ISLAMABAD: Auditor General of Pakistan Rana Asad Amin presented the special audit report on the payment of circular debt of Rs480 billion to independent powers producers (IPPs) to the Public Accounts Committee (PAC) on Thursday which declares these payments irregular and in violation of rule as these were made through the State Bank of Pakistan (SBP) directly, bypassing the Accountant General of Pakistan Revenue (AGPR).
The PAC directed the Ministry of Water and Power to vacate the stay order on heat rate test and to hold audit and if paid any additional amount to the power producer companies then it should be recovered. The committee held its meeting on Thursday with its head Syed Khursheed Shah in the chair. The meeting scrutinised the audit report on the payment of Rs480 billion circular debt made by the government.
The auditor general declared the payments of Rs480 billion to the IPPs as irregular and in violation of rules. While after making the payments of Rs341 billion to Pepco, the remaining amount was adjusted in different heads. It was also revealed in the meeting that the IPPs were avoiding heat rate testing and have got a stay order from the courts of law.
Secretary Ministry of Water and Power Younis Dagha told the committee that without heat rate testing, it was not possible to know that how much furnace oil was used for the power generation. “We made payments on the basis of figures provided by the IPPs,” he told the committee.
The secretary said the circular debt has reached Rs530 billion in June, 2013 and if the payments were not made on emergency basis then many power plants will be shut down. However, he said the Ministry of Water and Power nothing to do with these payments as the finance minister was alone taking care of the issue of payments. He told the committee that the power crisis was at peak in June 2013 and many power generation companies approached for the cashment of the sovereign guarantees.
On the query of the members with regard to current status of circular debt, the secretary said it now stood at Rs320 billion and it was same since the year 2014.The officials of the Ministry of Finance during the meeting admitted that Rs480 billion were not kept for any specific head but in different heads of saving in shape of equity to make payments. Younis Dagha told the committee that the circular debt in 2009 was Rs161 billion and reached at Rs460 billion in 2012 while the previous government cleared Rs239 billion after taking credit from
State Bank of Pakistan but in 2013 it reached at Rs503 billion.
Khursheed Shah observed that during the tenure of the PPP, there was difference of Rs25 percent in the billings of the companies and the companies were ready to reduce the billion to 15 percent. “The present government should not have to pay Rs31 billion late payment surcharge to the power generations companies,” he observed.
