ECC Gives Green Light to Revolving Fund Account for CPEC Independent Power Producers

The Economic Coordination Committee (ECC) of the Cabinet, in its latest meeting, embraced offers for importing nearly 950,000 tons of wheat, out of which 450,000 tons hail from Russia, all priced at $372 per ton.

This development marks Russia's ascendancy as the foremost wheat supplier to Pakistan this year, making its total contribution a whopping 750,000 tons.

Finance Minister Ishaq Dar chaired the ECC meeting, which also sanctioned a change in the title of the revolving fund account for CPEC Independent Power Producers. The new name, "Pakistan Energy Revolving Account," aligns with the requirements of Chinese financial institutions stipulated in the CPEC framework agreement.

Regarding the wheat import process, the Ministry of National Food Security and Research presented the results of the 7th international wheat tender, which opened on November 30. An offer from a Russian entity on a government-to-government (G2G) basis was also on the table.

After careful consideration of the tender results and the G2G offer, the ECC greenlit the lowest bid from M/s Cereal Crop Trading LLC at a rate of $372 per ton. This deal covers the supply of 130,000 tons at Karachi ports, with shipments scheduled from December 16 to February 8, 2023.

Furthermore, the ECC accepted M/s Prodintorg's G2G offer from Russia at the same rate of $372 per ton. This agreement pertains to the supply of 450,000 tons at Gwadar Port, with shipments running from February 1 to March 31, 2023. It was decided that any additional transportation costs from Gwadar Port would be covered by the Pakistan Agricultural Storage & Services Corporation Ltd (Passco) and subsequently recovered from the provinces upon the release of wheat stocks.

During the meeting, it was disclosed that the Trading Corporation of Pakistan (TCP) issued the 7th wheat tender for 500,000 tons on November 18, attracting bids from nine companies. The most competitive bid, priced at $372 per ton for 130,000 tons, was submitted by Cereal Crop Trading. Two other bidders for over 300,000 tons also secured contracts at the same rate, in accordance with procurement rules.

The estimated cost of this bid at Karachi ports was calculated at Rs 91,121 per ton, or Rs 3,645 per 40kg. Russian Prodintorg also offered the same rate on a G2G basis at either Gwadar or Karachi ports. Both offers had a Monday evening deadline for acceptance.

The ECC was informed that out of the federal cabinet's total allocation of 2.6 million tons for imported wheat, 980,152 tons had already arrived. The TCP had awarded tenders for 685,000 tons, including 300,000 tons via G2G contracts and 385,000 tons through open tenders. With the latest tender of 500,000 tons and the 450,000 tons secured from Russian G2G agreements, Pakistan is set to fulfill its entire wheat import allocation of 2.6 million tons.