NA panel averse to more power surcharges

Committee defers asks power ministry to submit a proper justification for surcharges

Our Correspondent October 28, 2020


The National Assembly Standing Committee on Power expressed serious reservations on the Nepra amendment bill and castigated the government that by imposing surcharges, the power division was trying to find an easy way out to pay the circular debt.

With a plan to impose more surcharges, officials informed a committee meeting, with Chaudhry Salik Hussain in the chair, that the outstanding dues of the Independent Power Producers (IPPs) against the government had swelled to Rs 1,000 billion, while the power theft had soared to Rs35 billion annually.

During the proceedings, Committee Chairman Chaudhry Salik Hussain noted that the plan under which the legislation was being carried out to impose uniform tariff and surcharge had been not clear. He directed the power division to bring a clear plan.

The additional power secretary told the committee that surcharges were being levied on the consumers under the proposed Nepra amendment act to control the circular debt. “These surcharges will be levied to cover the debt obtained for power projects and power sector,” he added.

“Are these surcharges will help in circular debt reduction or further increase the burden on the consumers,” asked Chaudhry Salik. “The circular debt has reached to Rs 2,300 billion. It is feared that even with the imposition of surcharges it may further increase,” he added.

The additional power secretary said the IPPs’ outstanding dues had reached Rs1,000 billion, beside electricity worth Rs35 billion was being stolen annually. “To control the circular debt, electricity theft needs to be controlled,” he said.

The additional power secretary also informed the committee that the officials concerned were negotiating the circular debt with International Monetary Fund (IMF) and were in the process of finalising its figure.

The committee expressed serious reservations on the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Bill, 2020, and said that by imposing surcharges the ministry “is trying to find an easy way out to pay the circular debt”.

Chaudhry Salik and other members of the committee said that there should be sufficient justification approving to the proposed legislation. They also pointed out deficiencies in the bill, observing that imposition of surcharges should be done by the provinces.

The committee said that loss-making distribution companies (Discos), which had played havoc with the country, should be handed over to the provinces. They also said the ministry should ensure that no more waiver was given to the Discos.

Chaudhry Salik also drew the attention of the committee towards the report of the auditor general of Pakistan, who has pointed out huge irregularities, mismanagement, misappropriation and embezzlement, amounting to Rs3 trillion in the power division.

The AGP, he said, had put question mark to the sustainability of the power sector under the current state of affairs, governance, shortcoming and weak financial and administrative controls. He held previous as well as the incumbent government equally responsible for pending quarterly adjustments.

Regarding surcharges, the committee asked the ministry to come up with a “master plan”, to address the question whether it could make the power sector more efficient, and can the ministry in a period of two to the three years would be able to lower the tariff at par with other countries of the region.

The committee deferred the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Bill, 2020 with the direction that the ministry should get its act together and submit a proper justification for the imposition of surcharges.

The committee also deferred the Pakistan Penal Code (Amendment) Bill, 2019, as members from Sindh showed reservations and opined that it would open doors for corruption and promote the culture of registering fake first information reports (FIRs).

The Committee also resolved to call the high-ups of the Karachi Electric (KE) to answer the complaints of legislators. The meeting was attended by MNAs Amir Dogar, Sher Akbar Khan, Saifur Rehman, Lal Chand, Saira Bano, Riaz Pirzada, Shazia Marri, and senior officers of the relevant departments.


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