Power ministry admits levying additional surcharge for loan payment

IslamabadThe Ministry of Water and Power on Wednesday admitted before the Public Accounts Committee (PAC) that despite tariff reduction in power sector due to decline in the international petroleum prices, the consumers did not get a relief of it because of government imposed two additional surcharges to cover payment of commercial loans and its interest, line losses, tariff rational and other additional taxes on the electricity bill that further burdened the electricity consumers.

Even the electricity consumers were paying back commercial loans acquired from Ministry of Water and Power as well as interest on which reflected in the consumers bill in shape of additional surcharge.

The PAC held its meeting on Wednesday with the chair of its Chairman Syed Khursheed Shah in which the Ministry of Water and Power gave briefing to the committee on the power sector.

Giving details of the additional taxes collected from the consumers through their electricity bill including 43 paisa per unit of debt servicing surcharge and Rs1.23 per unit of Tariff Rational surcharge to return Rs371 billion of commercial loan and its interest.

The members of the PAC observed that if new addition taxes are imposed then the Parliament is unaware of it. To query of the PAC Chairman Syed Khursheed Shah about the average power tariff since 2012, the officials of Ministry of Water and Power told the committee that the average power tariff in 2012-13 was Rs13.15 per unit, the average power tariff in 2013-14 was Rs 13.80 per unit, the average power tariff in 2015-16 was Rs 10.90 per unit and average power tariff in 2016-17 is Rs 11.97 per unit. 

The officials of the Ministry of Water and Power told the committee that the circular debt has reached Rs 321 billion due to increase in production of the electricity. The PAC has sought record of total production of electricity, its distribution and cost during last 8-years to examine the record to assess the reasons of increase in the circular debt despite paying Rs480 billion when this government took charge.

It was informed to the committee that Ministry of Water and Power was paying Rs3o billion annually interest on commercial loans which were acquired for the power projects. Giving the briefing to the PAC, the officials of the Ministry of Water and Power told the committee that the WAPDA had issued Sukuk bonds since 1987 to 2001.

PAC member Dr Azra Fazal observed that the rate of interest on Sukuk bonds was always high and consumer facing this burden. Syed Naveed Qamar observed that it clearly means that the Wapda is acquiring loans internally and externally.

Senator Sherry Rehman observed it was clearly revealed that two governments—Musharraf government and present government of Nawaz Sharif—has burdened the people with high interest rate loans.

Giving the briefing of Nehlum-Jehlum power project, the Wapda chairman told the committee that the issue with regard to Nelhum-Jehlum power project has been resolved and construction of 68 km tunnel has been completed while the work of filing is completed in October.

He told the committee that estimated cost of the Nelhum-Jehlum power project was Rs80 billion but it had increased to Rs500 billion. According to officials, four units of the project would be functional by March 2018.

The secretary Ministry of Water and Power made it clear that if India makes an effort to fail the project then we have different options. He admitted before the committee that Kishan-ganga dam would create 10 to 15 percent water shortage adding that Pakistan has ability of 145 MAF (Million Acre Feet) of water but unfortunately due to having no additional major dams we could only store 14 MAF of water while 30 MAF wasted. “If we want to save the country from water storage then we have to build bigger water dams,” he said.