ISLAMABAD: The government has approved import of 400,000 tons of urea to meet its shortage in the remaining period of Rabi and Kharif season 2009-10 and sell it through government mechanism involving a subsidy of about Rs600 per bag.A decision to this effect was taken on Tuesday at a meeting of the Economic Coordination Committee (ECC) of the Cabinet presided over by Prime Minister Yousaf Raza Gilani.

The meeting also allowed issuance of Rs17 billion sovereign guarantees to hire a company for dredging of Port Qasim navigational channel and directed speedy import of 1.25 million tons of sugar.

The meeting decided that about 100,000 tons of urea be imported immediately by the Trading Corporation of Pakistan (TCP) through Karachi port for the current Rabi crop while remaining 300,000 tons of the commodity would be imported subsequently for distribution through National Fertiliser Corporation for Kharif 2010.

The urea import has been necessitated because of a delay in the commissioning of a large fertiliser plant by three-four months. Sources said Industries Minister Mir Hazar Khan Bijarani has taken notice of the project commissioning and has required his ministry to investigate reasons for the delay.

Retail price of local urea stands at about Rs770 per bag while imported urea would cost around Rs1,350 per bag, leaving a gap of Rs580 per bag that would be picked up by the government. International urea prices currently hovered around $300 per ton and the government would import the commodity, possibly from Saudi Arabia and Qatar.

An official statement said the ECC also approved providing sovereign guarantees for a Rs17 billion project for deepening and widening of Port Qasim navigational channel, for which a consortium of Chinese Exim Bank and Fortis Bank has offered about $150 million buyer’s credit.

Mainly because of rising shipping needs and declining port capacity, the deepening and widening of the navigational channel has become crucial to attract larger ships, which could not dock at present. The project, when completed would be able to handle ships with 14-metre draught.

The prime minister directed the authorities to ensure implementation of the cabinet decision for import of 1.25 million tons of sugar so as to ensure smooth supply of white sugar in April.

The ECC was informed that sufficient stocks of sugar were available and the government would be able to purchase sugar at the most competitive rates which would reflect a saving of $180 million.

On the recommendations of the Tariff Anomalies Committee, the ECC approved imposing five per cent regulatory duty on the import of pigment thickener (PCT 3906.9030) and acrylic thickener (PCT 3906.9040).

In order to discourage export of waste and scrap of aluminium and copper and promote export of value-added products manufactured from locally available raw materials, the ECC approved imposing 25 per cent regulatory duty on the export of waste and scrap of aluminium and copper along with bars, rods, ingots, slabs and billets, etc made of these materials.

On a presentation by Ministry of Industries and Production on National Fertiliser Strategy, the meeting set up a ministerial committee to make final recommendations about the fertiliser policy.

While discussing post Balancing, Modernisation and Replacement (BMR) concession for feed gas for Pak American Fertiliser Limited and allocation of 16 mmcfd gas from SNGPL system for plant expansion, the ECC decided that the deadline for signing of gas sales agreement as given in fertiliser policy 2001 be extended to June 30, 2012.

The committee also directed the Ministry of Petroleum and Natural Resources and the Ministry of Industries and Production to review the cross subsidy on fertiliser feed gas price provisions under Fertiliser Policy 2001.

The ECC also directed the State Bank of Pakistan to ensure in time availability of commodity finance by the consortium of banks to enable Passco to start procurement directly from farmers with effect from October 1 in Sindh and November 1 in Punjab.

The committee also directed that Passco should buy a maximum of 500 maunds of rice from each farmer after verification of land record by the provincial governments to ensure authenticity of the growers.