ECC allows Ministry of Economic Affairs to sign 15 debt rescheduling agreements
ISLAMABAD – The Economic Coordination Committee (ECC) of the Cabinet on Tuesday allowed Ministry of Economic Affairs to sign 15 debt rescheduling agreements with various credit countries, finalised under Debt Service Suspension Initiative (DSSI).
The ECC meeting was chaired by Federal Minister for Finance and Revenue Shaukat Tarin. ECC has considered Ministry of Economic Affairs’ summary on G-20 Debt Service Suspension Initiative (DSSI). The ECC allowed Ministry of Economic Affairs to sign 15 debt rescheduling agreements with various credit countries, finalized under DSSI.
Pakistan has already concluded and signed 80 agreements with 21 bilateral creditors for the rescheduling of its debts under the G-20 DSSI framework, amounting to rescheduling of $2,088 million. The signing of agreements recently with the Saudi Fund for Development brought the total rescheduled amount to $2,934 million while negotiations for the remaining $754 million are underway. Pakistan’s total debt payable to 11 of the G20 nations stands at about $20.7 billion under 155 loans. Pakistan does not have any loan from the other nine members.
Negotiations for finalization of debt rescheduling agreements with Belgium, Italy, Japan, Russia, Spain, UK and USA are ongoing. Debt relief under the DSS-III is around $950 million. Six agreements for DSSI-II with Italy, Japan and UK have been negotiated and finalized. Eight agreements for DSSI-III with Austria, France, Korea, Netherlands, Sweden and Switzerland have also been negotiated and finalized and one combined agreement for DSSI-1, DSSI-II and DSSI-III with Saudi Arabia has also been finalized.
ECC approved the proposal of Petroleum Division regarding issuance of sovereign guarantee amounting to Rs. 21,000 million in favour of M/s Faysal Bank Limited at considerably lower mark up rate for the remaining tenor of the loan i.e 4 and ½ years along with issuance of letter of comfort for new finance agreement w.r.t pipeline infrastructure development project LNG-II. On a proposal of Petroleum Division for re-allocation of OGDCL’s Jhal Magsi gas to SSGC, the ECC allowed reallocation of 15 MMCFD Jhal Magsi gas to SSGC. SSGC would carry out the project of gasification of Jhal Magsi town and would embark the required gas out of the proposed allocation. The injection of this gas will help mitigate SSGC’s gas demand-supply deficit.
On a proposal of Petroleum Division for allocation of gas from Mari (Deep) gas reservoir to M/s SNGPL, the ECC approved in principle upto 110 MMCFD gas from Mari deep (Goru-B) gas reservoir allocation to SNGPL till 30-06-2024 on firm basis with direction for the determination of price mechanism of gas. Ministry of Industries and Production presented a summary for Ramazan Relief Package. The ECC approved in principle the Ramazan Relief Package -2022, involving subsidy of 8.2 billion for the whole population of the country rather than only 20 million households registered with Ehsaas Rashan Riyat Programme with directions to frame procedural mechanism for limiting the interventions by each family.
Ministry of National Food Security & Research submitted a summary regarding intervention price for cotton 2022-23 crop. In order to revive cotton production in the country, bring stability in domestic market and assure fair return to the farmers, the ECC allowed Rs. 5,700/40 kg threshold intervention price of seed-cotton. The ECC further allowed to initially procuring two million bales of cotton at intervention price with direction that quantity would be reviewed on monthly basis.
To address PSO and other Oil Marketing Companies (OMCs) concerns over mechanism of payment of Price Differential Claims (PDC), Petroleum Division submitted a summary on revised mechanism with the change to the previously approved mechanism that the PDC will be applicable on sale of petroleum products rather than on procurement of products. The ECC approved the proposal with allocation of additional Rs. 11.73 billion as supplementary grant to meet the expenditure on payment of PDC up to 31st March 2022.
ECC also approved Technical Supplementary Grant amounting to Rs. 200 million to Pakistan Military Accounts Department (PMAD) for conversion of Pensioners to Direct Credit System. ECC also approved Technical Supplementary Grant of Rs. 3500 million in favour of Higher Education Commission for the project titled “Pak University of Engineering and Emerging Technologies (PUEET)”.