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Textile sector opposes power tariff hike to pay off KP’s hydel arrears

Textile sector opposes power tariff hike to pay off KP’s hydel arrears

ISLAMABAD: The textile industry on Thursday opposed charging Rs70 billion to electricity consumers to facilitate the payment of Net Hydel Profit (NHP) arrears to Khyber Pakhtunkhwa in three years as the National Electric Power Regulatory Authority (Nepra) reserved its decision on increasing the tariff.

At a public hearing presided over by Nepra’s vice-chairman, retired Major Haroon Rasheed, a team of Wapda Hydroelectric, led by Member Finance Anwar-ul-Haq, pleaded that its tariff should be jacked up to Rs3.01 per unit so that the decision of the Council of Common Interests (CCI) for the payment of arrears could be implemented.

Mr Haq said that Wapda had been instructed by the federal government to raise a loan of Rs25bn from commercial banks to make the first instalment of NHP during the current fiscal year and then add Rs1.875 billion as mark up in the whole amount for recovery from consumers.

Syed Akhlaq Ahmed, a consultant for All Pakistan Textile Mills Association opposed the tariff increase. He said the approval of Wapda’s request would increase the average tariff for all consumers across the country by 55 paisa per unit. “This is unfair and unjustified,” he said, reasoning that Wapda and the government had been delaying the NHP issue for decades and would now push consumers to pay.

He said the government should make NHP payments to KP from its resources because it had already imposed an additional charge of Rs40 billion through tariff rationalisation surcharge while the power tariff was already on the higher side, making the industry non-competitive.

Responding to a question, Mr Anwar-ul-Haq said the total amount payable to KP under the agreement signed by the federal and provincial government was Rs70 billion, but the instant supplementary petition sought Rs51 billion in recovery from consumers as the regulator had previously jacked up Wapda’s tariff from Rs1.10 per unit to Rs1.74 per unit.

This petition came in the wake of a formal memorandum of understanding (MoU) signed by Water and Power Minister Khwaja Muhammad Asif, Finance Minister Ishaq Dar and Khyber Pakhtunkhwa Chief Minister Pervez Khattak on Feb 25 and subsequently approved by the CCI on Feb 29. It directed Wapda to pay Rs25bn as first instalment during the current fiscal year, followed by Rs15bn per annum for the next three years.

Published in Dawn, May 6th, 2016

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