Tariff differential subsidy: finance ministry unable to clear power sector dues

The Finance Ministry has been unable to pay Rs87 billion to the power sector on account of tariff differential subsidy, an official told Business Recorder on Tuesday. The official said Pepco''s payable had risen to Rs422 billion and its receivables against various public and private sector organisations touched Rs383 billion, excluding Rs 87 billion against the Finance Division on account of tariff differential.
Sources said that ongoing negotiations with provinces for settlement of outstanding electricity dues through federal adjuster had not been successful. According to sources, the Sindh government was a major hurdle in this regard.
A host of hearings have so far been held at the Finance Ministry with representatives of provincial governments after the Prime Minister ordered to resolve the problem of electricity arrears against provinces and other public sector departments through federal adjuster.
According to official, receivables against the Sindh government and Karachi Electricity Supply Company (KESC) reached Rs110 billion with Rs55 billion, respectively. He said that if they paid their dues, financial problems of Pakistan State Oil (PSO) could be resolved. PSO has been demanding immediate release of Rs32 billion.
Sources said that receivables against Punjab stood at Rs11 billion, followed by Rs6.27 billion of Balochistan, Rs8 billion Azad Kashmir and autonomous bodies, Rs5 federal government. Payables by the Khyber Pakhtunkhwa (KPK) to the Pepco stood at Rs1.79 billion. Non-payment of electricity dues to Pepco by public and private sector is among major reasons for the power sector''s inability to fully utilise their installed capacities of about 19,166-megawatt. Subsequently, massive power cuts had been hurting the country both socially and economically, added the sources.
Another official said that power sector''s roblems would remain unresolved without the support of provincial and local governments against electricity theft.
The Cabinet Committee reportedly directed distribution companies to disconnect electricity connections of defaulters without any discrimination and to this effect priority be fixed from top to bottom.
In case of defaulting organisations, disconnection of power at their respective head offices must be ensured along with defaulting premises. The Distribution Companies had also been directed to provide a list of all defaulters estimated at over 250,000 for monitoring of action by the committee.