ISLAMABAD: In an effort to contain the soaring circular debt, the government has decided to allow distribution companies to cut off power supply to all those public sector departments that have failed to pay their current electricity bills. Secretary Finance, Dr Waqar Masood told Business Recorder that the provinces have agreed to allow distribution companies to disconnect electricity supply to defaulting public sector departments.
This was agreed by the provincial finance secretaries during a meeting here on Wednesday that electricity bills would either be paid by the responsible departments or by the provincial governments. The distribution companies would be free to sever, power supply in the event of non-payment.
According to Waqar, six months cash balance of the provinces during the first half of current fiscal year stood at Rs 69.119 billion and federal government had asked them for giving more surplus cash balance at the end of current fiscal year because of fiscal pressure.
He also claimed that provinces had agreed to settle the dispute on seven port related services. The finance ministry said the provinces had agreed to convene a meeting on this issue with federal finance secretary in the chair within two weeks to resolve the dispute of collection rights on seven port-related services. An official of the finance ministry said the provincial governments owe Rs 67 billion to Pakistan Electric Company (Pepco) as backlog of arrears with Sindh government alone needs to highest Rs 34 billion.
The Sindh finance secretary had agreed to clear the backlog of arrears except those Rs 21 billion on which the provincial government had got a stay order from the court. In 2010, Pepco sought intervention of the federal government for the clearance of its Rs 21 billion outstanding dues, but the Sindh government got a stay order from the court.
On the request of Sindh government, he said that stay order was given on Rs 21 billion backlog of arrears and the provincial government was directed to pay the current electricity dues. From June 2010 onward, he said an amount of Rs 13 billion had accumulated against the Sindh government and finance secretary had agreed in Wednesday's meeting to clear the current dues of Pepco as soon as district-wise process of re-verification is completed. In reply to a question, he said that according to provincial finance secretary the process of verification would be completed in a month.
Khyber-Pakhtunkhwa owes Rs 19 billion to Pepco and the province agreed to pay Rs 1 billion and wanted the remaining Rs 18 billion to be deducted from the interest payment of net hydel profit. He said that Punjab and Balochistan owe Rs 7 billion each.