The Economic Co-ordination Committee (ECC) of the Cabinet has directed Secretary, Finance, to resolve the issue of outstanding dues against all public sector entities in co-ordination with all those concerned, including Punjab government, official sources told Business Recorder.
The Pakistan Electric Power Company (Pepco), which is the major contributor to the inter-circular debt, is waiting payment of outstanding dues of Rs 104 billion against provincial governments, the Federally Administered Tribal Areas (FATA), and AJK. There are indications that the Finance Secretary would probably deduct this amount at source, which would be against the existing decision taken by the Executive Committee of National Economic Council (Ecnec).
Sources said that the Ministry of Water and Power in its summary discussed in the ECC in its meeting on November 17, 2009 had complained that some federal government departments, Balochistan government, Sindh government, AJK and FATA had not cleared undisputed claims of Wapda/power companies despite reconciliation.
The details of the outstanding dues in this respect were presented before the ECC, along with substantial outstanding amounts of subsidy in respect of agriculture tube wells. The Ministry of Water and Power requested intervention to have the outstanding dues cleared, sources added.
According to sources, the ECC expressed concern over default on the part of government entities, which portrays a negative image of the government. "The ECC also observed that subsidy policy for agriculture tubewells should be reviewed after taking all the provinces and other stakeholders on board in a joint meeting," sources added.
The Water and Power Ministry claims that the federal government departments are usually a month late with payments. Punjab and NWFP are clearing their dues satisfactorily, but federal government, Balochistan government and Sindh government have been delaying payments on one pretext or another despite reconciliation with outstanding dues as on August 31, 2009. These are: federal government owes around Rs 2.179 billion, government of Sindh owes Rs 16.539 billion, government of Balochistan about Rs 1.336 billion, AJK owes Rs 2.200 billion, and FATA owes Rs 80.243 billion.
As regards outstanding amount of subsidy to agricultural tube-wells, the position as on August 31, 2009 was as follows: GoP Rs 292.7 million, Punjab Rs 3613.4 million, NWFP including FATA Rs 76.45 million, Sindh Rs 13.415 million and Balochistan Rs 73.53 million.
According to the prescribed formula, total subsidy on agriculture tube-wells is 25 percent on electricity bills. This subsidy is equally shared by the respective province and Pepco ie 12.5 percent each. The Ministry of Water and Power is of the view that Punjab government is not making payment on account of 12.5 percent share of agriculture subsidy which is creating additional financial burden on public utilities in Punjab. Receivables against agriculture tube-wells in Balochistan as on August 31, 2009 were as follows: (i) GoP 40 percent ie Rs 2,062.94 million, and (ii) Balochistan at the rate of 30 percent ie Rs 5,103.00 million.