The federal government may be in the process of sharpening the knife to ensure recovery of outstanding energy bills from provincial governments through the Federal Adjuster but it has failed to come up with any feasible recovery mechanism from private sector except disconnecting electricity after 60 days default, well informed sources told Business Recorder.
Presently, private sector is a defaulter of Rs 272 billion of different Discos but measures taken for recovery so far have not given the desired results despite the fact that a contract was signed with the National Accountability Bureau (NAB) for the purpose.
The sources said NAB had recovered Rs 400 million so far out of Rs 102 billion due from the private sector and some of the official power sector analysts argue that the handing of recovery to NAB was not a wise decision. Former minister for Water and Power, Ahmad Mukhtar had signed an agreement with the former Chairman NAB.
NAB, sources said, was also demanding 20 percent margin on recovery, which was also a dispute between the Ministry of Water and Power and the national watch dog agency. The Ministry of Water and Power had handed over a list of more than 1,000 chronic defaulters who owe a total of Rs 102 billion.
When contacted Prime Minister Special Assistant Energy, Dr Musadik Malik said the provinces had not raised any objections to the proposal of using Federal Adjuster office to deduct a significant portion of the provincial electricity dues. "Provinces have just sought time to discuss Energy Policy with their experts as they were not provided the draft policy prior to the scheduled Council of Common Interest of meeting," he added.
Federal Government maintains that it would like to deduct 90 percent of due amount through Federal Adjuster but for convenience of provinces it could be 70 percent of total amount, he continued. In reply to a question, he said Federal Government had proposed that a mechanism should be devised for that purpose. According to the proposed mechanism mandatory arbitration will be carried out after 60 days to settle outstanding dues. This process will commence in the presence of both parties. "If any province owes disputed amount it should be settled through arbitration mechanism and if the Discos' claims are unfounded it would be disposed off. Basic purpose of this mechanism is to clear Discos' books," Malik maintained.
Public sector owes Rs 130 billion of different Discos ie Punjab Rs 8 billion, Balochistan Rs 25 billion, KP, Rs 20 billion, Sindh Rs 50 billion and others including armed forces Rs 25 billion. Ministry of Water and Power argues that if the government does not take stringent measures to recover from defaulters', rationalise tariff, control theft and losses, inter circular debt will again reach alarming level. The government has recently retired Rs 480 billion of circular debt.