Circular debt has risen to Rs200 bn, AGP tells PAC

ISLAMABAD: The Auditor General of Pakistan (AGP) has revealed that the circular debt had risen to Rs200 billion and power consumers paid 16 percent of 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 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 electricity from the Independent Power Producers (IPPs) under the purchase agreement though 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 an 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 payments of 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 loadshedding was at its 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 a 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 private power companies though their power generation plants were closed, which needed to be investigated. PAC member Shafqat Mehmood observed that the government’s system was weak due to which people were being robbed.
The officials of 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 consumers to hide the line losses as the posts in these companies were being sold and officers who were not doing overbilling got transfer orders. NAB officials told the committee that the government was fixing the electricity tariff rate on the basis of price of furnace oil at Rs65,000 per barrel while its current prices stood at Rs35,000 per barrel.
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.