Power sector receivables: Islamabad agrees to write off Rs 50 billion against Sindh government

The federal government has agreed to write off Rs 50 billion against Sindh government aimed at settling chronic issue of power sector receivables from July 2010 to July 2016, well informed sources told Business Recorder from Karachi. The total claim of outstanding receivables was Rs 128 billion against Sindh of which billing of Hesco and Speco was Rs 61 billion and Rs 67 billion respectively . The adjusted amount of Hesco was Rs 23.6 billion and Sepco's Rs 26.5 billion.
The sources said representatives of both the Sindh government and Sindh-based Discos held a number of meetings to reconcile the amount of billing. Secretary Water and Power, Younus Dagha also presided over two or three meetings to reach an agreement so that the longstanding issue is settled amicably. According to the agreement, sources said, the Government of Sindh would pay Rs 10 billion to Hesco and Rs 17 billion to Sepco including all taxes, surcharges and other levies to be paid in six equal instalments of Rs 4.566 billion each starting from September 2016.
On August 30, 2016, Chief Minister Sindh, Syed Murad Ali Shah, met Minister for Water and Power, Khawaja Asif as a follow-up of his meeting with Prime Minister Nawaz Sharif. Minister for Water and Power and Chief Minister Sindh discussed all the issues in a very selective meeting and reached an informal agreement on the issue. The sources said officials of Discos and Sindh government held marathon deliberations on the figures of outstanding arrears and consequently agreed on Rs 27.4 billion as final arrears.
The Boards of Directors of Hesco and Sepco have already accorded approval to waive off around Rs 50 billion to Sindh government. Hesco has already written off Rs 4 billion against WASA/ HAD connections in February 2016.
When contacted Secretary Water and Power Younus Dagha confirmed that an agreement was reached between the Ministry of Water and Power and Sindh government which will be implemented after seeking a formal approval from the Economic Co-ordination Committee (ECC) of the Cabinet.
He said both the federal and provincial governments have also agreed that Automatic Meter Reading (AMR) system would be installed on all connections of Sindh government departments within two months to avoid any future controversy on bills. Discos will also install ARM meters on Sindh Government housing colonies replacing bulk supply meters. "We have also agreed that the Sindh government will clear electricity bills within 60 days on the reading taken through AMR meters and if the agreement is not implemented, the federal adjuster will deduct the amount from the provincial accounts and pay the Discos," the sources said.