Major defaulters: NAB to be engaged in making power sector recoveries

Distribution companies continue supplies despite unpaid bills of Rs375b.

ISLAMABAD: Power distribution companies, which have a big shortfall in recoveries, are facing the accusation that they have continued to supply electricity to major defaulters despite the piling up of unpaid bills to Rs375 billion over the past many years.

“The government has decided to ask the National Accountability Bureau (NAB) to take action against the people involved in continuing electricity supply to influential consumers and ensure the recovery of bills,” an official said.

Economic managers of the country came to know about the matter in a meeting of the Economic Coordination Committee (ECC) of the cabinet on December 16.



According to sources, Ministry of Water and Power Secretary Younis Daga told the ECC that the private sector had to pay Rs375.181 billion to power distribution companies, of which Rs137.144 billion had accumulated over the last one to three years. It was proposed that the recovery of receivables should be outsourced to private companies.

For the past 12 months, Rs97.93 billion had been outstanding, for which the power distribution companies were tasked with making the recoveries.

The secretary also briefed the ECC about the outstanding amount the government had to pay the independent power producers (IPPs). The amount payable to the IPPs stood at Rs216.8 billion on November 30 this year.

Recently, after negotiations with the Ministry of Water and Power, the Independent Power Producers Advisory Council withdrew the notice of default on sovereign guarantees served on the government for a long delay in clearance of dues.

The ECC directed the Ministry of Water and Power to explore the possibility of engaging private contractors for the recovery of more than one-year-old bills from consumers of the private sector through NAB.

The water and power secretary also gave the breakdown of government and private sector payables. Among regional governments, a major chunk, estimated at Rs66.6 billion, is owed by the Sindh government, Azad Jammu and Kashmir has to pay Rs42.758 billion and the Khyber-Pakhtunkhwa government owes Rs19.9 billion.

In the last meeting of the Council of Common Interests, an inter-provincial body, it was agreed that provinces would reconcile their outstanding electricity bills within 60 days.

PSO in dire straits

The interrupted power supply to the defaulters has pushed Pakistan State Oil (PSO) close to financial default. Power companies owe PSO Rs200 billion for fuel supply and the state-run oil marketing company is finding it increasingly difficult to clear bills of domestic and international oil suppliers.

Even the Ministry of Finance has refused to come to its rescue, arguing it has no extra financial resources available.

According to officials, PSO’s overall receivables have touched Rs224 billion. Of these, Pakistan International Airlines (PIA) has to pay Rs12.4 billion.

Published in The Express Tribune, December 26^th,  2014.

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