ECC could okay renewable energy policy today

ECC could okay renewable energy policy today

Wednesday, December 06, 2006

* LNG producer pricing policy also expected to be approved
* Price hike of onions, potatoes also to be discussed

By Sajid Chaudhry

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet is expected to approve today (Wednesday) Pakistan’s first renewable energy policy to attract local as well as foreign direct investment in the renewable energy projects.

The tax holiday for a period of over ten years on the investment in renewable energy projects, exemption from sales tax and withholding tax on the import of machinery and other equipments for the renewable energy projects will be considered and approved in the meeting, a government official told Daily Times on Tuesday.

The ECC meeting, which will be presided over by the Prime Minister Shaukat Aziz, will take up a twelve-point agenda relating to the important economic issues. The ECC is expected to consider the renewable energy policy keeping in view the growing needs of energy in the country. The Ministry of Water and Power has submitted the proposed policy aiming at the exploitation of renewable energy resources for economic development.

The ECC is also expected to approve liquefied natural gas (LNG) producer pricing policy to pave the way for the implementation of LNG Policy, which was approved by the ECC some two months ago. A pricing mechanism will be approved for the producers of LNG to facilitate them to invest in this sector with appropriate return on their investment.

A proposal relating gas supply through LNG network to unfeasible areas through private sector will also be taken up in the ECC meeting. At present both THE Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) find it difficult to provide a gas facility to the mountainous areas due to the high cost of a distribution network. The government has already set a target to provide a gas facility to each area of the country by December 2007. The proposal if approved in the meeting will ensure the provision of gas to the remote mountainous areas of the country.

The government has decided to allow additional incentives to medical sector, hotel industry and chain store industry. An incentive package for setting up of state-of-the-art medical centres hospitals and laboratories was announced in the budget to attract medical tourism and on the request of the sector few more incentives will be approved.

Pakistan is set to celebrate ‘Visit Pakistan’ year in the near future to attract the world tourists. In this regard, the hotel industry requires the government’s help and incentives to develop itself for this mega event.

The chain stores industry is gaining strength in the country and few more international players are planning to enter into the Pakistani market. The new incentives would enable both the government as well as the investors to develop this sector on the modern lines.

Allowing exemption of sales tax for public transport sector is also on the agenda. Allocation of gas from Swan and Zarghun South gas fields will be made to the industries. The ECC will take up the issue of agriculture research and the role of Pakistan Agriculture Research Council (PARC). The Ministry of Agriculture will brief the ECC on the subject.

The ECC will also be briefed on the unjustified and historic increase in the prices of Onion and Potatoes in the country. The onion price have increased from Rs 65 per 5 kg to Rs 300 per 5kg as well as the price of potatoes have also jumped from Rs 14 per kg to Rs 25 to Rs 28 per kg in all parts of the country. The government has failed to arrest this price-hike till date and the ECC is expected to take some corrective measures to bring prices of these two essential commodities. The last meeting of ECC was informed that due to the one-week long Eidul Fitr holidays, the prices of onion and potatoes shot up due to the unavailability of transport from the farm to market.

However, this claim of the relevant ministries proved wrong and even the availability of transport after Eid has not impacted the prices. The profiteers are fleecing money from the consumers and these commodities have gone out of the reach of the common man. The prices and availability of other essential items will also be reviewed.

The Ministry of Commerce, State Bank of Pakistan and Central Board of Revenue will brief the ECC on trade, revenue collection and foreign exchange position and effects of the monetary policy.