ISLAMABAD: A Senate panel was informed on Tuesday that latest memorandums of understanding (MOU) with power producers did not include circular debt.

The committee was also informed that K-Electric had caused a loss of Rs144 billion to the federal government and is holding back Rs44bn of consumers’ money through stay orders.

This was the crux of a meeting of the Senate Standing Committee on Power presided over by Senator Fida Muhammad.

Senator Nauman Wazir of PTI, who had led a sub-committee of the senate panel that recommended investigations against independent power producers (IPPs) early last year, gave his assessment of the recently-signed MOUs. He said the circular debt had not been included in the fresh MOUs.

According to an official statement issued by the upper house of the parliament, Senator Wazir said the project cost had earlier been exaggerated and the stolen fuel oil meant for IPPs was sold in the market. He said it was wrong to reduce the renewable energy tariff from Rs25 to Rs15 per unit which should have been brought down to Rs2-3 per unit. He said the capacity payment had also not been reduced.

KE holding back Rs44bn of consumers through stay orders: Nepra chairman

He said any misdeclaration at the time of agreement signing should have been proceeded against under the law. He said some of the IPPs had already recovered their profits who should not have been given any relaxation and there was a dire need to review these fresh MOUs. He added that most of the distribution companies were inefficient and had failed to reduce losses that were the root cause of the problem.

He said the dollar indexation set at Rs148 under these MOU would reduce the tariff by only Rs0.35 per unit while the cost of power plant was exaggerated by the IPPs and the fuel stolen from the power plants was being sold in the market. If the government takes profit on the extra earning and fuel then it would not be able to take action against the IPPs, he added.

National Electric and Power Regulatory Authority (Nepra) Chairman Tauseef H Farooqi told the committee that a total of 57 people had died due to rain-related accidents in Karachi in July and August and the regulator had received 1,421 complaints of overbilling and load-shedding of K-Electric. Syed Moonis Alvi, the KE CEO, who was also present on the occasion, said there were only two deaths that were related to the electrocution.

The regulator’s chairman said that K-Electric had to pay Rs44bn to the people of Karachi but it was hiding behind the stay orders. He said the regulator had delivered decisions regarding the tariff but the company comes up with stay orders from lower courts.

“I had told this to the chief Justice of Pakistan in the Supreme Court registry. The Chief Justice asked to bring the details of all such cases and assured that all such cases will be dismissed”, he added.

Mr Alvi said the courts were there to deliver justice and when we don’t have any other forum for justice then we have to turn to the courts who must be taking decisions in accordance with the law. “By taking stay orders, they think they have achieved justice”, Mr Farooqi retorted. The senate statement quoted Mr Farooqi saying that KE had incurred a Rs140bn loss to the federal government.

Chairman of the Standing Committee Fida Muhammad said the KE was taking 800MW electricity from the national grid without any agreement. Senantor Maula Bakhsh Chandio said that KE’s reputation was not good and consumers were also unhappy with the company. Senator Nauman Wazir said the KE consumers were getting cheaper electricity than the rest of the country.

However, K-Electric’s Alvi said the company’s tariff would now brought at par with rest of the country.

Senator Usman Kakar complained that electricity was not being provided to the chromite rich area of Muslim Bagh where 20,000 labourers were working. Aren’t these areas also part of this country, he questioned.

Special Secretary Power Munir Azam said they did not have funds in the Public Sector Development Programme for the provision of electricity to chromites mines of Muslim Bagh but the federal or provincial government provide the funds electricity will be provided to Muslim Bagh. Senator kakar said that there were 3,000 chromites mines in Muslim bagh.

Published in Dawn, August 19th, 2020