K-P agrees to pay Rs18b from net hydel profit

Ministry to take up increase in K-P’s hydel profit in CCI for approval

ISLAMABAD:

The government of Khyber-Pakhtunkhwa has agreed to the deduction of its Rs18 billion electricity dues from net hydel profit of the province, officials say.

K-P has to pay Rs20.47 billion in electricity bills to power companies. Among provinces, Sindh stands on top as it has to clear outstanding bills amounting to Rs72.11 billion. Punjab owes Rs4.9 billion and Balochistan Rs4.53 billion.



“K-P government is willing to pay Rs18-billion electricity bills out of its net hydel profit, but Sindh is facing problems in clearing the dues that stood at over Rs70 billion,” it was told in a recent meeting of the Cabinet Committee on Energy chaired by Prime Minister Nawaz Sharif.

K-P claims a principal amount of Rs47 billion in net hydel profit from the federal government and both have agreed to settle the matter. Net hydel profit is the compensation for contribution to the national grid of the hydroelectric power plants running in K-P.

The National Electric Power Regulatory Authority (Nepra) has increased the price of hydroelectric power, which leads to a rise in the net hydel profit of K-P from Rs6 billion to Rs18 billion per annum.

According to the officials, the Ministry of Water and Power and the K-P government have decided to take up for discussion the increase in net hydel profit before the Council of Common Interests (CCI) - an inter-provincial body - for final approval.

The federal and K-P governments have also agreed that they will jointly draw up a comprehensive plan for determining the period and volume of the outstanding amount of net hydel profit. A decision on this will be taken after bringing all stakeholders on board.

Participants of the cabinet committee meeting told the prime minister that the Ministry of Water and Power had encountered problems in recovering electricity bills from the government of Sindh.



Earlier, the ministry had powers to deduct at source the dues of provinces, but in 2013, the CCI decided that only 25% deduction would be allowed and that too after reconciliation of data.

“The federal adjuster may ask the Sindh government to clear 25% of pending bills immediately and the remaining after 30 days, in case the province does not finalise the reconciliation of data,” the premier was told.

The pending electricity bills of Punjab farmers also came up for review in the energy committee huddle. The power ministry revealed that outstanding bills of Punjab farmers had piled up to more than Rs30 billion and their recovery posed a big challenge.

Earlier, the government had asked the ministry to go slow on the recovery of arrears until December 2015, however, the ministry feared that any further delay would turn these dues into bad debts.

Published in The Express Tribune, April 3^rd, 2016.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.