December 4, 2021

New plan for monthly production & purchase for electricity

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ISLAMABAD: the Economic Coordination Committee (ECC) of the Cabinet today approved Monthly Production Plan and waiver of minimum 66% Take-or-Pay commitment in Power Purchase Agreement(s) (PPA) & Gas Supply Agreement(s) (GSA) of three RLNG based public sector power plants.

Federal Minister for Finance, Revenue, Industries and Production, Muhammad Hammad Azhar, chaired the meeting.

Power Division presented a summary regarding waiver of minimum 66% Take-or-Pay commitment in Power Purchase Agreement(s) (PPA) & Gas Supply Agreement(s) (GSA) of three RLNG based public sector power plants namely Quaid-e-Azam Thermal Power Plant, Balloki Power Plant and Haveli Bahadur Shah Power Plant.

These amendments would envisage submission of a Monthly Production Plan (MPP) as a binding on the power purchaser and the power seller wherein the power purchaser shall be entitled to submit demand requirement as needed, at least seventy five days before the start of each such month, which will be finalized by the System Operator and Operating Committee under the PPA.

The concept of a monthly delivery plan for deliveries of gas under the GSA, has been paired with the monthly schedule as provided under PPA. The MPP will come into effect from the year 2022.

After seeking input from relevant stakeholders, the Committee approved the summary and termed the concept of Monthly Production Plan (MPP) as a cost-effective solution, enabling the power and gas purchasers to make requisite purchases in line with actual requirements instead of following a fixed arrangement.

Power Division also presented another summary proposing amendment to the Facilitation Agreement and Amendment to the GoP Guarantee Agreement with KAPCO.

It included the proposal that the project may be withdrawn from the Privatization Commission and entrusted to Private Power and Infrastructure Board (PPIB).

After due deliberation, the Committee approved the summary, in principle, subject to formal vetting by the Law Division.

Secretary Commerce presented a summary for withdrawal of Customs Duty on import of Cotton Yarns under PCT 5205, 5206 and 5207 till 30th June, 2021. The Committee approved the withdrawal of Customs duty to ensure smooth supply of cotton and cotton yarns to the value-added industry, while bridging the gap between domestic production and overall demand for the inputs.

The ECC also approved a technical supplementary grant for Finance division amounting to Rs.11.7 billion as the share of the federal government for the establishment of 4 mother and child hospitals in Punjab.