ISLAMABAD: Showing concern over sustainability of the power sector, the National Assembly’s Standing Committee on Power on Wednesday deferred two bills seeking registration of theft cases and imposition of surcharges on electricity consumers.

The committee led by Chaudhry Salik Hussain linked the passage of the bills to a clear roadmap for the restructuring of power sector to put on sound footing in two years and a transparent plan for imposition of surcharges and their utilisation.

The committee was informed that outstanding dues of the Independent Power Producers (IPPs) against the government had reached close to Rs1 trillion while about Rs35bn worth of electricity was being stolen annually.

Opposes imposition of surcharges to pay circular debt as it will burden consumers

The committee expressed serious reservations on the Nepra Amendment Bill. Majority of the members believed the Power Division was trying an easy way out of paying circular debt by imposing surcharges but it was not clear if the resultant increase in tariff would actually reduce the losses.

The panel noted that the plan under which the legislation to impose uniform tariff and surcharge was not clear and directed the Power Division to bring a clear plan. There should be sufficient justification for the committee to give its nod to the proposed legislation.

An additional secretary of Power Division said that imposition of surcharge on electricity consumers was required to be given legal cover to control the circular debt under the proposed Nepra Amendment Act. These surcharges will be levied to cover the debt obtained for power projects and power sector, he added.

Chairman of the committee questioned if these surcharges will help circular debt reduction or further increase the burden on the consumers. The circular debt has reached to Rs2.3tr, he said, fearing that even with imposition of surcharge it may further increase.

The additional secretary said that to control the circular debt the electricity theft needs to be controlled. He said the government was negotiating the circular debt reduction plan with IMF and finalising its figure.

Mr Salik and other members pointed out deficiencies in the proposed legislation and observed that the imposition of surcharges should be done by the provinces. The committee said that loss-making Discos which had played havoc with the country, should be handed over to the provinces.

The ministry should ensure that no more waiver be given to Discos, Salik said and drew the attention of the members towards the report of the Auditor General of Pakistan saying huge irregularities, mismanagement, misappropriation and embezzlement amounting to Rs3tr had been reported in companies under the Power Division alone. He said the AGP had also put question mark over the sustainability of the power sector under the current state of affairs, governance shortcoming and weak financial and administrative controls.

Salik held the previous as well as the incumbent government equally responsible for pending the quarterly adjustments.

Regarding surcharges the committee asked the ministry to come up with a Master Plan, its implications and long-term benefits for the public and to address the question that whether it is part of the plan to make the power sector more efficient and if in a period of two to three years be able to lower the price per unit and at par with other countries of the region.

The bill was deferred for the next scheduled meeting with the direction that the ministry should get its act together and submit a proper justification for the imposition of surcharge.

The Pakistan Penal Code (Amendment) Bill 2019 was also deferred as members from Sindh showed reservations for giving powers of taking cognizance by the officer of the government and opined that this will open doors for corruption and will promote the culture of registering fake FIRs.

The committee also decided to call the high-ups of K-Electric to answer the complaints of legislators.

Published in Dawn, October 29th, 2020