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ECC approves financing plan for RLNG-III Karachi-Lahore pipeline project

Published 08 January 2018

The government has approved the financing plan for 1.2 billion cubic feet per day (BCFD) capacity RLNG-III pipeline project (Karachi to Lahore) to be undertaken by SSGCL and SNGPL.

The meeting of Economic Coordination Committee (ECC) of the Cabinet, chaired by the Prime Minister Shahid Khaqan Abbasi, has approved financing plan for RLNG-III pipeline project (Karachi to Lahore). The ECC directed Petroleum Division to also examine the possibility of public-private partnership for the project.

The government last year had put off approval for a commercial loan of Rs175.5 billion required for laying the third RLNG pipeline from Karachi to Lahore. The Petroleum Division placed a summary before the ECC to either provide Rs175.5 billion from the GIDC or arrange a commercial loan at minimum interest rate.

The ECC also approved a proposal for withdrawal of sales tax and customs duty on imported cotton effective from 8th January, 2018. The government has withdrawn the sales tax and customs duty on import of cotton to encourage value addition, reduce cost of doing business and bridge the gap between production and consumption.

The textile industry of Pakistan consumes around 12 to 15 million bales of cotton per annum. Sustainability and viability of spinning industry is totally dependent on performance of the domestic crop. Textile industry has to meet this shortage from import of cotton from other countries. The impact of duties are induced in the price of domestic cotton, resulting in increase in cost of doing business for the entire textiles value chain, specially for export oriented sector in highly competitive international markets. It may also be noted that mills consumption has reduced and entire gap has not been bridged in last two years. Sustainability and viability of spinning industry is totally dependent on performance of the domestic crop. Textile industry has to meet this shortage from import of cotton from other countries. The impact of duties are induced in the price of domestic cotton, resulting in increase in cost of doing business for the entire textiles value chain, specially for export oriented sector in highly competitive international markets.

Meanwhile, proposal to allocate 10 MMCFD gas from Adam X-1 and 18 MMCFD from Adam West X-1 to SSGCL was approved. The price of gas will be determined as per the applicable Petroleum Policy.

The ECC also granted approval for issuance of GoP Sovereign Guarantee for Rs 39,000 million for construction of two 660 MW coal power projects at Jamshoro. The approval has been granted after third party evaluation of the project and authentication of the projected demand and supply data submitted by NTDC. The Prime Minister and members of ECC appreciated Shahid Mehmood, Secretary Finance for his meritorious services to the Government of Pakistan. Shahid Mehmood will retire from service on 06 January 2018.



Source: Company Press Release