ECC Approves Re-Rolling of $142 Million Loan for Roosevelt Hotel


The Economic Coordination Committee (ECC) of the cabinet on Friday approved the re-rolling of a $142 million loan for Roosevelt Hotel, New York.

Finance Minister Shaukat Tarin presided over the meeting, which discussed a number of summaries, including the Aviation Division’s summary seeking approval for extending the date of the National Bank of Pakistan loan for expenditures and to pay the salaries of the employees of Roosevelt Hotel.

According to the summary obtained by ProPakistani, the principal amount of the loan of $141 million and payment of $35.5 million in four quarterly installments was to take effect from December 31, 2021. However, the Pakistan International Airlines Corporation Limited (PIACL) informed ECC of its inability to pay up the principal amount of the loan, markup, and dues payable on behalf of Roosevelt Hotel Corporation (RHC). The summary of the PIACL sought an extension of two years for clearance of the principal amount and the markup incurred. The committee discussed and approved the proposal with directions to Aviation Division to prepare a roadmap for the permanent solution of the issue.

ECC discussed and approved a summary tabled by the Cabinet Division on proposals of Naya Pakistan Housing and Development Authority (NAPHDA) for revision of customer pricing and mark-up subsidy period under Tier-I of Government mark-up subsidy scheme for low-cost housing (for NAPHDA projects) and inclusion of Housing Finance Companies (HFCs) in G-MSS for housing finance with directions that there should be no direct involvement by the commercial banks in NAPHDA projects.

ECC also approved a summary submitted by the Ministry of Communication for extension in the timeline given to the National Highways Authority for preparation of commercially viable business plan till June 2022. NHA’s debt restructuring would be linked with the outcome of the business plan. ECC directed the Ministry of Communication to submit a monthly progress report regularly and prepare Business Plan well before the deadline.

The committee also gave assent to the proposal of the Ministry of Communication seeking a special allocation of additional funds of Rs. 8,000 million (Rs. 4000 million as upfront Viability Gap Funding (VGF) and Rs. 4000 million for overhead costs) against approved government’s share for the PSDP project, “Sialkot (Sambrial)-Kharian Motorway Project (SKMP)”.

The Finance Division tabled a summary on the proposal of the State Bank of Pakistan (SBP) for incentives for exchange companies against the surrender of foreign exchange in the interbank market. Under the proposal, exchange companies may be provided cash incentives of Rs. 1 against surrender of each dollar mobilized from inward remittances. Exchange companies are required to surrender 100 percent of inward remittances in the interbank market. The ECC approved the proposal with direction to review the model to achieve further improvement.

The committee discussed and approved the summary tabled by the Ministry of Industries and Production regarding gas rate for operations of Sui Northern Gas Pipelines Limited (SNGPL) based plants i.e. Fatima Fertilizer (Sheikhupura plant) and Agri-tech for the period October 2021 to January 2022, and to keep at PKR 839/MMBTU (with variable contribution margin @186/bag).

The meeting also approved a summary submitted by the National Engineering and Scientific Commission for issuance of the government’s sovereign guarantee for the National Electronics Complex of Pakistan (NECOP) project worth $5.82 million for batch-IV and $26.15 million for batch –V in favor of CETC, Beijing, China to pay back the loan in seven years, including two years grace time.

The Petroleum Division, Ministry of Energy, submitted a summary for issuance of sovereign guarantee amounting to Rs. 24.19 billion in favor of M/s Habib Metropolitan Bank Ltd and a syndicate of two banks led by United Bank Limited (UBL) for the remaining tenor of the loan and letter of comfort in favor of lender banks for new financing agreement with respect to pipeline infrastructure development project LNG-II. The Economic Coordination Committee approved the proposal.

ECC considered and approved the summary submitted by the Ministry of Maritime Affairs for grant of relaxation to Pakistan National Shipping Corporation (PNSC)’s 19 subsidiary companies from the applicability of the Public Sector Companies (Corporate Governance Rules).

The committee approved, in principle, a summary tabled by the Ministry of Economic Affairs on Global Transition from LIBOR to Alternate reference rates with directions that reference rates to be adopted in the future may be submitted to ECC for approval.

The meeting discussed in detail the summary presented by the Ministry of Industries and Production for price revision of non-subsidized goods and continuation of untargeted subsidy after December 31, 2021. After deliberation, the ECC allowed the Ministry of Industries and Production the continuation of subsidy on the five essential commodities for only the month of January.

ECC approved Technical Supplementary Grant worth Rs. 90 million for 1.2 MGD reverse Osmosis desalination (ROD) Plant at Gwadar (Chinese Grant).

The committee also approved TSG worth Rs. 14.621 million for purchase of spare parts for helicopter maintained by Pakistan Rangers Sindh.

The meeting also approved TSG for the release of funds Rs. 431.880 million to project implementation letter of HQ Frontier Corps (South) KP, Dera Ismail Khan funded by Bureau of International Narcotics & Law Enforcement – Pakistan (INL-P).

The committee approved TSG worth Rs. 751.486 million in favor of Ministry of Energy, Power Division, out of development expenditure of Ministry of Planning, Development & Special Initiatives.

On a summary for provision of funds for life-saving drugs to Afghan people, presented by Ministry of National Health Services, Regulations & Coordination, the Committee advised the Ministry of National Health Services, Regulations & Coordination to review its budget and demand be met by re-appropriation of funds within the budget.

Federal Minister for National Food Security and Research Syed Fakhar Imam, Federal Minister for Planning, Development and Special Initiatives Asad Umar, Federal Minister for Industries and Production Makhdum Khusro Bakhtyar, Federal Minister for Energy Hammad Azhar, Federal Minister for Privatization Muhammad Mian Soomro, Federal Minister for Railways Muhammad Azam Khan Swati, Federal Minister for Maritime Affairs Syed Ali Haider Zaidi and federal secretaries attended the meeting.

Source: Pro Pakistani