ISI comes under fire for ‘not paying electricity bills’

PEPCO chief says power outages can be cut if the receivables are recovered from defaulters.

ISLAMABAD:

Pakistan’s premier spy agency ISI and other government departments came under fire at a meeting of parliamentary panel for not paying electricity bills that have stalled the whole energy sector due to alarming receivables of Rs326 billion against the defaulters.

“The ISI is a rich organisation which has a lot of funds to form political parties but it is not paying power bills,” PML-N parliamentarian Abid Sher Ali said.

In a meeting of the National Assembly Standing Committee on Water and Power, which met on Wednesday with Syed Ghulam Mustafa in the chair, Sher said it was shocking that armed forces were also defaulters of Pakistan Electric Power Company (Pepco) and they owe Rs1.64billion.

Profitable entities like National Highways Authority and National Bank of Pakistan were the defaulters of Pepco, he said, adding that “if a poor man fails to pay electricity bill for a month, then his electricity supply is disconnected immediately”.

He criticised the Distribution Companies (Discos) for not disconnecting the power supply to the defaulters of billions of rupees, including CDA, MNAs Lodges, and armed forces.

The secretary for the ministry of water and power also failed to respond to the question of overbilling of Rs54 billion by Discos.

The parliamentary panel noted with concern that the receivables of the power sector have swelled to a whopping Rs326 billion and directed Pepco to disconnect supply to consumers if they fail to meet a one-month deadline to pay their dues.

Managing Director of Pepco Rasul Khan Masud briefed the committee about the financial constraints in purchase of electricity. According to Masud, Pepco’s receivables stood at Rs326 billion which is equivalent to the total circular debt in the power sector.

He was of view that if the receivables were recovered from the defaulters, Pepco would be able to buy furnace oil and generate more power to reduce power outages.

Masud informed the committee that the receivables from the federal government amounted to Rs1.64billion, whereas non-payment of electricity bills by autonomous government organisations stood at Rs6.41billion.

Water and Power Secretary Imtiaz Qazi informed the committee that power generation companies have been facing financial constraints in purchase of furnace oil because they have to pay in advance for opening Letter of Comfort for oil imports.

However, Qazi suggested receiving electricity bills from the defaulters in instalments because, in his view, it would not be possible for many government departments to pay huge amounts in one go.

KESC Director Abdul Rauf informed the committee that his company has been managing the power shortfall by exercising 6-hour outages a day. According to Rauf, the KESC receivables from the defaulters amounted to Rs24billion, out of which the city district government owes Rs5billion and the city water board is a defaulter of Rs16 billion.

Rauf said that the electricity generation through furnace oil cost Rs18 per unit while power generated by gas costs only Rs6 per unit. He complained that the government has instructed the SSGC to supply minimum of 276 million metric cubic feet of gas to the KESC but the SSGC has been supplying only 120 mmcfd gas to the KESC, therefore KESC has to rely on furnace oil for electricity generation.

Published in The Express Tribune, December 1^st, 2011.