The elite cabinet panel’s nod paves the way for these measures to be tabled for Cabinet approval.
By Muhammad Ali
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has accorded its approval to a sheaf of measures including the import of 33,000 metric tons of urea and PKR 16 billion in supplementary grants to the Sustainable Development Goals Achievement Program.
In its meeting chaired by Minister for Finance Ishaq Dar here Friday, the elite cabinet panel gave its go ahead to an initiative to tap into the third round of a G-20 debt restructuring initiative designed to mitigate the socio-economic impact of Covid-19 global pandemic.
Import of 33,000 MT urea at USD 551/MT
As part of the government’s efforts to ensure adequate supplies of urea fertiliser to the farmers at a reasonable price, the ECC gave its nod to a Trading Corporation of Pakistan (TCP) proposal to import 33,000 MT urea at USD 551/MT.
The price, found to be the lowest responsive bid to a TCP tender floated in mid-November, was quoted by m/s Swiss Singapore Overseas PTE Ltd
The Ministry of Industries and Production submitted a summary for import of urea on November 17, 2022. The ECC allowed TCP to import 125,000 MT urea fertiliser (+/- 5000 MT MOLSO) on G2G basis from China for meeting its demand for the month of January-2023 at USD 480/MT (FoB), on 90 days deferred payment basis, inclusive of markup.
It allowed TCP to import 35,000 MT urea fertiliser from M/s SOCAR on G2G basis for meeting its demand for the month of December-2022 at USD 685/MT. For procuring the remaining quantity of 40,000 MT of urea, the TCP was asked to explore options for fresh tendering/G2G basis, to meet requirement of the urea fertiliser in the country.
The federal cabinet in its decision ratified the decision of the ECC with the stipulation that the Industries & Production Division and TCP shall explore other cheaper options for December delivery, as an alternative to the G2G offer made by M/s SOCAR for procurement of 35,000 MT of Urea fertiliser at the rate of USD 685 (CFR) within the next twenty four hours.
If a cheaper option becomes available, it would be availed. Otherwise, the already available option by M/s SOCAR at the rate of USD 685 (CFR) for procurement of 35,000 MT Urea on G2G basis, as already approved by the ECC, would stand ratified.
In compliance with the decision, the TCP advertised a tender for the import of urea on November 24, 2022, which was opened on December 1, 2022. The TCP has now informed the ECC that they received three responsive offers below the USD 685 level, but that the lowest of these came from Swiss Singapore Overseas Enterprises PTE Ltd, at USD 551/MT, which it recommended for the apex cabinet panel’s approval. The ECC granted its approval.
Tapping into Covid-19 debt relief
The ECC also assented to a proposal to tap into what will be the third and final round of a G-20 debt relief initiative for IDA-eligible countries to mitigate the socio-economic impact of Covid-19.
Known as the Debt Service Suspension Initiative (DSSI), the initiative was announced by the G-20 Finance Ministers at their meeting in April 2020. Debt relief under this initiative was through the suspension of principal and interest payments due from May to December 2020.
The ECC in its meeting held on May 20, 2020, approved the proposal and authorised the Economic Affairs Division (EAD) to apply for debt relief and proceed with signing of the MOUs with creditor countries. Pursuant to the ECC decision, the Ministry of Economic Affairs entered into negotiations with bilateral creditors.
Under DSSI-I, 32 debt rescheduling agreements with 19 creditor countries have been signed. DSSI-I yielded debt relief of USD 1.605 billion.
Subsequently, the G-20 in their meeting held on October 14, 2020, extended the DSSI for a
further period of six months i.e. January-June 2021, known as DSSI-II (Extension). The ECC, in its meeting dated November 20, 2020, authorised the EAD to proceed with the modalities for debt relief under the DSSI-II.
As part of the DSSI-II, 35 debt rescheduling agreements with 15 creditor countries have been signed, yielding debt relief of USD 1.131 billion.
Finally, in their meeting held on April 7, 2021, the G-20 Finance Ministers extended
debt relief for a further and final period of six months (Jul – Dec 2021), known as DSSI-III (Final Extension).
The ECC, in its meeting dated June 9, 2021, authorised EAD to proceed with the modalities for debt relief under the DSSI-III. So far, as part of the DSSI-1I1, 36 debt rescheduling agreements with 15 creditor countries have been signed, yielding debt relief of almost USD 947 million.
As part of DSS I-III, another agreement with Japan has now been negotiated and finalised including the principal amount of USD 25.430 million and mark up amount of USD 713,913.
PKR 16 billion more for SDGs
The ECC also approved two separate grants of PKR 8 billion each in favour of Power Division and Housing & Works for execution of SDGs Achievement Program during the current fiscal year.
This program will be executed through the good offices of Parliamentarians for which the government had set aside PKR 68 billion just ahead of the budget. This amount was later on increased to PKR 82 billion for the current fiscal year.
Copyright © 2021 Independent Pakistan | All rights reserved
