Power sector dues jump by Rs250bn in three yearsPakistan
ISLAMABAD: Despite the government’s claims of reining in the energy crisis and ensuring the recovery of outstanding dues from the public and private sectors, a staggering amount of Rs253.69 billion has been added to the power sector’s outstanding dues between June 2013 and June 2016.
Documents laid before the National Assembly recently revealed that when the Pakistan Muslim League-Nawaz (PML-N) took the reins in June 2013, the total outstanding dues of the power sector stood at Rs384.109bn, which had nearly doubled to Rs637.769bn by June of this year.
According to statistics laid before the house by the ministry of water and power, in response to a question asked by PML-N MNA Waseem Akhtar Shaikh, the main culprit is the private sector, which owes around Rs468bn, while the government sector, including provincial governments, has to pay back around Rs169bn.
But according to the written reply, the ministry claims that recoveries have increased from 89.58 per cent in 2013 to 94.45pc in 2016, and refuses to accept the impression that the government has failed to make substantial headway in the recovery of its outstanding dues.
The Khawaja Asif-led ministry also argued that large amounts were outstanding against provincial governments and held the poor law and order situation in Sindh and Balochistan as the main cause of arrears. It said that the provision of administrative support to recovery teams in Sindh and Balochistan could improve the situation. The ministry insisted that efforts were being made for recovery of these receivables.
“At present, an amount of Rs99.6bn is outstanding against provincial governments, out of which Rs73bn relates to Sindh and Rs19bn to Khyber Pakhtunkhwa,” the ministry’s written response said. Moreover, pending receivables from agricultural tubewells in Balochistan stand at Rs127bn, while Azad Jammu and Kashmir, the K-Electric and Fata owe Rs65bn, Rs46bn and Rs21bn, respectively.
The ministry said it had taken certain measures to enhance recoveries, including physical checks on the premises of permanently-defaulting consumers to ensure they weren’t using electricity from any other sources.
Other measures included following up on court cases or settlement of billing disputes; timely delivery of bills to consumers; and the activation of circle review and regional review committees to take up disputed cases.
The reply noted that provincial finance secretaries were being asked to take up the recovery of outstanding dues with major defaulting departments, while the distribution companies concerned had been tasked to reconcile outstanding amounts with their respective departments.
An official from the ministry of water and power, speaking to Dawn on condition of anonymity, contended that the issue of receivables wasn’t as simple as it seemed “from the outside” and required certain policy decisions, which had not been taken by successive governments.
For example, he said, though the issue of tariffs had been settled with the AJK and KP governments at a certain level, their dues continued to add up because the funds had not yet been transferred to the ministry.
Soon after coming to power, the government paid off around Rs330bn in circular debt to the independent power producers (IPPs) without a mandatory pre-audit. Now, questions are being raised that if the government can pay its bills to IPPs, how can it go soft against its debtors.
For the ministry official, there were certain consumers in the private sector who had long defaulted on their outstanding amounts, but the books continued to show those amounts as receivables. Once a consumer defaults, this means he has declared that he is unable to pay back the designated amount. In such cases, it is up to the government to make arrangements whereby a portion of the amount may be recovered or any other suitable settlement reached. “These are issues that any government would have to deal with,” the official said.
Published in Dawn, August 8th, 2016