Clarification

Apropos a news item "60 paisa per unit increase in power tariff approved" carried by Business Recorder on Friday, the Finance Division has clarified that the news item has given an erroneous impression that the finance minister had approved a 60 paisa per unit increase in power tariff.
"It may be mentioned that the Finance Minister has not taken any decision to increase the power tariffs". According to the clarification, decisions on tariff adjustments are taken by the relevant Ministry, in consultation with all the stakeholders and after approval of the competent forum. The spokesman of Ministry of Water and Power has also claimed that no such decision has been taken.
"It is clarified that National Electric Power Regulatory Authority (NEPRA) had determined tariff of Distribution Companies which was notified in February 2007. NEPRA's determination envisaged an average increase of 33% in tariff but Government of Pakistan keeping in view the social aspects and impact of increase in various segments of the society, decided to pass on only 10% increase to the consumers and the remaining amount is being subsidised by the Federal Government and paid to the Discos/Pepco accordingly," the clarification concluded.
MUSHTAQ GHUMMAN ADDS: "The financial woes of the Water and Power Development Authority (Wapda), power distribution companies (Discos) and generation companies (Gencos) and National Transmission and Dispatch Company (NTDC) are the result of an inter-circular debt. Not only are the federal and provincial governments, FATA and KESC the main defaulters of Discos, Wapda is unable to pay off billions of rupees to Pakistan State Oil (PSO) and Independent Power Producers (IPPs) that it has been owing to them for the last several months.
"Since inter-circular debt is being arranged by the Finance Ministry for the utility on the basis of an established mechanism, the latter requested Caretaker Finance Minister Dr Salman Shah, Secretary Finance Ahmad Waqar and other officials of corporate finance to use their influence in this regard.
"Consequently, the Finance Minister chaired a meeting on December 1, 2007 at Wapda House, Lahore. The meeting was attended, among others, by Wapda Chairman, Shakeel Durrani, and Pepco Managing Director Munawar Baseer Ahmad.
"To help ease off Discos debt servicing situation, the participants of the meeting concurred with each other in finance minister's proposal that the case of 10 percent increase in tariff be put up immediately by the Ministry of Water and Power before the Prime Minister for approval.
"According to prevalent tariff slabs, the minimum increase would be 25 paisa per unit for those consumers who use up to 100 units a month while 60 paisa increase would be for those industrial consumers whose tariff is Rs 6 per unit." Our reporter stands by every fact and figure he wrote.