ISLAMABAD              -         The Economic Coordination Committee (ECC) of the Cabinet on Saturday approved the criteria for disbursement of Rs200 billion in power sector received through Islamic Sukuk.

The ECC meeting, which was chaired by Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh, has made the decision. According to the decision made by the forum, energy purchase price inclusive of GST will be paid to ensure maximum generation is available during next 3 summer months (June, July and August 2020) according to the generation plan of next three months.

Capacity payments will be disbursed to meet the debt servicing and taxation requirements for the period from June to end August 2020 and payments to WAPDA, nuclear power plants and partial settlement of import of power from Iran and NTDC transmission charges will be disbursed separately for operational requirements for public sector plants and entities, as WAPDA and nuclear power plants comprise of more than 30% of the total planned generation in the next three months. However, this disbursement criterion will be followed for funds released under Rs.200 billion only.

The ECC directed Ministry of Energy to submit a proposal in next two weeks setting up the general principles and exact formula of payments based on the principles for the future payments.

The chair also directed the Ministry of Energy to minimize discretion in the principles/ formula so that the funds may reach the maximum possible number of receivers and reduce the built up of liabilities towards the government.

It was also directed that as soon as the payments are made the information should also be made public through the official website of the Ministry for the information of the general public.

Earlier, ECC on Friday rejected a move by the Power Division for payment of Rs200 billion to various public and private sector entities without a well defined and written criterion. Power Division had come up with a summary on disbursement mechanism which did not satisfy Dr Abdul Hafeez Shaikh who found them to be vague. He asked as to who prepared the document for allocation of funds to various entities and who was responsible for payments.

On the proposal of the Ministry of Industries and Production, ECC approved the release of Rs 525.858 million in favor of government of AJK for disbursement amongst the eligible commercial and industrial consumers of electricity under the PM’s SME Relief Package and similarly Rs. 136.299m to be provided to the government of Gilgit Baltistan for disbursement amongst the eligible commercial and industrial consumers of electricity. Total subsidy under the SME relief package for AJK and GB comes to 662.157 million rupees.