ECC okays guarantee worth Rs 164.978bn for public sector

By Sajid Chaudhry
ISLAMABAD: Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved guarantee worth Rs 164.978 billion for public sector to procure 6.7 million tonnes wheat for the wheat crop season 2011.
ECC meeting chaired by Dr Hafeez Shaikh Federal Minister for Finance on Wednesday was informed that the federal government would provide payment guarantee to provinces and PASSCO on financing they would obtain from banking sector.
ECC endorsed the public sector wheat procurement target of 6.7 million tonnes and assigned procurement targets i.e. Punjab to procure 3.5 million tonnes, PASSCO will procure 1.3 million tonnes, Sindh 1.3 million tonnes, Khyber Pukhtunkhwa 0.4 million tonnes and Balochistan will procure 0.07 million tonnes wheat from farmers on minimum guaranteed price of 950 per 40 kilogram.
ECC also decided that Punjab and PASSCO would maintain 1 million tonnes Wheat Strategic Reserves as propionate of their procurement. ECC also allowed the provinces that they could maintain further wheat strategic reserves according to their capacity and needs.
It was informed to the ECC that Punjab already possesses 2.66 million tonnes wheat and these stocks will be sold so as to create a space for fresh stock of wheat at public storage facilities. The provinces also allowed exporting wheat exports according to their wheat stock availability.
The committee constituted for wheat issue in the chairmanship of Deputy Chairman Planning Commission also presented its report to the ECC and recommended that wheat export should continue and government should not impose any ban on export of wheat. A cutoff date should also be announced so the wheat exporters can obtain and meet their export targets.
ECC was informed that country has enough stock of sugar to meet the sugar requirements till October including for the Holy month of Ramadan. It was also informed that private sector has also opened Letter of Credit for import of 87000 tonnes sugar.
Trading Corporation of Pakistan representative also informed the ECC that some 100,000 tonnes of urea fertilizer has already arrived in the country and some 130000 tonnes of urea will arrive in the country on March 19 to meet Rabi Crop requirements. Government has opened $100 million LC for import of fertilizer to meet national requirements.
ECC was informed that FBR would announce and notify new ex-factory price of sugar for assessment of GST soon so as to start assessment of 8.5% GST on new ex-factory price.
Official sources informed that the finance minister enquired from TCP about the procedure of opening of Letter of Credit (L/C) for commodity imports, but TCP representative could not satisfy the ECC meeting on the issue. It was informed that a consortium of 6 banks is providing such services to TCP. However, the meeting was of the view that there is commission involved in these transactions. ECC directed the TCP to explain in detail the procedure on opening of L/Cs for imports in next ECC meeting. The sources also informed that due to the shortage of time, ECC could not take up the issue of allowing import of five-year-old busses, trucks and tractors as well as fixation of depreciation rate on import of cars.
The committee was further informed that without completion of Ratoo-Dero Highway, the Gwadar ports could not be made economically viable.