Circular debt has risen to Rs200b, AGP tells PAC

ISLAMABAD: The Auditor General of Pakistan (AGP) revealed that the circular debt had risen to Rs200 billion and the power consumers paid 16 percent of the line losses.
He said the government had passed on the burden of Rs200 billion of line losses and payments of over Rs28 billion to the IPPs and generation companies in the head of capacity charges on the electricity consumers, who were paying these amounts through their electricity bills. The auditors of the office of the Auditor General of Pakistan also revealed before the Public Accounts Committee (PAC) that the national exchequer sustained a loss of over Rs28.18 billion as the Central Power Purchase Agency failed to purchase the electricity from the Independent Power Producers (IPPs) under the purchase agreement despite the country was facing loadshedding. The meeting of the PAC was held with the chair of its Chairman Syed Khursheed Shah in which the audit paras related to different departments of the cabinet division for the year 2016-17 were examined.
The PAC has summoned a special meeting of the committee to examine the payment of Rs74 billion to IPPs in the head of capacity charges. The Audit officials revealed in the PAC that the Central Power Purchase Agency (CPA) has entered into the agreement with the IPPs and GENCOs for the purchase of available electricity and under the agreement if the CPA did not purchase the available electricity from the IPPs and GENCOs then it was bound to make payment in the head of the capacity charges. The audit officials told the committee that the CPA under the idle capacity has made the payments to over Rs28 billion to the IPPs and GENCOs. “There are 12 similar audit paras of irregularities of over Rs74 billion as these payments were made when the loadshedding was on peak,” the audit officials told the committee. The Audit officials were of the opinion that it was the responsibility of the NEPRA to look into matter and fix the performance standards but it failed to do so.
The PAC has summoned special session of the committee on the irregularities, corruption and corrupt practices of over Rs74 billion in the power sector on December 6 and 7 in which the Secretary Energy Ministry, chairman Wapda and chairman NEPRA was also directed to attend. Chairman NEPRA had stated that billions were paid to the private power companies despite their power generation plant were closed, which needed to be investigated. PAC member Shafqat Mehmood observed that the government’s system was a weak due to which the people were being robbed. The officials of the NEPRA told the committee that the circular debt has once again crossed over Rs480 billion and it was difficult to clear it.
PAC member Sheikh Rasheed Ahmed said the corrupt mafia inside the GENCOs was sending overbilling to the consumers to hide the line losses as the posts in these companies were being sold and the officers who were not doing overbilling get the transfer orders. The NAB officials told the committee that the government was fixing the electricity tariff rate on the basis of price of furnace oil at Rs65000 per barrel while its current prices stood at Rs35000 per barrel. The NEPRA officials told the committee that benefit of the fuel adjustment was not reaching the poor consumers but to those who used the electricity units of more than 300 units. The NEPRA chairman told the committee that line losses currently are 18.9 percent while the 16 percent of line losses were paid by the consumers whereas 2 percent transferred into the circular debt and it was also collected from the electricity consumers. “The people were sustaining the burden of 18 percent line losses while the difference between the fuel charges and electricity price is about 100 percent,” he told the committee.
Examining another audit para, the oil company HASCOl has imported the oil with mixing of the cancerous chemical, but the OGRA only imposed the low penalty despite penalty of Rs250 million should have been imposed. While examining another audit para, the audit officials told the committee that OGRA has allowed the ENGRO for the import of LNG despite not having the required license. The PAC members raised many question on the OGRA chairperson for having soft corner for the private companies but she failed to satisfy the committee.