Electricity arrears: KP to move CCI against deductions at source by MoF

ISLAMABAD: The Khyber Pakhtunkhwa government has decided to take up the issue of at-source deductions of Rs 3.426 billion by the Finance Ministry against electricity arrears with the Council of Interests (CCI), a national-level body to resolve disputes amongst provinces, sources close Advisor to Chief Minister, KP told Business Recorder.

KP Government maintains that the Finance Ministry made an at-source deduction amounting to Rs. 3.426 billion on account of outstanding electricity bills of provincial departments/offices for the period of July 2021 to December 202l ,and April 2023 to December 2023 in contravention of the decision of the Council of Common Interests in its meeting held on February 14, 2014, which reads as follows: “The CCI considered the proposed procedure explained by the Minister for Finance after consultation with the representatives of provincial governments, especially the Government of Sindh. It was agreed that at -source deduction of the electricity charges relating to the provincial government departments will be made at the rate of 25 percent of the amounts of the bill.

“However it will be mandatory to reconcile the bill between the concerned Power Distribution Company and the relevant Government Department within a period of sixty days failing this, the next deduction will not take place until the reconciliation is done.” The Finance Department Government of Khyber Pakhtunkhwa argues that this at-source deduction is against the spirit of CCI decision unanimously agreed by all stakeholders.

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“This sudden act of Finance Division is against the spirit of the decision of CCI. There is no mention of in the decision to adjust un-reconciled liabilities against agreed at sources deductions one sided,” it contends.

KP Government has also acknowledged it undoubtedly is heavily dependent on Federal Government transfers on different accounts against its due share. Provincial Government is already facing huge shortfall on account of Net Hydel Profit (NHP) arrears as well as divisible pool share of National Finance Commission. In such circumstances depriving the province of a huge amount of Rs 3.426 billion would deepen the financial instability for the Government of KP.

In this regard, the Finance Ministry has already been requested that further deduction should not be made from the divisible pool share without taking prior consent of the provincial government. The reconciliation with PESCO for this dispute at-source deduction of Rs 3.426 billion is in process. Keeping in view the decision of the CCI, Finance Department Government of Khyber Pakhtunkhwa moved a summary to Chief Minister, Khyber Pakhtunkhwa for his approval to place the matter again before Council of Common Interests to stop further at source deduction on this account. The Chief Minister Khyber Pakhtunkhwa has granted approval to place the matter before the CCI. The KP government has decided that before finalizing summary for CCI the comments of other provinces will be obtained as required under Rule of Procedure so issue could be placed before relevant forum in a tranquil manner.

Copyright Business Recorder, 2024