In all four cases, the principal installment payments will be deferred for a further period of 2 years from the date of execution of fresh facilities. The ECC approved a proposal of the Ministry of Water and Power regarding an existing Term Finance Facility for Power Holding (Private) Limited, to restructure the facility by extending the tenure of the facility from 7 to 10 years, including extension in grace period from 3 to 6 years.
The ECC also approved the Standard Implementation Agreement (IA) (with amendments) for transmission line projects under Policy Framework for Private Sector Transmission Line Projects, 2015 and TSA for HVDC Transmission Project (660 kV Matiari-Lahore). Sources said that in the summary Water and Power Ministry also stated that the same proposal for seeking approval of the ECC on Standard IA for transmission line project 2015 and project specific transmission services agreement was submitted on June 29. 2017. However, the summary was deferred and Water and Power Ministry was directed to review IA for private sector transmission line projects 2015 and project specific transmission services agreement, holistically, in consultation with Law Division, FBR and Nepra and then resubmit the proposal for consideration of the ECC after reaching a consensus.
A series of meetings have taken place between the representatives of Water and Power Ministry and FBR. After deliberation and discussion on all issues pointed out by the FBR earlier a consensus was developed between all stakeholders and all issues were resolved. The ECC was stated that Law Division has already given its concurrence on these agreements subject to approval of the PPIB Board while NEPRA also endorsed the terms and conditions as stipulated in IAs and Transmission Service Agreements (TSA) to be signed with the Independent Transmission Company (TC) subject to commitment that these should be consistent to NEPRA tariff determination and special purposes transmission licenses terms.
Water and Power Ministry stated that as per transmission line policy 2015, the ITC is liable to withhold and pay to the government as full and final income tax liability of its contractors @6.5 percent and 7 percent tax from corporate and non-corporate contractors, respectively. However, present applicable tax rates under Income Tax Ordinance 2001 have been increased and it was agreed between FBR and Ministry of Water and Power that rates of withholding tax for corporate and non-corporate contractors should be as per Income Tax Ordinance, 2001.
As per Policy the reduced custom duly of 5 percent rate on local manufacturing appearing in part 1 of schedule of Customs Act, 1969 should not be applicable for the period of three years on import of machinery and equipment and other capital goods imported for new transmission lines under the valid contract (s) or letter of credits and total C&F value of such imports for the Project is US$50 million or above. The FBR and Ministry of Water & Power also agreed that FBR will implement the Policy provision after ECC approval in this regard.
The policy provides that sales tax on import of machinery, equipment and other capital goods if not exempted under the Sixth Schedule of the Sales Tax Act, 1990 will be charged @5% and shall be non-adjustable/non-refundable. The FBR will issue an appropriate SRO to give effect to the aforementioned policy provision.
The ECC was requested that the Project specific TSA for HVDC Transmission Project as prepared and finalized by National Transmission and Dispatch Company (NTDC)) may be approved and Board of PPIB may be authorized to make and approve any project specific amendments required in the Standard IA during negotiations and/or prior to its execution, provided government obligations or liabilities are not increased. The ECC was also urged that that Board of PPIB and NTDC may further be authorized to make and approve any amendments in the approved Standard IA & the Project Specific TSA respectively required to comply with Nepra''s Tariff Determination, directives and/or approvals.
Copyright Business Recorder, 2017