PHOTO: REUTERS
During the proceedings, the ministry told the apex court that the principal amount of dues stood at Rs457 billion, while on delayed payments the companies had been required to pay surcharge at the rate of Karachi Interbank Offered Rate plus 4, which translated into another Rs77.7 billion.
The government had promulgated a presidential ordinance last August for an out-of-court settlement of the Rs420 billion GIDC dispute with industries.
The ordinance allowed the general industry, fertiliser sector and CNG sector to pay 50% of their outstanding bills within 90 days in advance and secure 50% discount on future bills provided they withdrew their court cases.
The government said it expected net receipts of Rs150-Rs160 billion under the proposed amnesty provided all the stakeholders availed the offer. However, the government after receiving strong disapproval from various circles withdrew the ordinance within days of its promulgation.
It then approached the apex court through the attorney general requesting for an early hearing of the GIDC case. The ministry, while submitting the report on Wednesday said that till June 30 2019, a total of Rs752 billion was accrued on account of GIDC.
An amount Rs295 billion was collected and deposited by the gas companies in accordance with the GIDC Act 2015 into the government exchequer leaving an outstanding balance of Rs457 billion.
The report stated that the gas companies were responsible for billing and collection of the cess from gas consumers and its onward payment to the government exchequer. The petroleum ministry cited the protracted litigation against applicability of GIDC and circular debt as reason for non-recovery of GIDC amount by the gas companies.
Due to various lawsuits filed before the superior courts regarding the imposition of GIDC, a total of Rs420 billion had been pending as on June 30, 2019. The amount held under the circular debt is Rs36 billion.
The report stated that the outstanding amount of Rs164 billion was recoverable from the fertiliser sector, while Rs170 billion from the power sector and Rs123 billion from the CNG sector.
It is stated that 92% of the outstanding amount was subject to the settlement of court cases. As for the issue of circular debt, the receivable amount in the shape of cost of gas and GIDC along with applicable interest would be settled once the circular debt issue is resolved.
The report specified that in the recent past, the government had issued Sukkuk bonds worth Rs200 billion to clear a part of the circular debt and was now again considering issuance of another Sukkuk bonds worth Rs250 billion for the purpose.
The strategy to clear the circular debt is being implemented by the Power Division.
COMMENTS
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ