ISLAMABAD, Feb 26: The Economic Coordination Committee (ECC) of the cabinet on Monday took “serious note of a sudden increase” in the prices of wheat flour and cement and said it would not tolerate the unjustified and artificial price hike.
A meeting of the ECC presided over by Prime Minister Shaukat Aziz, however, did not discuss whether or not an action should be taken against market manipulators for fleecing people of billions of rupees in a few days.
"The ECC did not discuss anything like that," said Dr Ashfaq Hassan Khan, Economic Adviser with the Ministry of Finance.
The ECC approved incentives for special economic zone for Chinese investors in Punjab; gave a go-ahead to the Fatima Fertiliser to set up a plant based on Qadirpur gas; and set a mechanism for provision of about 6,500 acres of land for the new Gwadar International Airport.
Briefing reporters after the meeting, Dr Ashfaq said: "There was no justification for this increase in flour prices, and the prime minister took very serious note of the situation."
The flour prices had increased by about Rs4 per kg till weekend.
He said there were sufficient stocks of 2.43 million tons of wheat in the country and a very good wheat crop was expected to enable the government to achieve 22.5 million tons of wheat output target for the current year.
The principal secretary to prime minister was directed to write to the four chief ministers to get in touch with respective flour mills’ associations to handle the situation, he said. The prime minister would soon meet the chief ministers "because the government cannot allow flour mills to fleece the consumers," he said.
The economic adviser said the ECC had noted that a sudden increase in cement prices from an average of Rs229 on February 1 to Rs271 in just eight days "was not based on demand and supply or other economic reasons.”
The ECC described it as ‘absolutely unjustified’, he said and quoted the prime minister as saying: "We will never tolerate an artificial increase in cement prices.”
He said the ECC had directed the ministry of industries and production to monitor the cement prices closely and regularly so that the prices could be brought down to an ‘acceptable’ level.
The prime minister also directed the Monopoly Control Authority to evaluate reasons for the increase in the cement prices, he said.
LAND BANK: Dr Ashfaque said a plan to create a ‘land bank’ for the utilisation of state land under the control of various government agencies for making it available to investors was deferred because the minister and the secretary of the housing ministry which originated the summary were not available.
However, three senior government officials told Dawn that Housing Secretary Abdul Rauf Chaudhry, who had moved the summary, was kept waiting for more than three hours outside the venue of the ECC meeting and then informed about the deferment of his proposal.
Sources said the principal secretary to prime minister was asked to collect inputs from various agencies possessing state land, like ministries of defence, railways and ports.
CHINA-PAK ECONOMIC ZONE: The meeting approved a fiscal and infrastructure incentives package for the establishment of economic zones, including the China-Pakistan Economic Zone (CPEZ).
Dr Ashfaq said China planned to set up eight special economic zones around the world and the one near Kalashah Kaku on Motorway over an area of 3,000 acres would be the first of the series.
He said the incentives package would be exclusive for Chinese investors and Pakistan-China joint ventures with Chinese share of at least 40 per cent.
The Pakistan-China five-year plan, of which the Free Trade Arrangement was a part, was meant for balancing bilateral trade at $15 billion after five years. The package -- initially designed for the joint venture of Ruba Group Pakistan and Haier Group of China -- offers import of plant, machinery, equipment and accessories for zone development, and projects in the zone are fully exempted from duties and taxes.
He said the CPEZ would also enjoy corporate tax holiday for a period of five years for projects in the zone from the date of starting commercial operations. This would also be available to the developers of the zone, he said, adding that existing initial depreciation allowance of 50 per cent would be considered enhanced to 100 per cent.
The normal incentives for exports as available to projects established anywhere in the country would be applicable to exports from the projects in the zone.
According to Dr Ashfaq, the federal government/agencies will provide gas, electricity and other utilities at the zero-point of zones while captive power generation will also be allowed to developers of the zones. Similarly, the provincial governments will construct approach roads up to the zero-point of the zone while concerned agencies will establish their offices within the zones to provide one-window facility. The management of the zone will provide office accommodation along with the utilities.
The dry port facility would be provided in the zone to facilitate imports and exports while the Punjab government would facilitate Haier-Ruba Group to acquire land for the SEZs, he said. The federal government would pay for the land to be acquired for the SEZs, he added.
TOMATO PASTE PLANTS: The ECC was informed that tomato prices had reduced, and touched Re1 per kg in Thatta. The ministries of industries and food and agriculture were, therefore, directed to encourage the private sector to set up tomato paste industries.
GWADAR AIRPORT: The ECC decided that about 6,500 acres of land would be provided for the development of the Gwadar International Airport by the China Harbour Engineering Company on turn-key contract of $70 million.
About 4,300 acres of land was currently available.
The ECC directed the deputy chairman of the Planning Commission to finalise a revised land price in consultation with the Balochsitan governor from the earlier rate of Rs157,000 per acre.
Dr Ashfaq said the estimates brought forward for big planes by the Ministry of Defence were thought of as too ambitious, and the deputy chairman would come up with new rates and plane specification within two weeks.
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