ISLAMABAD: The government decided on Monday in principle to further increase power tariff by 12 percent during the current fiscal year with a view to minimising subsidies.
Sources told Business Recorder that a meeting on energy sector held here on Monday with Finance Minister Dr Abdul Hafeez Shiekh in the chiar, after a detailed discussion on the issue of circular debt was of the opinion that Rs 50 billion subsidy allocated in the budget for tariff differential would be insufficient if 12 per cent power tariff was not increased during the current fiscal year and 18 per cent unaccounted for power supply was not minimised.
Talking to reporters after the meeting, Minister for Water and Power Syed Naveed Qamar said that time period of running defaulters would be reduced from 90 to 60 days. An official on condition of anonymity said that Finance Minister expressed displeasure over the performance of Economic Reforms Unit (ERU) of Ministry of Finance for not coming up with workable plan for improvement of public sector entities including power sector. The data of the Ministry of Water and Power and Economic Reforms Unit on circular debt could not be reconciled even in the second meeting and Minister for Water and Power attributed this to complications in the power sector.
He said that it was not easy to finalise within one meeting because even some information has to come from Azad Kashmir government as well. However, he said that the meeting was able to narrow down the issues after detailed deliberation on all the issues. The meeting was attended by Minister for Water and Power, Syed Naveed Qamar, Minister for Petroleum and Natural Resources Dr Asim Hussain, Secretary Finance Dr Waqar Masood and members Planning Commission on Energy and official of KESC, etc.
The meeting also constituted a sub-committee with Finance, Water and Power and Petroleum Minister as well as Deputy Chairman Planning Commission Dr Nadeem Ul Haq to formulate a strategy for recovery of PEPCO's outstanding dues from provinces and other public sector organisations.
An official of the Karachi Electric Supply Company (KESC) described the meeting as directionless and stated that Member Energy Planning Commission Shahid Sattar contention was that load-shedding in Karachi was relatively less from other parts of the country and therefore power supply to KESC should be reduced.
The KESC official claimed that the government owed Rs 18 billion to KESC on account of subsidy and Sindh provincial government Rs 20 billion including Rs 14.5 billion receivables from Karachi Water and Sewerage Board while Rs 5.5 billion from City District Government Karachi while KESC owed Rs 17 billion to National Transmission and Dispatch Company (NTDC).