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Rs15 bn Nandipur project cost further jumps to Rs58.4 bn
The Rs15 billion Nandipur scam has taken a new turn as the cost of the project has further increased to Rs58.4 billion and a huge payment of $80 million has already been made to the Chinese company. Originally, the revised price was Rs57 billion.
This has been disclosed in the ECC meeting that was held with Finance Minister Ishaq Dar in the chair here on Wednesday evening. A short briefing was given in the meeting about the probe report of General (retd) Shahid, former Member Monitoring in the Planning Commission.
The report covers the reasons and causes in the cost escalation of different components of the Nandipur Combined Cycle Project, which was now estimated to cost of Rs58.4 billion.
The ECC meeting was told that this tentative cost may undergo a change subject to the actual costs increased on the Insurance Duty Construction Rates, dollar fluctuation, taxes, cost of inclusion of gas component and damage to equipment, if any. Expenditures will be made on actuals after validation and special monitoring arrangements will be made by the Ministry of Water and Power. It was also decided that the Ministry of Water and Power might share the report with Transparency International.
Ex-Managing Director of Pepco M Munawar Baseer, who has written a letter to Supreme Court smelling the Rs15 billion scam in the revised cost of the project, told The News that the report of General Shahid has not been shared with him. However, General Shahid had summoned me when he was in the process of probing the matter.
Mr. Shahid had told me that the Chinese company has been given $80 million under the head of repair and replacement of equipment, Baseer said. I severely objected to giving this huge amount in this head saying that NesPak has already submitted the Progress report No3 with the apex court that discloses that there exists no damage to the equipment that was lying at the Karachi Port. So giving a huge amount to the Chinese company is not justified.
Baseer said if the cost of the project has further increased to Rs58.4 billion, then he would himself challenge General Shahids report in the Supreme Court.
A press release, however, says that the ECC in the meeting also imposed a 30-day ban on the import of gold. In the meeting, it was observed that one of the initiatives taken by the government to diversify the exports had been to promote the export of value added gold jewelry. For this purpose, currently there are special schemes in operation to facilitate jewelry exporters whereby they are able to import gold without payment of any duty on the condition that this gold is re-exported after converting it into value added jewelry. These schemes governed by SRO 266(I)/2001, dated May 7, 2001 of the Ministry of Commerce are referred to as the Entrustment and the Self-Consignment schemes.
Recently, however, there have been serious apprehensions that these schemes for duty free import of gold are being abused by some unscrupulous elements and the national interest is being damaged. That is to say that instead of the duty free gold being used for the purpose it was intended, it is being smuggled to India.
In this regard, it is noteworthy that in the recent months the import of gold into Pakistan, under these schemes has seen an enormous surge which is highly abnormal. During the period January to June, 2013, gold worth Rs92.970 billion was imported compared to Rs19.132 billion for the same period in 2012. This trend has become even more alarming since in the first 26 days of July 2013, the import of gold under these schemes was to the tune of Rs52.549 billion.
In this context, India increased the import duty on gold from 2% to 6% in January 2013 and to 8% in April-May 2013. Indian press reports also indicate that the seizures by Indian authorities of smuggled gold increased by as much as 365% in April-June 2013 as compared to the similar period of 2012. This difference in import duties seems to have provided the incentive for increased duty free imports in Pakistan and smuggling to India.
In view of these developments, the Government of Pakistan has taken cognizance of the apparent abuse of these schemes and decided to take some immediate steps to prevent further damage to the national economy. It has been decided to impose a short-term temporary ban of 30 days on the duty free import of gold under these special schemes. This ban is purely temporary and is intended to allow the government sufficient time to re-examine the operation of these schemes with a view to speedily removing any loopholes and deficiencies. The objective of the government is to quickly restore these schemes in an improved form so that genuine exporters of gold jewelry are facilitated in the best possible way to contribute to the national objective of increasing the exports.
The ECC decided that operation of SRO 266(1)/2001 dated 7th May 2001 may be suspended with effect from 31.7.2013 for a period of 30 days. The Ministry of Commerce would take administrative measures to implement this decision in letter and spirit.
In compliance of the directions of the ECC, the Ministry of Planning and Development submitted a report on the reasons and causes in the cost escalation in different components of the Nandipur Combined Cycle Project, which was now estimated to cost of Rs58.4 billion.
The ECC also noted that the matter was subjudice in the Supreme Court and a comprehensive report had also been submitted to the prime minister in the matter.
In order to encourage the export of processed meat and provide by-products such as hides, bones, blood and tallow to many downstream industries in the country, the ECC decided to impose a ban on the export of live animals with effect from October 1, 2013.
The ECC directed the Ministry of Petroleum and Natural Resources to carry out a study to establish a basis for revision of margins of oil marketing companies and dealers within 45 days and submit it for its consideration. The Oil and Gas Regulatory Authority (Ogra) has been asked to assist the Ministry of Petroleum in the matter.
The ECC approved the export of 30,000 tons of wheat to Iran as a part of a barter trade agreement with Iran. Iran exports electricity in exchange.
The cabinet secretary informed the meeting that since the assumption of power by the present government, 23 decisions have been taken by the ECC of which 12 have been implemented while the remaining are under various stages of implementation.
The Secretary Aviation Division informed the ECC that Rs6.100 billion had been paid to vendors out of Rs6.89 billion released by the Ministry of Finance and an amount of Rs789 million had been paid to the Exim Bank as part of repayment of loans.
The secretary Aviation Division also informed the ECC that the accounts between PIA and FBR had been reconciled on account of federal excise duty collected by PIA. Also, a separate account is now being maintained since July 1, 2013 for collection of federal excise duty and that an amount of Rs250 million has been deposited with the FBR so far.
The ECC directed the Ministry of Aviation to present a viable plan to overcome the annual loss of Rs3.3 billion being incurred by PIA. This plan should include breakdown of the present losses as well as the way forward.
The ECC also approved the renewal of GOP guarantee for running the finance facility for Rs2.0 billion for Pakistan Steel Mills up to 4.1.2014.
Senator Ishaq Dar informed the members of the ECC that the prime minister had restored the status of the ECC as it existed on October 1999. This decision was taken by the prime minister after a summary was moved for the purpose.
The secretary industries informed the ECC that sales of UtilitySstores touched Rs13 billion during the first 10 days of Ramazan and was likely to cross Rs25 billion. The ECC was also informed that the Ministry of Industries was contemplating to computerise its 5,800 Utility Stores and warehouses throughout the country.
The ECC reiterated that no exception would be allowed to the PPRA rules on import of Liquefied Natural Gas or award of contract for construction of terminals for storage and regasification, to ensure transparency.
The minister of petroleum and natural resources was directed to brief the media and dispel any misperception in this regard by sharing the entire process of purchase of LNG. Due process and transparency would not be compromised in any way, resolved the ECC.
Rs15 bn Nandipur project cost further jumps to Rs58.4 bn - thenews.com.pk
suo motu wala kana kidher hai?
The Rs15 billion Nandipur scam has taken a new turn as the cost of the project has further increased to Rs58.4 billion and a huge payment of $80 million has already been made to the Chinese company. Originally, the revised price was Rs57 billion.
This has been disclosed in the ECC meeting that was held with Finance Minister Ishaq Dar in the chair here on Wednesday evening. A short briefing was given in the meeting about the probe report of General (retd) Shahid, former Member Monitoring in the Planning Commission.
The report covers the reasons and causes in the cost escalation of different components of the Nandipur Combined Cycle Project, which was now estimated to cost of Rs58.4 billion.
The ECC meeting was told that this tentative cost may undergo a change subject to the actual costs increased on the Insurance Duty Construction Rates, dollar fluctuation, taxes, cost of inclusion of gas component and damage to equipment, if any. Expenditures will be made on actuals after validation and special monitoring arrangements will be made by the Ministry of Water and Power. It was also decided that the Ministry of Water and Power might share the report with Transparency International.
Ex-Managing Director of Pepco M Munawar Baseer, who has written a letter to Supreme Court smelling the Rs15 billion scam in the revised cost of the project, told The News that the report of General Shahid has not been shared with him. However, General Shahid had summoned me when he was in the process of probing the matter.
Mr. Shahid had told me that the Chinese company has been given $80 million under the head of repair and replacement of equipment, Baseer said. I severely objected to giving this huge amount in this head saying that NesPak has already submitted the Progress report No3 with the apex court that discloses that there exists no damage to the equipment that was lying at the Karachi Port. So giving a huge amount to the Chinese company is not justified.
Baseer said if the cost of the project has further increased to Rs58.4 billion, then he would himself challenge General Shahids report in the Supreme Court.
A press release, however, says that the ECC in the meeting also imposed a 30-day ban on the import of gold. In the meeting, it was observed that one of the initiatives taken by the government to diversify the exports had been to promote the export of value added gold jewelry. For this purpose, currently there are special schemes in operation to facilitate jewelry exporters whereby they are able to import gold without payment of any duty on the condition that this gold is re-exported after converting it into value added jewelry. These schemes governed by SRO 266(I)/2001, dated May 7, 2001 of the Ministry of Commerce are referred to as the Entrustment and the Self-Consignment schemes.
Recently, however, there have been serious apprehensions that these schemes for duty free import of gold are being abused by some unscrupulous elements and the national interest is being damaged. That is to say that instead of the duty free gold being used for the purpose it was intended, it is being smuggled to India.
In this regard, it is noteworthy that in the recent months the import of gold into Pakistan, under these schemes has seen an enormous surge which is highly abnormal. During the period January to June, 2013, gold worth Rs92.970 billion was imported compared to Rs19.132 billion for the same period in 2012. This trend has become even more alarming since in the first 26 days of July 2013, the import of gold under these schemes was to the tune of Rs52.549 billion.
In this context, India increased the import duty on gold from 2% to 6% in January 2013 and to 8% in April-May 2013. Indian press reports also indicate that the seizures by Indian authorities of smuggled gold increased by as much as 365% in April-June 2013 as compared to the similar period of 2012. This difference in import duties seems to have provided the incentive for increased duty free imports in Pakistan and smuggling to India.
In view of these developments, the Government of Pakistan has taken cognizance of the apparent abuse of these schemes and decided to take some immediate steps to prevent further damage to the national economy. It has been decided to impose a short-term temporary ban of 30 days on the duty free import of gold under these special schemes. This ban is purely temporary and is intended to allow the government sufficient time to re-examine the operation of these schemes with a view to speedily removing any loopholes and deficiencies. The objective of the government is to quickly restore these schemes in an improved form so that genuine exporters of gold jewelry are facilitated in the best possible way to contribute to the national objective of increasing the exports.
The ECC decided that operation of SRO 266(1)/2001 dated 7th May 2001 may be suspended with effect from 31.7.2013 for a period of 30 days. The Ministry of Commerce would take administrative measures to implement this decision in letter and spirit.
In compliance of the directions of the ECC, the Ministry of Planning and Development submitted a report on the reasons and causes in the cost escalation in different components of the Nandipur Combined Cycle Project, which was now estimated to cost of Rs58.4 billion.
The ECC also noted that the matter was subjudice in the Supreme Court and a comprehensive report had also been submitted to the prime minister in the matter.
In order to encourage the export of processed meat and provide by-products such as hides, bones, blood and tallow to many downstream industries in the country, the ECC decided to impose a ban on the export of live animals with effect from October 1, 2013.
The ECC directed the Ministry of Petroleum and Natural Resources to carry out a study to establish a basis for revision of margins of oil marketing companies and dealers within 45 days and submit it for its consideration. The Oil and Gas Regulatory Authority (Ogra) has been asked to assist the Ministry of Petroleum in the matter.
The ECC approved the export of 30,000 tons of wheat to Iran as a part of a barter trade agreement with Iran. Iran exports electricity in exchange.
The cabinet secretary informed the meeting that since the assumption of power by the present government, 23 decisions have been taken by the ECC of which 12 have been implemented while the remaining are under various stages of implementation.
The Secretary Aviation Division informed the ECC that Rs6.100 billion had been paid to vendors out of Rs6.89 billion released by the Ministry of Finance and an amount of Rs789 million had been paid to the Exim Bank as part of repayment of loans.
The secretary Aviation Division also informed the ECC that the accounts between PIA and FBR had been reconciled on account of federal excise duty collected by PIA. Also, a separate account is now being maintained since July 1, 2013 for collection of federal excise duty and that an amount of Rs250 million has been deposited with the FBR so far.
The ECC directed the Ministry of Aviation to present a viable plan to overcome the annual loss of Rs3.3 billion being incurred by PIA. This plan should include breakdown of the present losses as well as the way forward.
The ECC also approved the renewal of GOP guarantee for running the finance facility for Rs2.0 billion for Pakistan Steel Mills up to 4.1.2014.
Senator Ishaq Dar informed the members of the ECC that the prime minister had restored the status of the ECC as it existed on October 1999. This decision was taken by the prime minister after a summary was moved for the purpose.
The secretary industries informed the ECC that sales of UtilitySstores touched Rs13 billion during the first 10 days of Ramazan and was likely to cross Rs25 billion. The ECC was also informed that the Ministry of Industries was contemplating to computerise its 5,800 Utility Stores and warehouses throughout the country.
The ECC reiterated that no exception would be allowed to the PPRA rules on import of Liquefied Natural Gas or award of contract for construction of terminals for storage and regasification, to ensure transparency.
The minister of petroleum and natural resources was directed to brief the media and dispel any misperception in this regard by sharing the entire process of purchase of LNG. Due process and transparency would not be compromised in any way, resolved the ECC.
Rs15 bn Nandipur project cost further jumps to Rs58.4 bn - thenews.com.pk
suo motu wala kana kidher hai?
