The federal government has reportedly expressed serious reservations against the management of K-Electric for not providing the record of tariff subsidy for the last eight years for audit purposes, well informed sources told Business Recorder. K-E has not finalised Gas Supply Agreement (GSA) with Sui Southern Gas Company Limited (SSGCL) and Power Purchase Agreement (PPA) with Central Power Purchasing Agency - Guaranteed (CPPA-G) despite the fact that the PPA expired in January 2015 because the federal government is showing a considerable leniency towards the power utility for political reasons.
The sources said Corporate Audit & Evaluation Wing of Auditor General recently wrote a letter to the government inviting the latter's attention towards the agreed Terms of Reference (ToRs) between the Ministry of Finance, Ministry of Water and Power and Auditor General Office with respect to financial audit of K-Electric for claims from 2004-05 to 2012-13.
Recently, the Auditor General's Office informed the Public Accounts Committee (PAC) that the management of K-E has refused to provide its record for audit and the attitude of the utility towards the audit team was rude. A team of K-E led by Tayyab Tareen was seen in the Ministry of Water and Power discussing issues related to load shedding in the summer, revision of Implementation Agreement (IA) and budgetary allocations for 2016-17 including outstanding 4 per cent capping dues.
"We have discussed outstanding 4 per cent capping dues amounting to Rs 6 billion. Our claim is already acknowledged by the Water and Power Ministry in its letter to Finance Ministry but the issue is still unresolved," said a source close to Director Finance and Regulations KE Aamir Ghaziani.
KE, sources said has also approached Additional Secretary (Corporate Finance) Ministry of Finance, in which the power utility has sought dues for Gas Load Management Programme (GLMP). The power utility, source said, has claimed that GMPL claim amounting to Rs 343 million relates to the supply of Furnace Oil (FO) by Pakistan State Oil (PSO) to KE for the period from November 3 to November 7, 2010. The mechanism for supply and payment of differential by GoP was approved by the Economic Co-ordination Committee (ECC) of the Cabinet on November 4, 2010.
According to the KE, it was decided that the price differential will be paid by the GoP, verified claims duly signed by all concerned parties and audited by A.F. Ferguson & Co were forwarded to the Finance Ministry by the Water and Power Ministry. However, the payment is still outstanding at GoP's end.
KE, sources said, has further claimed that GMLP claim amounting to Rs 2.275 billion relates to the supply of FO by the PSO from April 12 to May 5,2011. The mechanism for supply and payment of differential by GoP was approved by the ECC on May 7, 2011. According to the decision, the price differentials will be paid by GoP. However, payment is still outstanding at the GoP's end and so far nothing has been released. KE has requested the Finance Ministry to allocate Rs 2.618 billion in federal budget for KE's outstanding GLMP on priority basis.
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