khan) Rs 300/MMBTU; Region-II Sindh & Punjab (excluding Potohar Region) Rs 200/MMBTU; Industrial (including captive power and Fertilizer fuel stock) Rs 100/MMBTU; WAPDA/KESC/ Gencos Rs 100/MMBTU; Independent Power Plants (IPPs) Rs 100/MMBTU; commercial - ; domestic - ; cement - ; Liberty Power Plant - Rs 100.

According to sources, 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. With a view to evolving a mechanism for utilisation of cess receipt/revenues, procedure/rules have been developed. Following salient features of the procedure/rules are notable: (i) a high powered project review board headed by Finance Minister, including Minister for Petroleum and Natural Resources, Deputy Chairman Planning Commission, Secretary Finance and Secretary Petroleum and Natural Resources will review the projects proposed by Ministry of Petroleum and Natural Resources which are duly qualified for funding from Gas Infrastructure Development Cess and accord its approval for utilising funds from GIDC; (ii) in case of infrastructure development of Iran Pakistan Pipeline Project(IP) and TAPI Pipeline Project, the requirements of fund, as approved in the financing plan of projects by the competent forum, will be transferred to an Assignment Account opened by Inter State Gas System (ISGS) on a demand raised by the company through Ministry of Petroleum and Natural Resources to the Finance Division; (iii) in case of infrastructure development or system augmentation of gas utility companies for RLNG transportation, the, requirements of fund, as approved in the financing plan of projects approved by the competent forum, will be transferred to respective gas utility company on a demand raised by the respective company through Ministry of Petroleum and Natural Resources to the Finance Division; (iv) in case of utilising of funds for price equalisation of other imported alternate fuels based on recommendations of high powered project review board, the ECC will be the competent forum for approving the utilisation for the aid objective; and (v) proper accounts will be maintained and audit will be done for the funds used under various projects as per standard government instructions in this regard. Expenditure reports will be submitted to the high powered project review board on quarterly basis. The board may also require additional information related to projects, as and when it may so desire which shall be arranged by Ministry of Petroleum and Natural Resources through respective project executing companies.

Courtesy: Business Recorder


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