Punjab backs K-P’s protest over Rs4b deduction in power bills

Province terms the move by PESCO constitutional violation

Zafar Bhutta October 10, 2017

ISLAMABAD: The province of Punjab, governed by the Pakistan Muslim League-Nawaz (PML-N) that also has government in the centre, has backed Khyber-Pakhtunkhwa (K-P) in protest against deduction of Rs4 billion at source by Peshawar Electric Supply Company (Pesco) to recover its electricity bills.

Both provinces have termed deduction of funds at source by power distribution companies illegal and have asked the federal government to direct energy companies to stop this practice immediately.

It was a constitutional violation since no adjustment could be made against a tax that became part of the provincial consolidated fund, they said. The issue came up for discussion during a meeting among four provinces of the country.

K-P demands 390% increase in profit for power supply

Finance secretary of K-P, which is governed by the opposition Pakistan Tehreek-e-Insaf, revealed that Pesco had deducted Rs4.11 billion at source in electricity duty, which it should repay to the provincial government immediately.

He argued that electricity duty was being collected by the power distribution companies on behalf of provincial governments, but it was not being deposited in accounts of the provinces.

The secretary called it a case of double jeopardy where deduction was made by two entities for the same claim. The Finance Division was collecting funds at source to recover the electricity bills pending against provincial departments in line with the decision of the Council of Common Interests.

Pesco, on the other hand, is adjusting the same arrears against electricity duty which it collects as collecting agent on behalf of the provincial government.

K-P Chief Minister Pervez Khattak said during the discussion that the Peshawar High Court in its judgment on May 4, 2017 had declared the deduction at source illegal.

A representative of the Power Division, however, emphasised that K-P owed money to Pesco which could not be ignored. However, claims of parties should be reconciled before the settlement of accounts.

Sindh Chief Minister Murad Ali Shah said Sindh was forced to reconcile accounts under duress as electricity duty collected from the consumers was being adjusted against other payments to be made to the province.

The finance minister of Punjab observed that the practice of deduction at source by the distribution companies was illegal and it should be stopped forthwith.

On its part, Balochistan chief secretary suggested that the issue should be examined thoroughly as it had both legal and financial implications.

Federal Board of Revenue Chairman Tariq Pasha was of the view that opinion of the Law Division should be sought as it was a legal matter.

Unpaid electricity duties: Frustrated with Centre, K-P to raise issue at IPCC

According to a recent report of the National Electric Power Regulatory Authority (Nepra), the performance of K-Electric, Quetta and Hyderabad electricity supplying companies was worse whereas Sukkur Electric Power Company featured in the category where recoveries stood low and losses were high.

Nepra considered four parameters for gauging performance of the power distribution companies which included transmission and distribution losses, bill recovery, new connections and safety measures.

K-Electric, Peshawar, Hyderabad, Quetta and Sukkur electricity supplying companies displayed no improvement as they remained in the same position in 2015-16 as they were in 2014-15.

Published in The Express Tribune, October 10th, 2017.

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