Finance Minister Dr Abdul Hafeez Shaikh has taken charge of the obscured issue involving the Rs58 billion paid to the water and power ministry for procurement of oil for power generation, seeking replies from the Ministry of Water and Power and the Ministry of Petroleum and Natural Gas while fearing pilferages.
Sources told The Express Tribune that the money was given to the Ministry of Water and Power for oil procurement for power generation that it paid to the Pakistan State Oil (PSO). The Cabinet sources said that Shaikh was consistently raising the issue and putting some serious questions to be addressed by the Ministry of Water and Power and the Ministry of Petroleum and Natural Gas.
Sources identified two major concerns the finance minister has; firstly some quantity of the oil possibly was being stolen at PSO depots and on the way to power generation plants. Secondly, he suspects that oil was being stolen even from power generation plants, they added.
The spring of the solicitude was that the power generation was lower than the government forecast would be generated with the amount paid for the oil procurement, indicating slippages, according to an official of the Ministry of Finance who spoke on condition of anonymity.
The Express Tribune contacted the key officials of the three ministries. No ne was willing to speak on the record, however the petroleum ministry and the finance ministry confirmed that Shaikh had taken up the matter in the Cabinet and sought replies from his colleagues. The water and power ministry officials were not available for comments.
The sources added that according to the reports most of the quantity was being stolen in the Muzaffargarh area.
Still seeking response, Shaikh raised the following questions, whether the PSO has provided oil to the Ministry of Water and Power equivalent to the amount paid to it? If the power producers were provided furnace oil, what was the amount of electricity being generated? If electricity was generated then it must have been sold to the consumers thus, where is the amount being recovered from the consumers, as this should have been proportionally reflected in the recoveries? The financial accounts of the power sector show discrepancy as the amount is not reflected in them.
Sources close to Shaikh added that until the ministries respond to the questions put forward by the Ministry of Finance, the debate will go on about the power shortfall, required efforts to minimise it and the question over transparent use of taxpayers’ money for power generation. They added that a mechanism should be in place to counter the pilferages.
When contacted, a petroleum ministry official said that the issue was mainly between the finance ministry and the water and power ministry, as according to him, PSO supplied the agreed quantity of oil to the water and power ministry.
However, the Cabinet sources said that the Adviser to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain could not provide a satisfactory response in the Cabinet meetings.
The sources added that in order to avoid such slippages in future, there was an active proposal to set up a monitoring cell, to be headed by a Director General level official. The finance ministry officials said there was also a proposal to link subsidies on account of price differential with the recoveries.
According to the water and power ministry’s statistics, the average recovery ratio of all the power distribution companies is less than 87% and rest of the amount is being added to the arrears every month.
Published in The Express Tribune, September 9th, 2012.
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Theft on such a grand scale isn't done without the knowledge/approval of the people running those agencies/power plant etc -- time for some major housecleaning?