Islambad, AJK at odds

Federal government and the government of AJK failed to reach compromise over payment of outstanding electricity dues.

ISLAMABAD: The federal government and the government of Azad Jammu and Kashmir (AJK) have failed to reach a compromise over the payment of outstanding electricity dues owed by the latter.

According to sources privy to ongoing negotiations between the two sides, differences also persist on a proposed increase in the power tariff charged to the independent territory.

Government sources assert that AJK has delayed payment of arrears amounting to over six billion rupees to various power providers. It has been learnt that Rs4.2 billion is owed to the Islamabad Electric Supply Corporation while the remaining amount is owed to other electricity providing companies.

The AJK government is currently being charged Rs2.59 per unit of electricity under an agreement that was signed in 2003. However, the federal government has asserted that the cost of electricity generation and transmission has increased exponentially since that agreement and that rates must be revised in accordance to these increases in cost.

It has pointed out that at present AJK is receiving subsidies worth billions of rupees which are unsustainable and are also partially responsible for perpetuating the circular debt issue.

The government had earlier proposed an increase in the electricity tariff for AJK to Rs7.75 per unit.

However, the AJK government has so far maintained payments at the rate of Rs2.59 per unit and insists that any increase of more than 30 paisas per unit will not be acceptable to it.

Published in The Express Tribune, August 22^nd, 2010.