ECC approves Rs5.6bln in loan guarantee for PIA

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Tuesday approved Rs5.6 billion in loan guarantee for the ailing state-owned Pakistan International Airlines (PIA) for its overhauling and new procurement.

The ECC of the cabinet took the decision in its meeting presided over by the Finance Minister Asad Umar.

“ECC accorded approval for additional guarantees to PIACL of Rs5.6 billion for repair and maintenance of engines and acquisition of related spare parts for operationalising grounded planes,” an official statement said. “The step would strengthen PIACL’s route rationalisation initiatives and add to revenue generation of the national flag carrier.”

The ECC, in consideration of a proposal submitted by the petroleum division, further allowed the Frontier Oil Company to implement the Machike -Tarujabba oil pipeline project. The project, consisting of three sections – Machike-Chak Pirana, Chak Pirana-Rawat and Rwat-Tarujabba – aims at transportation of high speed diesel and motor spirit.

Last year, the ECC approved the summary on 460 kilometers – Sheikhupura to Khyber Paktunkhwa – long oil pipeline wherein Inter State Gas System Limited (ISGS) was assigned to implement the project. ISGS invited bids for the selection of build-operate-own-transfer operators in February this year.

In June, the Oil and Gas Regulatory Authority (Ogra) licenced the Frontier Oil Company, a part of Frontier Works Organization, for the construction of the pipeline.

“The authority has carried out detailed in-house scrutiny of the application on the basis of supporting documents, heard the arguments of the applicant and the interveners during public hearings at Lahore and Peshawar at length as well as on the basis of all available information,” Ogra was quoted as saying in an energy ministry’s document. “This is a first oil pipeline project in which a company has come with strong potential for construction of oil pipeline without seeking any financial and sovereign liability, tax exemption or throughput guarantee from government, which strengthen the commitment to complete the said pipeline project.”

The ECC approved measures proposed by the ministry of national food security and research for uplift of the cotton crop in the country.

ECC asked the food ministry to present, within a month, a plan for strengthening research and development services for various crops with particular focus on cotton.

The food ministry was also asked to submit plan for revitalisation of federal institutions tasked with the responsibility of developing the cotton sector. The ECC also directed the food ministry to expedite efforts for implementing pink bollworm ropes technology to counter the pest.

The meeting further directed the ministry of industries and production to take measures for recovery of cotton cess from textile mills to give impetus to cotton promotion activities, which are to be funded through the cess.

The committee directed the ministries to work out the medium to long term requirement of LNG in the country and present their recommendations on relocation of RLNG plants.