ISLAMABAD: The Senate’s Standing Committee on Finance and Revenue has sought detailed briefing from the Finance Ministry on the release of $68 million as per agreement with Export-Import (EXIM) Bank China.
According to an agreement signed in 2011, a total of $124 million were to be released.
“The Finance Ministry will elaborate the current status of the said agreement before the committee today (Monday),” a source in the Finance Ministry told Customs Today on Saturday. He said that in December 2010, during visit of then Chinese premier Wen Jiabao, Pakistan and China inked a series of agreements and memorandum of understandings on expanding cooperation in economy, energy, security and technology and a year later in same month 2011, both the countries also signed six bilateral agreements worth of $700 million, including a Currency Swap Agreement to further bolster their existing trade and economic cooperation.
Established in 1994, the Export-Import Bank of China is one of the three institutional banks in China chartered to implement the state policies in industry, foreign trade, diplomacy, economy and provide policy financial support so as to promote the export of Chinese products and services as well as is subordinated to the State Council.
The source said that since the signing of the aforesaid agreements between the Finance Ministry and EXIM Bank China, a number of developments regarding implementation of the agreements had been made.
“In April 2014, on the sidelines of Boao Asia Forum 2014, President, EXIM Bank of China Lui Ruogu held meeting with Prime Minister Nawaz Sharif and reiterated bank’s commitment and resolve to continue supporting in financing infrastructure and energy sector projects,” the source observed, saying that Li Ruogu assured support and agreed to gear the pace of financing process.
Similarly the source said that in last October, President, EXIM Bank of China Li Ruogu and Finance Minister Ishaq Dar shared their views on various projects of the economic corridor, particularly the importance of project viability and early completion of the projects at a meeting in Beijing.
“In the recent past, in December 2014, Finance Minister Ishaq Dar told Director General Strategic Plans Division (SPD) Lieutenant General Zubair Mahmood Hayat that Exim Bank of China would finance 82% of the overall cost of the K2-K3 nuclear energy projects as energy projects were part of Pak-China Energy Corridor,” the source added.
Six agreements signed in 2011 included, Supplementary Agreement on Extension of Five Year Development Programme on Trade and Economic Cooperation, Inter-Governmental Framework Agreement on Additional Financing for Improvement of KKH ($90 million), Concessional Loan Agreement on Additional Financing for Improvement of KKH ($90 million), Loan Agreement on Provision of $259 million Preferential Buyer’s Credit for KKH (Karakorum Highway) Realignment at Attabad and Loan Agreement on Export Credit Facility of $464 million for Power Plant between Guddu Power Company.
The source said the Finance Ministry would also tell the committee about the possible loss of import duty incurred to the national kitty due to umbrella of concession offered by the government to Chinese exporters.
“Pakistan agreed to eliminate and reduce rates on 5,686 tariff lines under Free Trade Agreement (FTA) which included elimination of tariff (three years) 2,423 35.6%, reduction on margin of preference from 50% ( five years), reduction on margin of preference from 20% (five years),” the source said, adding that Pakistan gave market access to China mainly on machinery, organic, and inorganic chemicals, fruits and vegetables, medicaments and other raw materials for various industries, including engineering sector, and intermediary goods for engineering sector.
