The government has put restrictions on the power distribution companies (Discos) against keeping collected amount of the bills in their accounts, as per the new mechanism approved by the Prime Minister, official sources told Business Recorder.
For this purpose, the Discos will open escrow accounts in only 'A' rated commercial banks for maintaining uninterrupted inter-company flow of funds. "Discos will henceforth transfer the entire collected amount on daily basis to their respective escrow accounts. The collected amount will remain with the escrow agent and in no way will be controlled by the companies," an official of Islamabad Electric Supply Company (Iesco) said.
Sources said that the Finance Ministry would also extend the facility of creditline, or overdraft, to the needy Discos to meet their cash shortfall, in case of emergencies, with the condition that their heads and board of directors would be held responsible for any wrongdoing.
They said that the escrow account maintainer would retain its percentage share, and transfer the balance to Discos, on daily basis.
These decisions were taken at a recent meeting chaired by Water and Power Secretary Ashfaq Mahmood wherein standard operating procedure, time line and proposed responsibilities of Central Power Purchase Agency (CPPA) were discussed threadbare, sources said.
According to the modus operandi, jointly devised by the Ministry of Water and Power and Pakistan Electrical Power Company (Pepco), the meter reading of all interconnections for the import of energy during the month by the CPPA would be taken on the last day of the month.
Sources said that Wapda has already transferred staff to the newly formed CPPA and now Finance Ministry was being reminded to appoint its Managing Director.
The Pepco would provide rationale for the payment formula of 78 percent to escrow account and 22 percent to Discos.
The CPPA/escrow agent would provide Discos only operational invoices, in the first instance, while GST payment invoices would be issued on 15th of each month.
Payment of electricity duty invoices, TV fees invoices and withholding tax, CPPA including IPPs, Gencos, hydel, and NTDC invoices would also be made on 15th of each month.
The Discos have been asked to furnish subsidy invoices to the Ministry of Water and Power by 5th of each month which would be forwarded to Finance Ministry by 10th and escrow agent by 20th of each month.
The set of instructions and statements will be forwarded to the escrow agents for release of money to CPPA and Discos after reconciliation of the figures, they added.
Sources said that the efficiency of a company would solely depend on smooth operation of an escrow account.
Both CPPA and Discos have to work out monthly schedule of payments and the set of instructions for the escrow agent within one week and submit it to the Chief Executive Officer (CEO) of the Pepco and Ministry of Water and Power for finalisation, sources said, adding that no other, except the CPPA, would be given the right of first charge (of money transfer).
For the transition period, till its independent status, the reformed CPPA would be looked after by Wapda, with complete 'ring fencing' of its financial liabilities, sources added.
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