ISLAMABAD: The Economic Coordination Committee of the Cabinet has approved the proposal put forward by the Ministry of water and power to use the available generation capacity-policy for short term independent power producers.
The ECC met here with Finance Minister Ishaq Dar in the chair approved the said proposal after it was made clear before the forum that the proposed policy did not contravene the Supreme Court of Pakistan judgment of 30th March, 2012 in Rental Power Projects case. The ECC allowed exemption of customs duty at the rate of 5% for the next 3 years.
The meeting decided to revive three Rental Power Plants which had been shelved by the Pakistan People’s Party government and also imposed regulatory duties on import of steel products and mobile phones.
In a meeting chaired by Finance Minister Ishaq Dar, the ECC also gave its approval in principle of the North-South gas pipeline project under a government-to-government arrangement. China will provide loan for project.
Further, the ECC waived off 5% custom duties on these RPPs. The move is aimed at adding roughly 260 megawatts of electricity to the grid through power generation using residual fuel oil. The government will purchase electricity from these RPPs for next three years.
The government maintained that the policy to revive the shelved RPPs was not in contravention to a Supreme Court of Pakistan judgment in the March 30, 2012 RPPs case, in which the apex court struck down the PPP’s RPP policy.
In order to avoid public criticism, the Pakistan Muslim League-N government has rebranded the RPPs as short-term Independent Power Producers.
Interestingly, the author of the policy is the Water and Power Minister Khawaja Asif, who had filed a case against RPPs in the SC during the PPP tenure, alleging corruption.
The government further said that the new arrangement with the RPPs will be based on the “take-and-pay” basis whereby there will be no obligation on the government of Pakistan for payment of capacity or any other charges.
The ECC also approved a move to accord sovereign guarantee for a syndicated term finance facility amounting to Rs25 billion for the power sector.
