The Ministry of Water and Power has notified two percent increase in power tariff across the board after getting it vetted by the Ministry of Law and Justice, official sources told Business Recorder. "We have increased two percent surcharge on power tariff which would be implemented from March 15, 2011, through which about one billion rupees will be collected," sources added.
The government had earmarked Rs 84 billion in the federal budget 2010-11, of which Rs 10 billion were for the Federally Administrated Tribal Areas (Fata), Rs 30 billion for tariff differential, Rs 4 billion as General Sales Tax (GST) refund and Rs 40 billion for interest payment on Term Finance Certificates (TFCs) issued by the Power Holding Company Limited (PHCL).
Last year, initially Pepco had projected Rs 265 billion shortfall which was reduced to Rs 239 billion, however, after two percent increase in power tariff the projected shortfall declined to Rs 196 billion for the whole year. "If we divide Rs 196 billion over 12 months, the government has to extend a subsidy of around Rs 16.3 billion per month to keep tariff unchanged," the official maintained.
When contacted, an official of the Water and Power Ministry told Business Recorder that it assisted each Disco to develop a credible and robust business plan and assessed managerial capacities and adequacy of processes in each of the Discos and Gencos and remedial measures initiated.
The official also claimed that load shedding has been reduced by almost 50 percent as compared to last year through the addition of 1975 MW and more efficient management of the generation units. The shortfall last year was close to 4000-4500MW while presently it is only 2000-2100MW daily. However, this claim does not match the ground realities, as duration of load shedding in villages is not less than 10 hours these days. The official also claimed that reduction in tariff differential subsidy from Rs 256 billion to just over Rs 100 billion in one year is not credible as it has crossed Rs 150 billion.
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