Defaulters owed Discos over Rs877bn in FY23, PAC told

ISLAMABAD: The Public Accounts Committee (PAC) was informed on Tuesday that defaulters of nine electricity distribution companies (Discos) owed more than Rs877 billion in the financial year 2022-23.

Audit officials revealed that 118 letters had been sent to the Power Division for recovery, with the Quetta Electric Supply Company (Qesco) having the highest non-recovery amount of up to Rs60 billion. The PAC requested a list of the top 300 defaulters of electricity distribution companies.

During a PAC meeting held here at the Parliament House, chaired by Junaid Akbar, the audit findings of the Power Division and Board of Investment for 2023-24 were reviewed. Audit officials reported that nine Discos had outstanding dues exceeding Rs877 billion from defaulters in FY 2022-23. In response, the Power Division secretary stated that no departmental accounts committee (DAC) meeting had been convened on this matter, but Rs162 billion had been recovered from defaulters so far.

Senator Afnanullah highlighted that Qesco had the highest number of non-recovery cases. Senator Shibli Faraz suggested that the committee be provided with a list of the top 300 current defaulters in terms of outstanding dues. It was disclosed that Qesco alone is owed up to Rs60 billion.

Committee Member Khalid Magsi expressed concerns about the situation in Balochistan, stating that the law and order conditions had deteriorated to the point where recovery efforts were nearly impossible. He remarked that the people of Balochistan felt compelled to take up arms due to the worsening conditions. Magsi also pointed out that banned outfits, such as the Baloch Liberation Army (BLA), were openly active in the region, making it difficult to recover dues in Quetta. He further noted that the Balochistan government itself was the largest defaulter.

The Power Division secretary assured the committee that Discos had submitted working papers for the recovery of Rs162 billion and pledged to personally monitor the progress of the recovery efforts.

The committee chairman of the directed the Auditor General to verify the recovery of Rs162 billion by the next meeting.

Additionally, the PAC requested a list of the top 300 defaulters of Discos. The chairman also instructed the Power Division to hold two DAC meetings every month and mandated that Discos submit monthly reports on recovery progress.

During the meeting, the audit paragraph regarding the Power Division’s failure to remove electric equipment and recover outstanding balances exceeding Rs501 billion was reviewed. Audit officials informed the committee that they had written 118 letters to the Power Division urging recovery.

The issue of Disco officers receiving free electricity was also discussed. The Power Division secretary stated that the federal government had decided to end the provision of free units, but employees had challenged this decision in court. The PAC sought detailed information on the cost of free electricity provided to Discos, to be presented in the next meeting.

Audit officials further revealed that Disco employees were using unauthorised loads from the Power Division, resulting in undue benefits to consumers. They reported that 7,689 consumers were using more than the prescribed load, placing an additional financial burden on the companies. The committee directed an inquiry into this matter.

Regarding the lapse of funds for the Dhabeji Special Economic Zone project, the Power Division secretary explained that the funds could not be utilised due to the unavailability of the right-of-way for the project. The PAC chairman questioned why the right-of-way had not been secured earlier, emphasizing the importance of the project.

The committee also addressed corruption cases involving Disco officers and officials, with over Rs1 billion misappropriated in 337 cases. This issue was brought under consideration for further investigation.

The secretary reported that over Rs0.7 million had been recovered from the Faisalabad Electric Supply Company (Fesco) and more than Rs0.16 million from the National Transmission and Despatch Company (NTDC). Audit officials informed the committee that corruption cases had been referred to the Federal Investigation Agency (FIA) and National Accountability Bureau (NAB). NAB officials stated that they were investigating corruption in Mirpur Khas and Tando Adam, with a total of 33 individuals arrested so far.

The meeting also addressed the issue of refunds exceeding Rs21 billion to consumers due to incorrect meter readings and other departmental errors by six Discos. Audit officials noted that no action had been taken against the Disco officials responsible for overbilling.

Committee member Bilal Ahmed Khan questioned whether the overbilling was intentional or a result of negligence. Another committee member, Hina Rabbani Khar, emphasised that the PAC must take strict notice of such actions, as corruption in the power sector was severely damaging the country. She stated, “The power sector has brought the country’s economy to the brink of collapse. Reforms are urgently needed in this sector.”

Audit officials further revealed that 152 officers within the Multan Electric Power Company (Mepco) were involved in incorrect meter readings, but only 101 were warned, with no further action taken. Committee members expressed concern over this lack of accountability. Chairman Junaid Akbar ordered that the matter be resolved within a month and directed that a report on actions taken against the implicated officers be submitted in the next meeting.

Earlier in the meeting, the committee reviewed audit objections related to the Board of Investment for 2023-24. Audit officials highlighted that during the financial year 2021-22, various services worth Rs5.5 million were procured without competitive bidding. The PAC chairman instructed that this issue be resolved within 15 days.

Additionally, audit officials noted that in 2023, a development fund of Rs7.95 billion was allocated, followed by a supplementary budget of Rs9 billion. The Power Division officials reiterated that the right-of-way for the Dhabeji Special Economic Zone had still not been secured.

The PAC chairman also pointed out that funds for the ABC Cable project in Peshawar, Khyber, and Bannu Circles had lapsed and emphasized that any remaining funds should be surrendered to the Finance Division in a timely manner. The committee directed the Power Division to submit a monthly progress report on the Dhabeji Special Economic Zone project.

During the meeting, the committee also addressed the issue of payments exceeding Rs8.3 million made by the Board of Investment to private hotels for organising a conference, in violation of the Public Procurement Regulatory Authority (PEPRA) rules. Officials from the Board of Investment admitted that the payments were made without following competitive bidding procedures in view of security of Chinese officials. The PAC directed the Board of Investment to ensure strict compliance with PEPRA rules for all future conferences.

Meanwhile, PAC Chairman Junaid Akbar Khan expressed frustration with officials from the Finance Ministry during the meeting. He reprimanded a female officer, stating, “You were aware that this audit report was coming, yet you arrived unprepared for the meeting.” Junaid Akbar Khan warned, “Do not force me to remove anyone from the meeting. Everyone attending must come prepared. This is the final warning — no one should attend a PAC meeting unprepared.”