ISLAMABAD    -   The Economic Coordination Committee (ECC) of the Cabinet on Wednesday has approved concessionary rates of electricity and gas for erstwhile five zero-rated export sectors amid to increase the country’s declining exports.

The ECC chaired by Adviser to Prime Minister on Finance and Revenue Abdul Hafeez Shaikh has approved the continuation of concessionary rates of electricity and RLNG for export oriented sectors (erstwhile zero rated sectors). 

It has been worked out by the Power Division that for July-August 2020, the electricity to export oriented sectors may be provided at US cents 7.5/kWh all inclusive and thereafter at US Cents 9/kWh from September all inclusive for the rest of the financial year 2020-21.

An official informed that government has decided to increase the power tariff for five export sectors from September in order to reduce the volume of subsidies. 

He said that exports sectors including textile, surgical goods, carpets, leather and sports goods would bear additional financial burden of around Rs14 billion annually after increasing the power tariff to US Cents 9/kWh from US cents 7.5/kWh.

On March 11, 2020, the ECC had extended special electricity tariff at 7.5 per unit cents, aimed at giving relief to the five erstwhile zero-rated sectors. 

The ECC had decided that Finance Division will pay Rs28 billion as subsidy for FY 2019-20 to the Power Division in the first week of July 2020 but nothing has been released so far. The ECC further decided that for continuation of relief package in FY 2020-21, additional subsidy would be capped at Rs20 billion. 

“Alhamdulillah, I am glad to inform that in meeting of ECC, it has been approved that the erstwhile 5 zero-rated industries will be given a rate of 7.5 c/kWh for July & August 2020 & 9 c/kWh till 30 June 2021, while for gas rate will be $6.5/MMBtu till 30 June 2021,” said Adviser to Prime Minister on Commerce and Investment Abdul Razak Dawood on twitter. 

He further said that notification would be issued after ratification in next Cabinet meeting. He thanked the Ministries of Energy and Finance for their continued support.

Meanwhile, for the release of the Next Generation Mobile Services (NGMS) Spectrum in Pakistan for the improvement of mobile broadband services, ECC approved the formation of an Advisory Committee for the release of unsold spectrum for NGMS. 

The composition of the Committee is as follows: Adviser to Prime Minister on Finance & Revenue (Chairman), Federal Minister for Information Technology and Telecommunication, Adviser to PM on Commerce, Minister for Industries and Production, Federal Minister for Planning, Development and Special Initiatives besides other members.

Terms of Reference of the Committee (ToRs) would be: 1) To examine and evaluate the market assessment report and recommendations of PTA for release of maximum NGMS spectrum in Pakistan. 2) To examine and finalise the policy directives for the Federal Government for the release of NGMS spectrum in Pakistan. 3) To oversee the release process to be conducted by PTA.

The ECC also approved the amendment in the minutes of an earlier decision (based on the directives given earlier in the meeting of 22 July 2020) related to subsidy of the Naya Pakistan Housing and Development Authority. 

The amended and approved decision states “approval of allocation of Rs33,095 million on account of 10 years mark-up subsidy on loans with tenor up to 20 years with supplementary grant of Rs4,774 million on account of mark-up payment during the current financial year (FY 2020-21). 

The ECC also decided that Finance Division will continue with the existing guarantee of 31 billion for the power sector through Power Holding Company (PHL).