ECC to allow wheat export tomorrow

Islamabad : The government has called a meeting of the Economic Coordination Committee (ECC) of the cabinet on Tuesday to allow export of wheat for earning some foreign exchange and disbursement of about Rs1.6bn to Pakistan Steel Mills (PSM) for settlement of minuscule gratuity and provident fund liabilities.

To be presided over by Finance Minister Asad Umar, the meeting is also expected to grant exemption from re-lending policy of the government for funds to be provided as grant to the Pakistan Poverty Alleviation Fund (PPAF) and consider a report on sugarcane price and cost of production of sugar.

Sources said the ECC had in a recent meeting advised prime minister’s adviser on commerce, industries and production Abdul Razak Dawood to work out a plan for export of surplus wheat to boost the country’s declining foreign exchange reserves and free up storage.

The sources said Mr Dawood had held discussions with all the agencies concerned and concluded that substantial surplus wheat stocks were available in the public sector — both with provincial governments and the Pakistan Agricultural Storage and Services Corporation — that were creating storage problems and causing hardship to the farming community because of financial constraints. Therefore, the proposal for export will help boost foreign exchange reserves, reduce storage cost and ease financial problems of farmers.

The sources said a summary would be presented to the ECC seeking export of public sector stocks. The quantities and export mechanism would be determined in the summary that has not yet been circulated to the ministries concerned as required under the rules of business.

The government has already announced increasing wheat support price by Rs50 per 40kg to Rs1,350 in view of complaints that bumper crop last year did not yield early payments and hence good results to the farmers which could discourage them next year.

There are indications that the government may allow the export over one million tonnes of wheat with more than $100 per tonne subsidy.

The sources said the ECC was also expected to approve disbursement of Rs1.6bn provident and gratuity liabilities to deceased employees of PSM even though total liabilities on these two fronts had been estimated at Rs67bn, including Rs52bn provident fund and Rs15bn gratuity.

Another Rs8bn is payable to dealers, suppliers and contractors of PSM, besides huge sums of the National Bank of Pakistan and Sui Southern Gas Company Limited which have already approached the high court for recovery of dues as the company’s total losses and liabilities exceed Rs470bn, including about Rs13bn accrued during the tenure of the present government. The government has not been able to consider a plan for revival of the PSM in three months in office even though it has decided not to privatise it.

In the proposal for payment of gratuity and provident fund to families of the deceased employees after a recent ECC meeting, an additional secretary of the industries ministry holding the additional charge of chief executive of PSM was directed to visit the mill following humanitarian calls from some families.

The acting CEO along with the PSM ad hoc management visited the mill and had meetings with some representatives of the retired and serving employees, besides a marathon session with top management of Hub Power Company.

The ECC is also expected to give exemption from the re-lending policy of the government for funds to the PPAF as grant. Under the existing uniform re-lending policy, the government secures cheap funding for public sector organisations, including non-profit organisations, and re-lends them at 12-14pc mark-up. Given PPAF’s role in social protection, it is always given exemption to ensure cheaper grants to it without building mark-up.