ISLAMABAD: The government is likely to extend concessional tariff to eligible consumers of Sundar Industrial Estate and Lasbela Industrial Estate at par with Zero Rated Industrial (ZRI) consumers, sources told Business Recorder.
Sharing the background, sources said, in order to promote five export sectors, namely textile, carpets, leather, sports and surgical goods, Economic Coordination Committee (ECC) has already approved concessionary electricity tariff US Cents 9/KWh all- inclusive for FY 2021-22.
Federal Budget of FY 2021-22 also reflects an amount of Rs.26 billon for ZRI consumers' subsidy.
According to the Power Division, a number of Special Economic Zones/industrial States have been established in the country. However Sundar purchases electricity on bulk tariff from Lahore Electric Supply Company (Lesco) and Lasbela Industrial Estates (LIEDA) purchase electricity on bulk tariff from K-Electric and the two are quite different from others as both Industrial Estates are buying electricity from Discos and KE on bulk tariff (B4 -Tariff) and supply to its consumers at their own tariff i.e. (NEPRA tariff (B1 B2, B3, B4, Commercial/Distribution/Margin fee).
Sundar Industrial Estate is governed by Punjab Industrial Estate Development Management Company (PIEDMC) of Government of Punjab and purchases electricity from LESCO under industrial B-4 tariff having sanctioned load of 104 MW. The Sundar Industrial Estate is involved in further distribution of electric power to its approximately 550 industrial consumers under B-2/8-3 tariff under its own 132 KV grid system. There is no mechanism to extend the subsidy to these consumers. Further the Industrial Estate does not have any distribution license despite lapse of more than 15 years since it applied for grant of distribution licence to NEPRA.
Power and gas: ECC may extend concessional tariffs to industry today
M/s Style Textile (Pvt.) Ltd. Lahore, consumer of Sundar Industrial Estate filed a petition in the Lahore High Court for extending zero rated facility at par with the export oriented industrial consumers of LESCO. On the court directions, the matter was referred to NEPRA but the decision is still awaited. However, LESCO has extended zero rated facility to seven consumers established at Sundar Industrial Estate since Oct-2020 and granted benefit of Rs.118.338 million.
Lasbela Industrial Estates (LIEDA) is an autonomous body established under an Ordinance No. IX of 1984; Industries & Commerce Department of Government of Balochistan, LIEDA had set up different Industrial Estates in the district Lasbela (Balochistan). One such Estates is located at Tehsil Hub district Lasbela, where it was also involved in distribution of electric power to various industrial units after getting one-point supply from K-Electric.
Pursuant to Section-20 of the NEPRA Act, LIEDA submitted an application for the grant of distribution licence on July 20, 2017 for its 50MW distribution facility located at Hub Industrial and Trading Estate (HITE) district Lasbela. However, K-Electric opposed grant of distribution licence to LIEDA on the premise that: (i) LIEDA was set up under the Ordinance, which does not permit it to engage in distribution of electricity activities; (ii) LIEDA is not the company incorporated under Section-24 of the NEPRA Act; (iii) LIEDA does not fulfil the eligibility criteria mentioned under the NEPRA (Supply of Electric Power) Regulations 2015 as it does not have its own 132 KV grid station; and (iv) the area for which LIEDA has applied for the grant of distribution licence is part of its exclusive service territory.
KE argues that LIEDA does not meet the criteria to get the benefit of concessional tariff approved for zero rated industrial consumers issued on January 01, 2019. Further, KE also advised LIEDA to enter into an O&M agreement with them or hand over its distribution network to K-Electric for getting the benefit of concessional tariff at par with other consumers of K-Electric.
KE says that the facility of concessionary tarif@9US cent/kwh could not be extended to the Zero Rated Industrial consumers located in both industrial Estates. In order to resolve the issues, a number of meetings were convened by the Power Division with the participation of all concerned stakeholders. In the most recent meeting held under the chairmanship of Secretary Power Division on June 18, 2021 it was decided to devise a mechanism in consultation with all stakeholders for granting concessional tariff to eligible consumers of current and prospective Industrial estates as GoP cannot deny rights/ benefit subsidy to any
export-oriented Industry owing to its locality or area.
The sources said, pursuant to the directions, PEPCO in consultation with relevant stakeholders has devised a mechanism. The proposed mechanism will formulate a strategy for granting the concessional tariff to the eligible consumers of Sundar / LIEDA Industrial Estates and prospective Industrial Estates as well as also give guidelines for granting concessional tariff or any other prospective subsidy scheme, only to be available to eligible and legitimate consumers ie. which are verified by the FBR/ Ministry of Commerce.
Power Division is to submit the proposal to the ECC for consideration of mechanism for granting concessional tariff to the eligible zero-rated Industrial Consumers of Sundar/ LIEDA Industrial Estates and prospective Industrial Estates, after it receives comments from concerned stakeholders.
Copyright Business Recorder, 2021
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