The Economic Coordination Committee (ECC) of the Cabinet has raised serious questions over the disbursement plan of Rs200 billion to the power sector entities and asked the Power Division to come up with criterion on Saturday (May 30) as to on what basis the payments would be made.
The ECC meeting presided by Adviser to the Prime Minister on Finance Dr Abdul Hafeez Shaikh met on Friday to consider proposal of Power Division that sought approval for allocation of payments to be made to the power sector entities.
An official quoted adviser as soon as discussion started on the proposal "who decides how much payment is made to whom."
After he was informed that the principal accounting officer (PAO) has been taking the decision and there was no criterion in this regard.
Adviser's, according to the official, immediate response was that if the PAO has to take the decision as to how much amount would be disbursed to whom, and under what head than without any laid down principle, then what was the need to bring for ECC approval.
The adviser asked the Power Division to come up with the criterion because the forum of the ECC is to set principle.
The adviser deferred the approval and asked the Power Division to resubmit the proposal today (Saturday) with a precedent or anything in writing.
The ECC meeting was convened to consider criteria for disbursement of Rs200 billion Islamic Sukuk Facility respectively in the light of power sector audit report, however, an official claim that Power Division wanted simply allocation of amount.
He added that the adviser wanted clear criterion under which amount to be disbursed for power generation, capacity payment, and circular debt as well as for debt servicing.
A meeting of the ECC on May 6 decided that Power Division will evolve a viable criterion for transparent disbursement of payments to power generation and resubmit for consideration.
The Power Division prepared the criteria to disburse Rs200 billion that all IPPs will be paid in the manner that after disbursement of these funds the total payable to these IPPs remain equal or higher to the reported excess profits or systemic problems referred to in the committee report headed by Muhammad Ali, and after finalization/decision by the competent authority forum, the payables will be adjusted accordingly.