Surrender forex in interbank market: ECC approves cash incentive to ECs
ISLAMABAD: A meeting of the Economic Coordination Committee (ECC) of the Cabinet has approved fiscal incentive of Re1 against each US dollar to Exchange Companies against surrender of foreign exchange in the interbank market.
The meeting of the ECC presided over by Finance Minister Shaukat Tarin was submitted the State Bank of Pakistan (SBP) proposal with regard to providing cash incentives of Re1 against surrender of each US dollar mobilised from inward remittances.
The meeting was informed that ECs are required to surrender 100 percent of inward remittances in the interbank market.
The ECC approved the proposal with the direction to review the model to achieve further improvement.
The ECC also approved the Ministry of Energy, Petroleum Division for issuance of sovereign guarantee amounting to Rs24,188 million in favour of M/s Habib Metropolitan Bank Ltd and a syndicate of two banks led by the United Bank Limited (UBL) for the remaining tenor of the loan and letter of comfort in favour of lender banks for new financing agreement with respect to pipeline infrastructure development project LNG-II.
The meeting approved the proposal of Aviation Division for re-rolling of principal amount i.e. US$ 142 million along with mark-up payments by the National Bank of Pakistan (NBP) for further two years ending on 31st December, 2024, after it was informed that Roosevelt Hotel, New York was facing financial challenges.
The meeting directed Aviation Division to prepare a roadmap for the permanent solution of the issue.
The ECC discussed and approved Naya Pakistan Housing Development Authority (NAPHDA)’s proposal for revision of customer pricing and mark-up subsidy period under Tier-I of government mark-up subsidy scheme for low-cost housing and inclusion of Housing Finance Companies (HFCs) in G-MSS for housing finance with the directions that there should be no direct involvement by the commercial banks in the NAPHDA projects.
The ECC also approved a summary submitted by the Ministry of Communication for extension in the timeline given to the National Highways Authority (NHA) for preparation of commercially-viable business plan till June, 2022 with the same conditions regarding cash development loans (CDL) as decided by the federal cabinet.
The NHA’s debt restricting would be linked with the outcome of the business plan.
The ECC also directed the Ministry of Communication to submit a monthly progress report regularly and prepare a business plan well before the deadline.
The ECC also approved the proposal of the Ministry of Communication for special allocation of additional funds of Rs8,000 million (Rs4,000 million as upfront viability gap funding (VGF) and Rs4,000 million for overhead costs) against approved GoP’s share for the PSDP project titled, “Sialkot (Sambrial)–Kharian Motorway Project (SKMP).
The ECC discussed and approved the summary tabled by Ministry of Industries and Production regarding gas rate for operations of the SNGPL based plants i.e. Fatima Fertilizer (Sheikhupura plant) and Agritech for the period October 2021 to January 2022, and to keep at Rs839/MMBTU (with variable contribution margin @186/bag).
The ECC also approved a summary submitted by the National Engineering and Scientific Commission for issuance of the government’s sovereign guarantee for the NECOP project worth US$ 5,822,025 for batch-IV and US$ 26,154,058 for batch –V in favour of CETC, Beijing, China to pay back loan in seven years, including two- year grace time.
The ECC considered and approved the summary submitted by the Ministry of Maritime Affairs for grant of relaxation to the PNSC’s 19 subsidiary companies from the applicability of the Public Sector Companies (Corporate Governance Rules).
The ECC approved, in principle, summary tabled by the Ministry of Economic Affairs on Global Transition from LIBOR to alternate reference rates with the directions that reference rates to be adopted in future may be submitted to ECC for approval.
The ECC discussed in details the summary presented by the Ministry of Industries and Production for price revision of non-subsidised goods and continuation of untargeted subsidy after 31st December 2021.
After deliberation, the ECC allowed the Ministry of Industries and Production continuation of subsidy on the five essential commodities for only one month January 2022.
The ECC approved Technical Supplementary Grant worth of Rs90 million for 1.2 MGD reverse Osmosis desalination (ROD) Plant at Gwadar (Chinese Grant), TSG of Rs14.621 million for purchase of spare parts for helicopter maintained by Pakistan Rangers, Sindh as well as TSG for release of funds Rs431.880 million to project implementation letter of HQ Frontier Corps (South) KP, Dera Ismail Khan funded by the Bureau of International Narcotics and Law Enforcement–Pakistan (INL-P), and Rs751.486 million in favour of the Ministry of Energy, Power Division, out of development expenditure of the Ministry of Planning, Development and Special Initiatives.
On a summary for provision of funds for life saving drugs to Afghan people, presented by the Ministry of National Health Services, Regulations and Coordination, the committee advised the Ministry of National Health Services, Regulations and Coordination to review its budget and demand be met by re-appropriation of funds within the budget.
Copyright Business Recorder, 2022