Tag: government approval

  • Govt approves Rs5.72 hike in basic power tariff to offset sector losses

    Govt approves Rs5.72 hike in basic power tariff to offset sector losses

    The federal cabinet has approved a significant increase of Rs5.72 per unit in the basic power tariff through a circular decision. This decision, finalised via a circulation summary, aims to address financial challenges within Pakistan’s power sector.

    Sources familiar with the matter confirmed that the proposal will now be forwarded to the National Electric Power Regulatory Authority (NEPRA) for uniform implementation across the board.

    According to official sources, the Power Division will formally submit an application to NEPRA to initiate the process of implementing the revised tariff structure.

    This adjustment, slated for the fiscal year 2024-2025, is scheduled to come into effect starting July 1, 2024. The approved increase will raise the average basic electricity tariff from Rs29.78 to Rs35.50 per unit.

    A recent report from NEPRA revealed that Pakistan’s power sector incurred a staggering Rs403 billion loss during the fiscal year 2022-2023.

    The report, which assessed the performance of power distribution companies, including K-Electric, highlighted that nine out of these companies failed to achieve full recovery targets. It attributed the financial strain partly to inefficiencies such as line losses and inadequate revenue collection.

    Furthermore, the report underscored that these companies did not fulfill their electricity procurement obligations as per assigned quotas, leading to deliberate load shedding practices. This situation has exacerbated financial losses, amounting to billions in national revenue.

  • Cabinet Committee grants approval for UAE to build cargo terminal at Karachi Port

    Cabinet Committee grants approval for UAE to build cargo terminal at Karachi Port

    The Cabinet Committee on Inter-Governmental Commercial Transactions has granted approval for the proposed collaboration between Pakistan and the United Arab Emirates (UAE) aimed at establishing a bulk and general cargo terminal at East Wharf, Karachi Port.

    Before the agreement is finalised, it will undergo ratification by the federal cabinet, following which the governments of Pakistan and UAE will officially sign it. The draft agreement, which has been endorsed by the cabinet committee, encompasses various essential aspects.

    These include the terms and conditions of the agreement, the cost estimation for the terminal’s reconstruction, the terminal’s expected lifespan, its maximum cargo handling capacity, the dimensions of the quality wall, royalty details, land rent per square meter in the bonded areas, storage charges, dock labour charges, upfront payment arrangements (adjustable and non-adjustable), as well as the quantum and type of investment involved.

    The Cabinet Committee on Inter-Governmental Commercial Transactions meeting, where the draft agreement received approval, was chaired by Finance Minister Senator Mohammad Ishaq Dar on Monday.

    The committee’s decision was based on a summary presented by the Ministry of Maritime Affairs, which outlined the proposed government-to-government agreement between UAE and Pakistan for fostering cooperation in the development of the bulk and general cargo terminal at Karachi Port’s East Wharf. The agreement operates under the framework of the Inter-Governmental Commercial Transaction Act 2022, as indicated by the Ministry of Finance.

  • Govt gives nod to massive power tariff hike to meet IMF demands

    Govt gives nod to massive power tariff hike to meet IMF demands

    In a recent late-night development, the federal cabinet of Pakistan has given its approval for a significant increase in the electricity base tariff. This decision comes as part of the country’s efforts to meet the conditions set by the International Monetary Fund (IMF).

    According to the information provided by insiders, the federal government has decided to raise the basic power tariff for various consumer categories, with the increase ranging from Rs3 to Rs7.5 per unit.

    The National Electric Power Regulatory Authority (Nepra) played a pivotal role in this decision, as the cabinet approved the tariff hike based on Nepra’s recommendation.

    For non-protected residential consumers who use 1 to 100 units, the proposed increase is Rs3 per unit, which will elevate the current cost from Rs13.48 per unit to Rs16.48 per unit.

    Similarly, residential consumers using above 700 units might see a significant increase of Rs7.5 per unit, raising the existing rate from Rs35.22 per unit to Rs42.72 per unit.

    The government has now referred the matter to Nepra, which will conduct a public hearing to gather input and make a final decision before releasing an official notification. If approved, the new tariff will take effect from July 1.

    It is noteworthy that Nepra had already granted the federal government an increase of Rs4.96 per unit in the base electricity tariff on July 14.

    This move aligns with Prime Minister Shehbaz Sharif’s commitment to IMF Managing Director Kristalina Georgieva, assuring full adherence to the agreement made with the global lender, leaving no room for any violation.