The Karachi Electric Supply Company (KESC) on Saturday paid around Rs 15 billion dues to the Water and Power Development Authority (Wapda), out of Rs 28 billion which it owed to the latter. According to official sources, the remaining Rs 13 billion dues would be cleared later.
They said that at least Rs 2 billion was paid in cash while Rs 13 billion was adjusted in the subsidy which the KESC had claim against the government in terms of tariff differential. However, company sources could not say how the said amount was managed and paid to the Authority as the company was already facing financial crunch.
The adjustment of Rs 13 billion was also not clear as according to sources, the company was to receive only about Rs 2.5 billion from the government on account of subsidy. However, according to data made available to Business Recorder in December 2009, KESC, as "consumer tariff subsidy" had claimed that the government owed at least Rs 15.63 billion to the company beside Rs 6.80 billion consumer tariff subsidy/ loss of revenue.
The government, according to the data, also owed Rs 3 billion and Rs 1.40 billion in terms of Financial Implementation Project (FIP) loans and its interest respectively, to KESC. The Federal Board of Revenue, it said, was to pay Rs 5.76 billion to the company as general sales tax (GST) refund.
KESC was also demanding of the government Rs 0.06 billion, Rs 0.09 billion and Rs 0.14 billion in terms of adjustment of additional surcharge against GST subsidy for the exempted categories of consumers (July-September 2009), agricultural subsidy for private tube-well consumers of Balochistan (July to November 2009) and all other strategic customers (covered under the IA) respectively, it added.
Beside the huge amount of subsidy the company was also demanding of the Karachi Water and sewerage Board (KWSB), City District Government Karachi and other miscellaneous federal/provincial departments/bodies the dues of Rs 8.92 billion, Rs 2.81 billion and Rs 2.19 billion respectively. However, sources claimed, the amount reportedly paid to Wapda were the subsidy, demanded by KESC as tariff differential claim.
They said the claimed subsidy by the company had no justification as the government had already allowed KESC to increase the electricity tariff for three times last year. The company had increased the tariff in the months of April, July and October 2009.
It is to mention here that Wapda was demanding of the KESC dues on the bases of thermal generation of power while the public utility was insisting to fix the dues as per hydral generation rate, which later, with the federal government''s mediation, was agreed to fix on average bases.
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