ECC approves operation, maintenance of Gencos

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Tuesday discussed in detail and approved operation and maintenance of Generation Companies (GENCOs) through international bidding aimed at bringing improvement in the efficiency of four power generation companies in the country.

The ECC, which met here with Federal Minister for Finance and Economic Affairs Dr Abdul Hafeez Shaikh in the chair, also approved LPG import and distribution policy which would help save Rs 81 billion per annum to the national exchequer.

The ECC further discussed tariff rationalization policy of the government and decided to establish four committees headed by Deputy Chairman of Planning Commission, comprising representatives of ministries of industry, textile and commerce, and Federal Board of Revenue (FBR) as members, for further rationalization of tariffs besides approving soft-loan financial guarantees Rs 500 million in addition to existing Rs 1.5 billion in order to help completion of textile cities in the country.

Briefing newsmen about the ECC decisions, Secretary Finance Dr Waqar Masood said that the Committee discussed in detail the tariff rationalization and specific duties. It noted that during the last two decades the tariff rates had been reduced from 250 per cent to only 25 per cent in the country.

He added that the committee discussed the summary submitted by the Ministry of Commerce and stressed the need for further liberalization of the tariffs and their uniformity besides removal of non tariff barriers. In this regard, it formed a four-member committee.

He said that tariff ratios were 25, 15, 10 and 5 per cent.

Dr Waqar Masood said that the ECC deferred a summary submitted by the Ministry of Petroleum and Natural Resources regarding the Iran-Pakistan Gas Pipeline project.

He further said that the ECC also discussed in details operation and maintenance contracts through international bidding for the Generation Companies (GENCOs) and formation of a framework in this regard for enhancing their efficiency by about 33 per cent.

He added that international bidding would be held through open tenders and an independent board had also been established for the generation companies.

He said that the summary was submitted by the Ministry of Water and Power.

He clarified that during induction of staff, no retrenchment of existing employees would be made.

He said that the ECC noted that in the distribution of LPG (liquified petroleum gas) there were two types of supply, one was through import and other was local supply. There was high profit margin in local supply against the imported LPG.

He said that Gas Development Levy would be imposed on both local and imported LPG to remove price difference and the prices would range be from $ 100 to $ 120 per tons.

Copyright APP (Associated Press of Pakistan), 2011