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December 4, 2018

Fear of NAB’s witch-hunt: Bureaucracy delays implementation of govt decisions


December 4, 2018

ISLAMABAD: The bureaucracy on account of NAB accountability became more careful and in most of the cases is hesitant in taking the decisions on time as on most of the files, top mandarins at various stages love to write that the approval is subject to fulfillment of all codal formalities and completion of legal prerequisites.

Owing to this very fact the files keep on moving from bottom to top and then top to bottom, top official sources told The News. On account of this very phenomenon, the decisions of the government approved by ECC and then ratified by federal cabinet are taking even too much time to get implemented.

This can be gauged by the fact that meeting of the Economic Coordination Committee (ECC) that held on September 17 took the decision to slash the RLNG cost per MMBT up to $6.5 per MMBTU for zero-rated industry (textile, leather, carpet, sports goods and surgical) with an aim to increase the exports and earn US dollars for the country and after 10 days federal cabinet ratified it but the decision is yet to be implemented even after the lapse of 76 days as of today (Monday, December 3, 2018) as the ECC approved the decision on September 17.

The detailed discussion with relevant officials in Finance Division suggests that the decision is very tricky and so its implementation is difficult and officials are first evasive, but now ready to implement but after fulfilling the codal formalities.

“Our major concern is that if the said huge subsidy being given to exports fails to fetch the required dividends, who will be held responsible,” the official said. “More importantly if RLNG at subsidised rate is given to captive power plants, capacity charges in power sector will increase.” They were of the view that power sector will sustain Rs7 billion per percentage point and if there are 7 percentage points, it will sustain Rs49 billion losses.

However, other view of the many officials is somewhat different which says that capacity charges are paid in any case as if the plants are functional or they are made dysfunctional. ”So, it is not a big issue.” They said when the Nepra decides on the petition of the government under amended Nepra Act seeking uniform tariff increase of Rs1.27 for many categories, the industry will start taking electricity from national grid and will not use RLNG for captive power plants. However, textile industry has been asked to use the electricity of captive power plants for industrial activities not for selling to the national grid.

And because of extraordinary cautious and careful approach by the bureaucracy the decisions are getting delayed arguing that the officers in the loop first assure procedure enabling them not to face the music in the times to come while implementing the said decision.

In the Finance Ministry no one is ready to talk on the issue on record. After Noor Ahmad, who was the spokesman for Finance Division became EAD secretary, there is no spokesman appointed in the ministry till now.

However, Sher Afgan, Additional Secretary and Spokesman for Petroleum Division said the implementation of the decision got delayed not because of the impression that bureaucracy is scared and hesitant in implementing the government decisions, but on account of the mechanism that is evolved to implement the said decision.

Afgan said since federal cabinet ratified ECC decision on September 27 under which RLNG cost has been slashed down to $6.5 per MMBTU, but when it comes to the implementation stage the finance division officials were of the view that the subsidised RLNG will be provided to export industry only for processing and it will cost to the national exchequer in the range of Rs7-8 billion per year. They were of the considered view that under the decision the RLNG at $6.5 per MMBTU will not be provided for captive power plants, otherwise the national exchequer will have to provide the subsidy of Rs42 billion.

So this was the point, he said, wherein Finance Division took the time and went into debate with top leadership of APTMA (All Pakistan Textile Association). APTMA was of the view that there is no distinction mentioned in the decision ratified by federal cabinet while allocating of subsidised RLNG between processing and captive power plants. “However, APTMA’s rationale prevailed.”

Then on November 12 ECC again, Afgan said, met and clearly decided that subsidised RLNG will be provided to export industry particularly textile industry both for processing and for their captive power plants. He said that earlier Finance Division used to directly give the subsidy to SNGPL against the usage of RLNG, but this time secretary finance has adopted a new mechanism under which it was decided that Sui Northern will generate the invoice of amount in the head of subsidy and send the summary to Petroleum Division which will send to Finance Division. Then Finance Division will sanction the release of amount to Petroleum Division which will send it to Sui Northern.

Afghan said that the clear decision by November 12 ECC meeting also took time that subsidised RLNG will be provided to both process and captive power plants of textile sector.

Finance Minister Asad Umar was contacted many times but his one cell phone 03332222260 was busy and other one 03008293036 was found powered off. However, he was sent the SMS seeking his version on the unnecessary delay on the decision of ECC taken on September 17 to bring down the cost RLNG for export industry and is it the fact that bureaucracy is evasive in implementing the decision of the government and if not then please explain why the decision of the government takes the time to get implemented. The News didn’t get the response till the filing of the report.

However, the concerned officials said that notification of the subsidised RLNG cost is not yet issued, as Finance Division had asked Petroleum Division to submit the summary seeking supplementary grant of Rs25.75 billion as subsidy for export sector till June 30, 2019. Petroleum Division on November 27 sent the summary which is lying with cabinet division that will take up in next Federal Cabinet for approval which may be held on next Thursday. Currently Sui Northern is billing at the rate of Rs1650 per MMBTU not at Rs600 per MMBTU. “This has virtually irritated the export industry leadership in the county and we have already been provided the RLNG bills at Rs1650 per MMBTU in the month of October and are in process of getting the bills of month of November,” Chairman APTMA Syed Ali Ahsan told The News further saying: “This will force us to close operational textile units and it is known fact that APTMA is trying from pillar to post to make the units operational which had been closed down for last 5 years.”

The ECC, he said, that met again on November 12 decided that export industry particularly Punjab textile Industry will be provided RLNG both for processing and captive power plants at Rs6.5 cents per MMBTU, but again the decision is not being implemented just because of the bureaucratic red-tapism.

The official documents relating to the operative parts of decisions of the two ECC meetings available with The News clearly say that after the 27th September cabinet meeting that ratified the ECC decision took place on September 17, Finance Division wanted to give subsidised RLNG only for processing, not for captive power plants of textile units but after that, another ECC that met on November 12, came up with the decision that textile sector will be provided subsidised RLNG both for processing and captive power plants. And in that meeting it was decided that for budgetary allocation of Rs25.75 billion for subsidy for current financial year, the petroleum division will move the summary to Finance Division asking for supplementary grant.

Under the decision that subsidy will be provided to zero rated industry and captive power plants and subsidy will be disbursed on monthly basis and captive power plant will use the electricity for textile units’ consumption not for selling electricity to the national grid. Power Division will ensure this through administrative measures.

“But unfortunately there is no headway after the lapse of 76 days. Still no progress has been made and industry will now get the huge gas bills of month of November again and we are left with no option but to move the court and close down the textile units as Punjab industry is not being provided the level playing field in terms of gas and electricity prices,” APTMA chairman said. The Industry in Sindh and other parts of the country is being provided the gas at the price of Rs480 per MMBTU, but Punjab industry is still being treated step-motherly."

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