ECC reduces take-or-pay commitment for RLNG plants

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved the proposal of the Power Division to fix the minimum take-or-pay commitment for three public sector regasified liquefied natural gas (RLNG) power plants at 33 per cent under the power purchase agreement (PPA) and gas supply agreement (GSA) to guard the interests of both buyers and suppliers.

The ECC also directed that a 50 per cent subsidy on imported urea will be shared by the provinces. Federal Minister for Finance and Revenue Ishaq Dar presided over the meeting.

The Petroleum Division tabled a summary on the change in take-or-pay commitment in the power purchase agreements and gas supply agreements of the three RLNG public sector power plants; Quaid-e-Azam Thermal Power Plant, Balloki Power Plant and Haveli Bahadur Shah Power Plant.

Further, the ECC allowed the fixation of gas supply deposit (GSD) under the GSA at a Rs15 billion/power project.

Sources in the Power Division said this decision has been taken mainly to facilitate the privatisation of these power plants.

Previously, these plants were bound to purchase 66 per cent of the liquefied natural gas (LNG) supply from the Sui Northern Gas Pipelines Limited (SNGPL) and the Sui Southern Gas Company (SSGC).

The finance minister had already indicated numerous times that the governments of the UAE and Saudi Arabia have shown interest in acquiring these RLNG power plants.

“Prime Minister Shehbaz Sharif in his upcoming visit to the UAE will take up this issue, as well, and will brief the UAE authorities about the removal of bottlenecks raised by them and convince them to acquire these plants as soon as possible,” he remarked.

The meeting also considered and approved a summary of the Ministry of Industries and Production on the revision of price of imported urea and allowed to fix the dealer transfer price (DTP) of 50kg imported urea at Rs2,340/bag by the National Fertiliser Marketing Limited (NFML) and provisionally approved incidental charges from the Karachi Port Trust (KPT) at Rs594/bag and from Gwadar at Rs1,008/bag, respectively, to bring stability in the urea prices in the market.

The ECC considered another summary of the Ministry of Industries and Production on the provision of funds to the Heavy Electrical Complex (HEC) to release the markup amount to the Bank of Khyber (BoK). After discussion, it approved the technical supplementary grant (TSG) amounting to Rs80.988 million to HEC for the payment to the Bank of Khyber as the markup amount for second, third and fourth quarters of the calendar year 2022.

The meeting also gave approval, in principle, to the provision of funds with the directives that the HEC transaction must be completed by February 15, 2023.

The Ministry of Railways submitted a summary on its business plan to generate a decent source of earning to improve its financial health through laying of fibre optic cable along its infrastructure.

The ECC constituted an inter-ministerial committee comprising federal secretaries of all the relevant divisions and headed by the federal minister for law and justice to prepare draft Right of Way Policy on the issue.

The ECC also approved a technical supplementary grant of Rs500 million in favour of the Ministry of Housing and Works for the execution of development scheme on the construction and rehabilitation of the flood-affected roads, in Muzaffargarh-I district.

Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Industries and Production Syed Murtaza Mahmud, Special Assistant to Prime Minister (SAPM) on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, federal secretaries and senior officers attended the meeting.

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