ECC approves Rs320bn for power sector, phases out export finance scheme

The Economic Coordination Committee voices discontent with the Pakistan Steel Mills board for the mishandling of the mill's assets, including its land

The Economic Coordination Committee (ECC) of the cabinet has approved a payment of Rs320 billion to public sector power plants and K-Electric through supplementary grants and has decided to phase out the Export Finance Scheme of the State Bank of Pakistan, as per the International Monetary Fund (IMF) condition.

The ECC, chaired by caretaker Finance Minister Dr Shamshad Akhtar, met on Wednesday and discussed various issues related to the power sector, wheat procurement, and Pakistan Steel Mills (PSM).

The ECC approved a summary of the Power Division for settlement of Rs262.075bn payables to government-owned power plants (GPPs), which were outstanding as of Nov 11, 2020. The ECC was informed that Rs182.465bn had already been released to GPPs in FY23, out of the total Rs444.5bn liabilities that were sought in March 2022.

The ECC also approved another summary of the Power Division for the release of Rs57bn advanced subsidy for payment of K-Electric arrears and a technical supplementary grant to meet the operational requirements of the power sector.

The ECC agreed to initiate the phase-out of the Export Finance Scheme of the State Bank of Pakistan, which was a requirement of the $3bn Stand-By Arrangement with IMF. To operationalise this requirement, the ECC approved the release of Rs3.87bn to Exim Bank for the current fiscal year.

The ECC also reviewed a report on its decisions regarding PSM’s liabilities towards the government and expressed its dissatisfaction with the PSM board for mismanaging the mill’s assets, including its land.

The finance minister directed the Ministry of Industries to conduct a diagnostic survey to determine the reasons for PSM’s persistent liabilities and the allocation of its land to housing companies and other industries without due process. The ECC recommended that the Industries Division take further action on this issue.

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