ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Thursday allowed the Ministry of Commerce to start bilateral trade with India through the Wagah-Attari road link, a proposal that had been backed by President Asif Zardari and Indian Prime Minister Manmohan Singh during a meeting in New York last September.
The ECC also permitted the Ministry of Commerce to increase the number of items traded between the two countries from the present 1938 in a phased manner commensurate with parallel development of infrastructure on both sides of the border.
Sources told Dawn the ECC, which met under the Advisor to Prime Minister on Finance Shaukat Tarin here, also directed the Ministry of Petroleum to cut by half its demand of gas from the proposed Iran-Pakistan-India (IPI) pipeline project.
Pakistan’s share from the project is 1.05billion cubic feet a day (bcfd), which would now be reduced to 500 million cubic feet a day because of the refusal of Iranian authorities to reduce the rate of gas.
The meeting was told Iran was not willing to bring down its demanded price of gas that is 80 per cent of the crude oil price in the international market to 68-70 per cent of crude as requested by Pakistan.
The Iranian authorities had clearly told their Pakistani counterparts that Iran had been selling the same gas to Turkey at 85 per cent of the crude oil prices and that they had brought down their demand by 5 per cent after getting special approval from their Parliament. But, the price could not be slashed further.
Sources said Mr Tarin came hard on the petroleum ministry’s official for showing sluggishness in harnessing the country’s coal potential for power generation and waiting only for imported gas and furnace oil. They said the advisor asked the officials to reduce their demand of gas from IPI, which would be too expensive to be afforded by domestic or industrial sectors. The gas can only be used for power generation.
The ECC allowed the petroleum ministry to import used refineries which are not old beyond 15 years and have the capacity of purifying 110,000 barrel of oil a day to be installed in Balochistan. The ECC also allowed a tax holiday of seven years on such refineries.
The committee authorised the Federal Bureau of Revenue (FBR) to waive regulatory duty at the rate of 20 per cent on fried potato chips to be imported by international franchise food chains (IFFC) operating in the country.
A surveillance committee was constituted under the Federal Ministry of Food and Agriculture comprising representatives from relevant federal and provincial government organisations, local governments and concerned district coordination officers (DCOs) to control price hike at provincial and district levels.
The ECC reviewed key economic indicators (KEI) and overall price situation in the country and noted that overall consumer price index-based inflation has declined by 0.4 per cent during July 2008-February 2009. Foreign exchange reserves stood at $10.2 billion as on March 16 that included impact of the first tranche of the International Monitory Fund (IMF)’s approved financial package and other positive inflows. Inflationary pressures, the meeting was told, were likely to ease down in the next few months owing to sharp decline in commodity prices particularly petroleum products and palm oil.
Overall workers’ remittances during July 2008-February 2009 amounted to $4.918 billion showing an increase of 19.2 per cent. The ECC was informed that FBR had collected Rs702.5 billion during first eight months of the current financial year, posting an increase of 20 per cent over the same period of last year. Foreign Direct Investment (FDI) during (July-January, 2008-09) amounted to $2.587billion registering a healthy growth of 1.3 per cent compared with the same period of last year.
The committee also directed the Trading Corporation of Pakistan (TCP) to complete provision of required wheat tock to Sindh. It noted that existing sugar stock was reported to be around 2.553 million tones to supplement open market needs. It said 76 per cent of planned quantity of urea (570,007 million tones) had arrived whereas 24 per cent was due to reach at ports.
While reviewing the Ministry of Communication summary proposing leasing of right of way by the National Highways Authority (NHA) according to an approved leasing policy, the meeting directed the Communication Division to revisit the draft leasing policy, and constituted a Committee comprising Ministers for Information, Privatisation and representatives of Communication Division to technically/commercially examine the proposal and resubmit its recommendations to ECC for approval.
It deliberated on the Ministry of Petroleum’s summary seeking extension in Uch Gas Field Development and Production Lease earlier granted to the Oil and Gas Development Company (OGDCL) for a period of 25 years, and approved Uch-II Expansion Project for commitment of gas supply for 25 years from the start-up date in relaxation of Rule – 32 of Pakistan Petroleum Exploration and Production Rules – 1986. However, it advised the Petroleum and Natural Resources Division to seek prime minister’s approval for it as per the law.
The ECC considered the Ministry of Water and Power proposal for power transmission enhancement multi tranche facility project, based on an earlier agreement between the government and Asian Development Bank (ADB) seeking financing for a power transmission enhancement investment programme and approved ADB loans re-lending proposal to National Transmission and Dispatch Company (NTDC) at an interest rate of 12 per cent including exchange risk coverage.
A proposal of the Ministry of Finance for equity based investment abroad by resident Pakistanis comprising a request of M/s Educational Services Pvt Limited (ESL) to remit an amount of $17.5 million to its wholly-owned UK based subsidiary (ESL) titled New Silk Route UK was also approved.
The committee approval a food ministry proposal seeking government’s collaboration with M/s Monsanto USA in Bt Cotton Technology Transfer along with an action plan mutually agreed by all stakeholders. The food ministry was allowed enter into agreement Monsanto for implementation of a collaboration-based action plan that would lead to Bt. Cotton technology transfer.
