Sunday February 25, 2024

KE in cash crunch on TDS delays

By Our Correspondent
October 01, 2022

KARACHI: K-Electric on Friday said that delay in the release of Rs380 billion Tariff Differential Subsidy (TDS) claims was aggravating its cash flow challenges.

The company said that as of August 2022, receivables from various federal and provincial government entities stood at Rs452.7 billion, of which the majority was in the form of TDS claims.

“This amount is paid on behalf of consumers to distribution companies by the government of Pakistan in order to maintain the rates of electricity under the applicable tariff regime in the country,” it said.

Disbursement of TDS would also help the company clear its own payables, including fuel suppliers. Amid toughening conditions, K-Electric was also renegotiating its service contracts with various vendors/service providers to reduce non-essential services, since the scope of work has significantly reduced.

In a meeting with leading industrialists, including SM Muneer, K-Electric CEO Moonis Alvi said that power supply to Karachi’s industries remains a top priority for the company.

He also shared that provision of expensive RLNG which was 5 times more costly than natural gas, which was a major obstacle. But he said it “can be overcome by the timely release of TDS claims”, as this will help streamline KE’s financial position.