PIA to get Rs 49 billion guarantees: five-year business plan approved by ECC
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February 27, 2013 RECORDER REPORT
The Economic Co-ordination Committee (ECC) of the Cabinet approved on Tuesday an interim ''business plan'' for Pakistan International Airlines (PIA) and directed to issue fresh continuing guarantees to the tune of Rs 49 billion during the ongoing year to meet the critical liquidity condition of the corporation.
Finance Minister Saleem Mandviwalla who chaired the meeting approved five-year business plan with the Ministry of Defence request that Finance Ministry would arrange $46 million with or without government guarantee so that PIA could acquire five narrow body aircraft to replace its ageing fleet. The ECC also approved the proposal for extending loans/guarantees to the tune of Rs 33.5 billion until June 2013 as well as borrowing by the national flag carrier of Rs 13.50 billion from National Bank of Pakistan (NBP) against letter of comfort to be subsequently replaced by government guarantees.
The approved measures/strategy will provide for; (a) the fuel efficiency through fleet modernisation; (b) optimum fleet deployment on the network; (c) introduction of additional frequencies on high demand high yield routes; (d) revenue enhancement and increase in market share; (e) separation of the core airlines business activities from non-core (SBUs); (f) restructuring of PIA liabilities to reduce financial cost.
The ECC approved the margin for oil marketing companies and dealers to be increased by Rs 0.10 per liter on high speed diesel on a summary moved by Ministry of Petroleum and Natural Resources seeking review of OMCs and dealers'' margins for its review on yearly basis.
Another summary was submitted by Ministry of Petroleum and Natural Resources seeking its approval for the recovery of Parco claims from freight pool (IFEM), the ECC directed Ogra to continue with the implementation of earlier ECC decision dated August 16, 2011 and reimburse the price differential to Parco as per existing practice. Petroleum and Natural Resources also moved the summary seeking approval of the ECC to the formula for fixation of ex-refinery price of high speed diesel (HSD).
The ECC approved the proposed mechanism/formula for computation of HSD price due to change of benchmark price from HSD 0.5 sulphur to HSD 0.5 percent Sulphur (Euro-II) which will remain in force till June 30, 2014. The ECC banned the marketing of high speed diesel with Sulphur content more than 0.5 percent (Euro-II) grade in the country. The ECC agreed to the proposal for allocation of first 20 mmcfd gas from SSGC share from new discoveries to 100 MW Nooriabad Industrial Estate power plants as requested by the government of Sindh and subsequent to a summary moved by Ministry of Petroleum and Natural Resources regarding approval for allocation of gas from new sources. The ECC further directed that the allocation of the said gas from SSGC should be placed at the disposal of Ministry of Water and Power till the power plant at Nooriabad Industrial Estate gets operational.
Copyright Business Recorder, 2013
The Economic Co-ordination Committee (ECC) of the Cabinet approved on Tuesday an interim ''business plan'' for Pakistan International Airlines (PIA) and directed to issue fresh continuing guarantees to the tune of Rs 49 billion during the ongoing year to meet the critical liquidity condition of the corporation.
Finance Minister Saleem Mandviwalla who chaired the meeting approved five-year business plan with the Ministry of Defence request that Finance Ministry would arrange $46 million with or without government guarantee so that PIA could acquire five narrow body aircraft to replace its ageing fleet. The ECC also approved the proposal for extending loans/guarantees to the tune of Rs 33.5 billion until June 2013 as well as borrowing by the national flag carrier of Rs 13.50 billion from National Bank of Pakistan (NBP) against letter of comfort to be subsequently replaced by government guarantees.
The approved measures/strategy will provide for; (a) the fuel efficiency through fleet modernisation; (b) optimum fleet deployment on the network; (c) introduction of additional frequencies on high demand high yield routes; (d) revenue enhancement and increase in market share; (e) separation of the core airlines business activities from non-core (SBUs); (f) restructuring of PIA liabilities to reduce financial cost.
The ECC approved the margin for oil marketing companies and dealers to be increased by Rs 0.10 per liter on high speed diesel on a summary moved by Ministry of Petroleum and Natural Resources seeking review of OMCs and dealers'' margins for its review on yearly basis.
Another summary was submitted by Ministry of Petroleum and Natural Resources seeking its approval for the recovery of Parco claims from freight pool (IFEM), the ECC directed Ogra to continue with the implementation of earlier ECC decision dated August 16, 2011 and reimburse the price differential to Parco as per existing practice. Petroleum and Natural Resources also moved the summary seeking approval of the ECC to the formula for fixation of ex-refinery price of high speed diesel (HSD).
The ECC approved the proposed mechanism/formula for computation of HSD price due to change of benchmark price from HSD 0.5 sulphur to HSD 0.5 percent Sulphur (Euro-II) which will remain in force till June 30, 2014. The ECC banned the marketing of high speed diesel with Sulphur content more than 0.5 percent (Euro-II) grade in the country. The ECC agreed to the proposal for allocation of first 20 mmcfd gas from SSGC share from new discoveries to 100 MW Nooriabad Industrial Estate power plants as requested by the government of Sindh and subsequent to a summary moved by Ministry of Petroleum and Natural Resources regarding approval for allocation of gas from new sources. The ECC further directed that the allocation of the said gas from SSGC should be placed at the disposal of Ministry of Water and Power till the power plant at Nooriabad Industrial Estate gets operational.
Copyright Business Recorder, 2013
