Power dues settlement: Centre to slash Rs161bn from provinces’ NFC share

ISLAMABAD: The federal government is preparing to deduct Rs161 billion in outstanding electricity dues from the shares of all four provinces through the National Finance Commission (NFC) award — a move already greenlit by the Council of Common Interests (CCI), Power Division officials told senators on Friday.

The controversial plan, discussed during a meeting of the Senate Standing Committee on Energy chaired by Senator Mohsin Aziz, would dock Rs68 billion from Sindh, Rs42 billion from Punjab, Rs41 billion from Balochistan, and Rs10 billion from Khyber Pakhtunkhwa. These are outstanding dues against the provincial departments for nearly three years.

Officials said only Punjab has cooperated so far in reconciling dues, while the remaining provinces have dragged their feet for over two years.

Federal Minister for Energy Awais Leghari said 25 percent of reconciled electricity dues could be deducted at source, following approval from the Council of Common Interests (CCI).

The remaining amount, he added, would be recovered later. Leghari clarified that the deductions would apply only to reconciled accounts and said the matter had been taken up with the Finance Division. On privatization, Leghari said three power distribution companies — Iesco, Fesco, and Gepco — will be privatized in the first phase, with Lesco, Mepco, and Hesco to follow.

The Guddu and Nandipur power plants are also headed for privatization. Assuring senators, Leghari promised employee protection during the privatization transition.

The Privatization Commission officials informed lawmakers that a financial advisor has been appointed for the first three utilities and will submit its report by the end of May. Roadshows and investor briefings will follow, with the full transaction process expected to conclude within six months.

Meanwhile, Nepra Chairman Waseem Mukhtar noted a Rs7.41 per unit reduction in power tariffs due to fuel and quarterly adjustments. But Senator Aziz warned that the relief may be short-lived. Mukhtar echoed the concern, citing plummeting hydropower output caused by weak snowfall and drying reservoirs.