Cabinet approves payment of first installment to 35 IPPs

The cabinet has approved payment of the first installment to 35 IPPs out of a total of 47.

Cabinet on Tuesday approved the release of the first payment to Independent Power Producers (IPPs).

Earlier, the ECC of the cabinet constituted a committee on April 28, 2021, to deliberate upon the issue of IPPs payment and finalize the recommendations to present in the next meeting. In compliance with the ECC decision, the committee held a meeting on May 4, 2021, under the chair of the Minister for Finance & Revenue.

Therefore, the Secretary of, Power Division requested the Chairman, ECC of the cabinet for consideration of the agenda regarding IPPs payment.

The Chairman, ECC allowed the request to table the Summary in consideration of the important issue.

The Power Division briefed the forum about the case and requested consideration of the ECC of the cabinet for the following recommendations as agreed in the meeting of the committee held on May 4, 2021, under the Chairmanship of the Minister for Finance and Revenue to make payment to IPPs.

The ECC of the Cabinet to approve the proposals of the summary of Power Division dated 23rd April 2021.

In respect of the proposals, the following recommendation may be made to the ECC.

The matter of alleged savings in the tariff component of IPPs in Pakistan under 2002 policy is already under investigation by the National Accountability Bureau that may be requested to examine and validate the process of negotiations and signing of agreements including the Arbitration Submission Agreement. NAB may also inform if they have any objection to the signing f these agreements and making of payments to the IPPs of 2002 Policy.”

Adviser to the Prime Minister on Commerce and Investment recused himself for the said agenda item.

The Economic Coordination Committee (ECC) of the Cabinet considered the summary “Release of payment to IPP’s 1st Installment of 40% under Payment Mechanism”, and approved the proposal.

However, withheld payment to the remaining 12 IPPs (under Power Policy 2002) may be withheld owing to the NAB investigation.

Federal Minister for Finance and Revenue, Shaukat Tarin, chaired the Economic Coordination Committee (ECC) of the Cabinet on Wednesday to make payment of IPPs.

The Power Division presented a summary before the ECC of the cabinet regarding the release of the first installment of payment to IPPs. Moreover, Secretary Power Division briefed the Committee about the recommendations of the sub-committee constituted during ECC last week.

Secretary Power gave a detailed briefing to the Committee regarding a draft summary for approval of arrangement for providing additional power from NTDC to K-Electric since April 2020. Subsequently, the Secretary Power also raised the issue of non-payment for the additional power supply by K-Electric to Power Division.

After Detailed discussion, furthermore, the ECC constituted a Sub-Committee comprising Federal Minister for Planning, Federal Minister for Energy, Federal Minister for Maritime Affairs and SAPM on Power to be headed by the Finance Minister to negotiate with the Karachi Electric for settlement of payment dispute amicably.

In addition to it, Power Division placed a summary before the ECC regarding tax on payments to the offshore supply contractors of Independent Power Producer(s) located in AJ&K. The ECC considered and approved the summary to facilitate swift processing of such projects due to its strategic importance.

Subsequently, the ECC considered and approved a summary tabled by the Ministry of Industries and Production regarding exemption from duties and taxes for import of oxygen gas, oxygen gas cylinder and cryogenic tanks by oxygen concentrators / Generators/manufacturing Plants under respective Harmonized System (HS) codes for a period of 180 days to cope with the increased requirement of oxygen during the third wave of COVID-19 in the country.

Meanwhile , Ministry of Commerce presented a summary regarding implementation of United Nations Security Council Resolutions (UNSCRS) through export Policy Order, 2020 and Import policy Order, 2020. The ECC considered and approved the summary.

Lastly, Power Division presented a summary before the Committee regarding retargeting of power sector subsidies for electricity consumers during phase-I in consultation with Ehsaas and the Finance Division. The ECC approved the summary, in principle, with a direction to work out modalities for future courses of action.

The ECC had approved the following Technical Supplementary Grants which the cabinet okayed on Tuesday:

Furthermore, it approved allocation of funds for the National Disaster Management Authority (NDMA) for procurement of oxygen gas and delivery mechanism for import of 6,000 MT of oxygen amounting to Rs. 1800 million to meet the emergency requirement for supply of oxygen to hospitals for treatment of COVID-19 patients.

• Rs.10 billion for the Finance Division for reimbursement of telegraphic transfer charges to the banks on home remittances to encourage overseas Pakistanis to remit money through formal banking channels.
• Rs. 115 million for the Ministry of Defence for the up-gradation of health care facilities at Cantonment General Hospital, Rawalpindi.
• Rs. 800 million to the Ministry of Defence Production for the payment of an outstanding loan to the National Bank of Pakistan (Bahrain).
• Rs. 8 million for the Ministry of Information and Broadcasting to clear the pending liabilities of “Implementation Tribunal for Newspaper Employees (ITNE)”.
• Rs. 571.216 million for the Ministry of Law and Justice for the construction of the Islamabad High Court Building.
• Rs. 350 million for the Ministry of Law and Justice for a new building of the Supreme Court Branch Registry Karachi.
• Rs. 198.017 million for running Isolation Hospital and Infections Treatment Center, Islamabad for treatment of COVID-19 patients.
• Rs. 27.5 billion for National Disaster Management Fund to complete NDMA’s component under Karachi Transformation Plan.
• Rs. 48.337 million for the Ministry of Parliamentary Affairs for meeting its various operational expenses.
• Rs. 17.739 million for the Geological Survey of Pakistan (GSP) to repair important laboratory equipment.
• Rs. 1563.046 million for the Ministry of Federal Education and Technical Training for establishment & operation of Basic Education Community Schools.
• Rs. 1210.18 million for the National Commission for Human Development (NCHD) for meeting various operating expenses.
• Rs 100 million for the Cabinet Secretariat, given as contribution from the Government of Punjab for Pakistan Tourism Development Endowment Fund.