Provinces allowed to export wheat, wheat products

The Economic Coordination Committee (ECC) of the Cabinet on Friday approved export of wheat, procurement of sugar by the TCP and raising Rs 80.152 billion by Wapda from commercial banks for payment of NHP to Punjab and Khyber Pakhtunkhwa governments. A meeting of the ECC presided over by Prime Minister Shahid Khaqan Abbasi approved a proposal of Ministry of National Food Security and Research to allow the governments of Punjab and Sindh to export 1.5 and 0.5 million tons of wheat, respectively, including wheat products.
The meeting was told that the export of wheat and wheat products would be completed before the 30th June 2018. Proposal for exemption from provision of section 113 of the Income Tax Ordinance 2001 for Public Sector Universities was also approved by the ECC.
The ECC also approved a proposal for the procurement of 0.3 MMT of sugar from the surplus stock of the sugar mills through tendering process and to export the same through international tendering process. The step would enable the mills to procure sugarcane from the growers at the prescribed rate and ensure timely payments to the farmers. The ECC also approved a proposal and allowed WAPDA to raise loans of Rs 80.152 billion, including Rs 38.120 billion as per the term sheet cleared by the Finance Division, from local banks. The meeting was informed that the Council of Common Interests (CCI) had approved payment of net hydel profit (NHP) by WAPDA to the government of KP including regular NHP and arrears of Rs 70 billion for the last ten year (2005-06 to 2014-15).
The CCI also approved regular NHP at the rate of Rs 1.10/kWh for 2016-17 onwards as well as arrears of Rs 82.71 billion for 11 years (2005-06 to 2015-16) for government of Punjab. The said amount was also payable in four installments with Rs 38.12 billion immediately through issuing promissory note of one year's tenor and Rs 14.86 billion each in fiscal years 2017-18, 2018-19 and 2019-20.
The Wapda issued a promissory note of Rs 38.12 billion on January 10, 2017 to pay NHP arrears to the government of the Punjab against sovereign guarantee approved by the ECC to the promissory note to be retired on December 31, 2017. The government of Punjab got the promissory note discounted on March 29, 2017 from Allied Bank Limited, after due endorsements by WAPDA and the government. The Wapda filed its tariff petition with NEPRA for the fiscal year 2017-18 after incorporating NHP arrears payable to the governments of KP and the Punjab as per CCI's decisions.
The Nepra determined tariff on November 22, 2017 which was further clarified on the request of WAPDA on December 14, 2017 and allowed recovery of the NHP arrears over a period of one year from the date of tariff notification. The ECC was further told that there is an outstanding payment of Rs 24.465 billion on account of NHP to the government of KP and Rs 17.5667 billion to the government of Punjab in addition to Rs 38.120 billion payment against a promissory note en-cashed by the government of the Punjab from Allied Bank Ltd, making the total immediate liabilities of WAPDA Rs 80.152 billion. The meeting was told that that re-payment of promissory note by WAPDA is due on December 31, 2017.
Thus the ECC was urged that in order to clear WAPDA's liabilities pertaining to NHP towards the governments of KP and the Punjab as well as to retire the promissory note of Rs 38.120 billion, the WAPDA should be allowed to raise loans from local commercial banks.
The ECC also approved a proposal for grant of exemption from tax-duties for import of construction material for infrastructure projects of National Highway Authority (NHA) under the China-Pakistan Economic Corridor (CPEC) project. This exemption would be applicable only to the construction of Sukkur-Multan section of Peshawar to Karachi Motorway project. The ECC approved exemption from relending policy of government of Pakistan for funds release to State Bank of Pakistan (SBP) for implementation of Financial Inclusion and Infrastructure project. The proposal of exemption from applicability of section 5A of the Income Tax Ordinance 2001 to companies with special agreement with the government of Pakistan was approved by ECC.