Apart from approving Rs960 million for payment of two months salaries to the workers of Pakistan Steel Mills (PSM) on urgent basis, the Economic Coordination Committee of the Cabinet on Saturday also approved issuance of Rs40 billion sovereign guarantee for power sector.

The ECC, which met under the chair of Finance Minister Ishaq Dar, has approved a proposal of Ministry of Water and Power regarding issuance of sovereign guarantee by Finance Ministry for Rs 40 billion Syndicated Term Finance Facility for power sector. The loan had been arranged on behalf of power distribution companies by Power Holding (Pvt) Limited from consortium of local commercial banks. The Ministry of Water and Power had sought amount, as the power sector is facing serious fiscal problems due to low recoveries and high line losses subsequent to failure by the relevant ministry to improve transmission, distribution, and administration losses of distribution companies (Discos).

Chairman Pak Steel briefed the meeting about current profile of Pak Steel and said some difficulties were being faced in production due to power and gas shortage. He also requested ECC’s approval for specific amount for workers salaries. The chairman added that despite difficulties the PSM, boosted by the special Rs. 18.5 billion bailout package by the government last year, had achieved 50% production capacity, starting from a mere 1%. He said the PSM management eyed 70% capacity target in March.  The chair, while approving the amount for payment of salaries, directed for formation of special committee including Secretary Finance, Chairman /Secretary Privatization Commission, Secretary Industries, headed by Chairman SECP to look into affairs of PSM. He also asked the Privatization Commission to table its proposal for the restructuring of PSM at the next ECC meeting.

On a proposal submitted by Commerce Division, the meeting approved disposal of 28,999 MT of unsold sugar stock available with the TCP. Utility Stores Corporation would procure sugar from TCP and this being an arrangement between two government entities, transparency would be ensured. The chair remarked that USC would sell sugar to the customers at appropriate price and would not receive any subsidy whatsoever.

While announcing this decision, the chair directed the concerned authorities to keep vigil on demand and supply situation of sugar and wheat in the country as these were important commodities of everyday use and their availability to the masses was to be accorded due care.

The Ministry of Petroleum and Natural Resources proposed that in view of the widening gap in natural gas demand/supply on the gas supply network, especially M/s SNGPL network, up to 12 MMCFD gas from Miano Tight Gas field may be allocated to M/s SNGPL through swapping arrangements. M/s SSGCL, having the nearest transmission network may take delivery in their system and supply to SNGPL. The ECC after due consideration approved the proposal. Ministry of Petroleum and Natural Resources also proposed that 3 MMCFD gas from Maru-East-1 gas field be allocated to M/s Engro fertilizer during the EWT (extended well testing) period. Further, the commerciality/D&P lease of the field may also be approved. The proposal was accordingly approved by the ECC. M/s Engro Fertilizer had expressed their interest to receive gas from Maru East-1 as it would help them to produce 14,000 tons extra urea in the country.

The ECC also passed a resolution eulogizing the services of Sanaullah, Joint Secretary (Committee), Cabinet Division who is due to retire from government service. All participants of the meeting wished him well in his future endeavours.