Utility cos/agencies: ECC allows release of Rs37.33bn to PPOD for clearance of dues

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has allowed the release of Rs37.33 billion for clearing outstanding liabilities of the utility companies/agencies partners by the Pakistan Post Office Department (PPOD).

Well-placed sources said that the PPOD is an attached department of the Ministry of Communications. Under Rules of Business, 1973, the PPOD in addition to its core functions, also performs agency functions on behalf of federal/provincial governments and other corporate entities.

The collection of utility bills is one of the agency functions performed by the PPOD and the amount thus collected in this regard is deposited in the State Bank of Pakistan’s Central Account No1 (nonfood).

Pakistan Post had the facility to clear the liabilities of utility companies through the Letter of Credit (LoC) issued by the Director of Accounts PPOD, Lahore in terms of Article No 81 to 86 of Initial Account code Vol-1 duly approved by the Auditor General of Pakistan.

After the promulgation of the Public Finance Management Act, 2019, the Finance Division on 23-06-2021directed the PPOD to open an account in the State Bank of Pakistan (SBP).

Meanwhile, the Finance Division kept on issuing LoC up to November 2021 for cash transactions including agency functions.

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However, the LoC issued by the Finance Division in December 2021 did not include agency functions (Annex-D), which has resulted in the accumulation of liabilities to the tune of Rs62.33 billion up to 31 March 2022.

The issue of outstanding liabilities was taken up with the Finance Division by the Ministry of Communications on 17-03-2022 (Annex-F).

In response, the Finance Division on 15-04-2022 approved Rs25 billion for payment to the utility companies.

The remaining liabilities of utility companies/agency partners are Rs37.33 billion.

Furthermore, the PPOD with the approval of the Finance Division has opened an account in the National Bank of Pakistan w.e.f. 01-04-2022 and the amount collected under agency functions is now being regularly transferred to the utility companies/agency partners from the said account. Therefore, no further liability has accrued.

However, the amount of Rs37.33 billion earlier deposited in Central Account No1 is still pending payment.

The ECC of the Cabinet is requested to direct the Finance Division to release funds amounting to Rs37.33 billion for clearing outstanding liabilities of the utility companies/agency partners by the PPOD.

Copyright Business Recorder, 2022