ISLAMABAD - The Economic Coordination Committee (ECC) of the Cabinet on Thursday approved reallocation of an amount of Rs14.8 billion from RLNG-II pipeline project to LPG-air mix projects for their expeditious completion.

The ECC chaired by Prime Minister Shahid Khaqan Abbasi has approved a proposal for allowing Sui Southern Gas Company Limited to reallocate an amount of Rs14.8 billion from RLNG-II pipeline project to LPG air mix projects for their expeditious completion and to ensure uninterrupted supply of gas to household, industry etc.

The ECC directed SSGCL to expand setting up of air mix plants in every district of the country.

The ECC approved a proposal for grant of 4-years extension in Kandra Development and Production Lease. The decision was taken after taking into account various impediments which have hindered the production of recoverable reserves from Kandra gas field and setting up of 120 MW power plant by M/s Kandra Power Company Ltd (a subsidiary of M/s Pakistan Exploration (Pvt.) Ltd.).  Considering a request from Ministry of Industries and Production for approval of one-time grant to Pakistan Machine Tool Factory (PMTF) for payment of dues owed to its retired employees, the ECC approved a grant of Rs300 million in the first installment.

The ECC also considered the issue of power subsidy for the industrial sector and the payment of industrial subsidy package claims. It was decided to constitute a committee to analyze impact and sustainability of the package. Sources informed that Power Division has asked the ECC to consider following proposals that included the payment of Industrial Support Packaged (ISP) claims after cross subsidizing against negative fuel price adjustments may be made till December 2017.

The Power Division has also recommended that the support package may be discontinued after December 2017 till improvement in the financial health of the sector due to the financial difficulties.

Meanwhile, the Finance Division has also agreed with the proposals with the addition that in view of fiscal constraints, subsidy under ISP may not be allowed beyond December 2017.

The ECC was informed that Power Division will inform the discos, including KE immediately after approval of the competent forum.

It is worth mentioning here that government last year had approved Rs3/kwh subsidy as announced by the prime minister for the industrial sector. However, the Power Division has asked the ECC to for discontinuation of Rs 3 per unit subsidy on electricity available to industrial sector. The ECC formed a committee on it.