TUESDAY JULY 24: Finance Ministry unable to settle Rs 383 billion power sector dues

ISLAMABAD: The Finance Ministry has been unable to make any progress with respect to settlement of Rs 383 billion power sector dues against provinces, AJK, autonomous bodies and private sector, it was learnt. Sources revealed that the stalemate continued between Pepco and provinces on the issue of their outstanding arrears as receivables claimed by Pepco are highly exaggerated.
Thus, the Federal Adjuster Office at Finance Division is struggling to move ahead on the issue after various meetings with provinces and other stakeholders to minimise the circular debt in the power sector that is compounding the energy crisis. Pepco's payables have escalated to Rs 422 billion and receivables have peaked at 383 billion which is exclusive of the Rs 87 billion on account of tariff differential for last fiscal year.
Sources in the office of the Federal Adjuster revealed that Sindh government and Karachi Electricity Supply Company (KESC) have to pay Rs 55 billion each to Pepco, giving a grand total of Rs 110 billion. Federal Adjuster of Finance Ministry has been unable to persuade them to pay their dues.
He added that the role of Federal Adjuster was of an arbitrator and an agreement between the two parties was essential for any settlement. The official said that actual problem was that Sindh government maintained that the receivables claimed by Pepco were exaggerated.
In reply to a question about the outstanding electricity dues against other provinces, he said there was no dispute in electricity arrears against Punjab government and it had begun clearing its arrears. There are some problems with Khyber Pakhtunkhwa (KPK) and Balochistan but these are expected to be resolved soon. He said the Federal Adjuster had also suggested to the power sector to involve the administrative machinery of provincial and local governments for recovery of Rs 171 billion from private sector. Pepco, he said, should avoid dispute with the provinces for relatively small recoveries and try to take the provincial governments on board for recovery of large amounts due from the private sector.