ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Wednesday approved a set amended rules and incentives to assure prospective foreign investors tapping its upstream petroleum sector of generating higher profits and less hassle in doing investment.
The ECC also approved a proposal by the commerce division for declaration of the erstwhile zero-rated sectors, namely Textiles (including jute), carpets, leather, sports and surgical goods as ‘export oriented sectors, which includes Textiles, Carpets, Leather, Sports and Surgical Goods’.
The ECC, chaired by adviser to Prime Minister on Finance and Revenue Abdul Hafeez Shaikh, approved amendments to a host of rules governing the regulation of upstream petroleum sector to foster ease of doing business and encourage investment in the sector. “The approval to amend nearly 18 rules dealing with approvals, extensions, renewals, revocations and other ancillary matters covered under the Pakistan Onshore Petroleum (Exploration and Production) Rules, 2013, and their subsequent incorporation in relevant Rules governing the regulation of the upstream petroleum sector, was granted at a meeting of ECC,” a statement said.
The statement said the ECC was told by the energy ministry that previous “rules (Pakistan Onshore Petroleum (Exploration and Production) Rules, 2013) were unduly stringent and had never been objectively updated to capture the latest regulatory and best business practices with a progressive approach to regulate the energy sector and encourage investment”.
The government had tasked petroleum industry and private consultants, supervised by an Energy Task Force, to amend the rules “to incorporate clear concept of deemed approval, putting timelines for some proposals and elimination of some approvals as well as revision of monthly reporting requirements to quarterly ones and flexibility in conditions for extensions/renewals to accommodate various types of circumstances which are not covered under the existing rules”. “The amendments would be notified after formal vetting of the law division and would become applicable to the new as well as existing licences and leases and the holders of such leases would be allowed to opt to adopt the changes through the signing of supplemental agreements to the PCA or any other instrument to be finalised in consultation with the law and justice division,” the statement said.
The ECC also approved incorporation of similar amendments in Pakistan Petroleum (Production) Rules 1949, Pakistan petroleum (Exploration and Production) Rules 1986, Pakistan Petroleum (Exploration and Production) Rules 2001 and Pakistan Onshore Petroleum (Exploration and Production) Rules, 2009.
The ECC also took up a proposal by Federal Board of Revenue (FBR) and approved a technical supplementary grant of Rs30 billion for the redemption of bonds issued by the ‘FBR Refund Settlement Company Limited’ and payment of sales tax refunds.
The ECC also considered another proposal from the ministry of Information Technology and Telecommunication for extension of government sovereign guarantee in respect of Telephone Industry of Pakistan, for a further period of two years from September 16, 2019 to September 15, 2021 and payment of loan amounting to Rs2.150 million, inclusive of mark-up of Rs 1.030 billion, for smooth process of revival plan of the TIP.
The ECC discussed the proposal in detail and constituted a seven-member high-level committee headed by adviser to Prime Minister on Commerce, Textile, Industry and Production Abdul Razak Dawood to review the proposal and submit its recommendations to ECC within two weeks.
The ECC also considered and approved for execution of amendment to the implementation agreements in relation to Thal Nova Power Thar Private Limited and Thar Energy Limited after its meeting held on November 8, 2019 had approved a proposal by the power division for amending the implementation agreements in relation to both the firms by increasing the time period from 400 to 490 days for the exercise of government’s right to terminate both the projects as the amendment did not involve any financial impact either on the government the consumers.
(This news/article originally appeared in The News on November 28th, 2019)