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6-20pc power price hike proposed

The Ministry of Water and Power has finalised its recommendations to cope with the power crisis in the summer, suggesting two weekly holidays across the country, closure of commercial markets by 8pm and a steep hike in power tariff by 20 percent to generate Rs140 billion to maximise electricity generation. These recommendations will be tabled in the energy conference scheduled for April 9 in Lahore.

Secretary Water and Power Imtiaz Kazi presided over a meeting here on Thursday to finalise the recommendations, a senior official who attended the meeting told The News.

The federal government, the official disclosed, had agreed in principle to hand over the electric power distribution companies (Discos) to the provinces, but this proposal would be discussed in the energy conference, which would work out the modus operandi to hand over the discos. This proposal has come from the Punjab government while other provincial governments have opposed it.

The official said that the Planning Commission has proposed 6-20 percent hike in power tariff and if the conference accepts this proposal the government will be able to generate Rs140 billion, which would help reduce circular debt and increase power generation. Two weekly holidays in provinces and closure of commercial markets at 8 pm would help save 750 MW, the official said.

In addition a campaign will also be launched to save electricity in public and private sectors. Moreover, an effective mechanism would also be worked out to recover all electricity dues, which the federal and provincial governments and their attached departments owe, to ease out the circular debt. The official feared that if these measures are not taken the country is likely to face the worst power crisis this summer.

Pakistan Electric Power Company (PEPCO) owes Rs365 billion to various players in the energy sector while it needs to recover almost the same amount from the federal and provincial governments and private consumers.

According to the latest official data available with this scribe, PEPCO’s payables have swelled to Rs365 billion which include a whopping Rs215 to 280 billion to the independent power producers (IPPs), Rs21 billion against the usage of gas, Rs26 billion under the head of oil consumption, Rs70 billion to Wapda Hydel Company and Rs2 billlion to rental power plants.

The data also showed that the federal government owes Rs5.18 billion to PEPCO and its agencies and the federal departments Rs8.77 billion. Similarly, provincial governments owe a total of Rs66 billion to PEPCO including Rs49 billion by Sindh, Rs14.8 billion by Punjab, Rs1.6 billion by KPK and Rs13 billion by Balochistan.

The document also revealed that the AJK government also owes Rs14 billion to PEPCO, KESC Rs54 billion, FATA Rs19 billion and the private sector Rs155 billion. PEPCO will be in a position to pay back all its payables if its arrears are recovered that would also help resolve the power sector debt crisis.

The official said that the KPK government has refused to pay fuel adjustment charges on the pretext that it generates hydropower so it would not pay the fuel adjustment.

“Our viewpoint is that KPK is getting hydel royalty, water uses charges and, on top of it, KPK has also received massive amount for the settlement of people who got displaced when Terbela dam was built,” the official said and added the argument of KPK government, therefore, carries no weight. According to the Planning Commission, the power crisis is causing over 10 percent increase in the rate of unemployment per year.

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