ECC defers payment of over Rs262bn to public sector power plants as ministries continue to lock horns

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has deferred approval of Rs262.075 billion to public sector power plants due to differences between the finance and energy ministries on the modalities of payment.

According to the Finance Division, Federal Minister for Finance, Revenue and Economic Affairs Dr Shamshad Akhtar presided over the ECC meeting.

Sources said that the Ministry of Energy had proposed to the ECC that the Finance Division should release Rs131.035 billion to GPPs (Rs26.782 billion to generation company (GENCO-II); Rs 2.965 billion to GENCO-III; Rs 83.638 billion to WAPDA; Rs 16.015 billion to Quaid-e-Azam Thermal Power (RLNG) and Rs 1.635 billion to Quaid-e-Azam Solar Power) in the second quarter. Similarly, payment of Rs131.040 billion to GPPs (Rs 26.787 billion to GENCO-II; Rs 2.965 billion to GENCO-III; Rs 83.638 billion to WAPDA; Rs 16.015 billion to Quaid-e-Azam Thermal Power (RLNG) and Rs 1.635 billion to Quaid-e-Azam Solar Power) had been proposed by the Ministry of Finance for the third quarter.

On the other hand, the Finance Division had the point of view that the Ministry of Power should adjust WAPDA and GENCO-II liabilities, besides the gas companies such as OGDCL and SNGPL, as well as SSGCL, pay dividend to the government of Pakistan before their dues are cleared.

According to the Finance Division, the summary of the Power Division for settlement of payables to Government Owned Power Plants (GPPs) at par with IPPs was approved and the ECC directed to release Rs262.075 billion to public sector power plants through technical supplementary grant. This matter will be further discussed in the next meeting.

The ECC considered a summary of the Ministry of Energy (Power Division) regarding the release of Rs 57 billion advanced subsidy for payment of K-Electric arrears and approved the Technical Supplementary Grant in order to meet the operational requirements of the power sector.

Finance, Energy Division lock horns over payment of Rs262 billion to power plants

The ECC agreed to initiate the phase-out of the Export Finance Scheme of the State Bank of Pakistan- a requirement of the IMF Standby Arrangement. To operationalize this requirement, the ECC gave approval to the release of Rs3.87 billion to EXIM bank for the current Fiscal Year.

While discussing the report on the ECC’s decisions on PSMs liabilities towards GoP as discussed on September 19th, 2023, the Minister of Finance directed the Ministry of Industries to carry out a diagnostic survey to determine why liabilities of PSM persisted even though it had not been operational since 2015 and how PSM land had been allocated to housing companies and served other industries without due process. The ECC showed its displeasure on the PSM board and recommended that the Industries Division may look into this issue for further necessary action.

The transfer of the National Energy Efficiency and Conservation Authority (NEECA) from the Science and Technology Division to the Power Division was approved and the ECC also approved the TSG amounting to Rs152.417 Million for FY 2023-24 in favour of NEECA for this purpose.

The summary regarding the Profitable Support price for the wheat crop 2023-24 submitted by NFS&R was also discussed. After detailed deliberations with all the provinces, the ECC recommended the last year’s price i.e. Rs3900/40 Kg, given the substantial increase of 77% in the support price in 2022/23.

The ECC endorsed that there shall be no subsidy on agricultural inputs, which in any case is the responsibility of the provinces. The forum also gave approval of the notification of minimum indicative prices of Tobacco Crop 2024 and revision of cess rates on tobacco for the year 2024-25.

An additional agenda item from the Ministry of Information Technology and Telecommunication regarding the relending of GoP to the National Database and Registration Authority (NADRA) was discussed and got approved by the ECC.