Conversion of electricity tariff to industrial category: Representatives of cellular companies grilled by Nepra

ISLAMABAD: National Electric Power Regulatory Authority (NEPRA) on Tuesday quizzed the representatives of cellular companies for seeking conversion of their electricity tariff from commercial to industrial category, which will have a financial impact of Rs6 billion on consumers.

Telenor & Pak Telecom Mobile (Ufone) Ltd, Pakistan Mobile Communication and Deodar (Jazz), filed petitions for change of tariff from commercial to industrial category on the plea that telecom sector has been declared an industry vide Ministry of Industries notification April 20, 2004, thus, telecom sector is entitled to benefit from all the concessions available to “industry” including industrial tariff of electricity for its exchanges and other installations. They also claim that through Finance bill 2021, an amendment was made in section 2(29C) of the Income Tax Ordinance, 2001 and new clause “c” inserted which declares telecom sector as an industrial undertaking.

The Authority comprising NEPRA Chairman Tauseef H Farooqi, Member Sindh Rafique Ahmad Shaikh and Member KP Maqsood Anwar Khan raised different questions on the justification of proposed conversion of commercial tariff to industrial, which, if implemented will increase tariffs of consumers by Paisa 4.7 per unit.

However, during the hearing, case officer of NEPRA noted that Ministry of Finance and Ministry of Energy (Power Division) have opposed conversion of cellular companies from commercial to industrial tariff.

The representatives of cellular companies argued that since the Ministry of Industry and Production had already declared them as an industry as per policy approved by the competent forums and cost of their infrastructure including towers and HSD used in generators has increased manifold, they deserve industrial tariff. The representatives of cellular companies claimed that they have invested billions of dollars as foreign direct investment and given thousands of direct/indirect jobs. The cellular companies also support GoP to meet the government’s vision of Digital Pakistan as they have achieved export target of $2 billion.

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They said export target of IT sector had been fixed at $3.5 billion for 2022-23, adding Pakistan had a huge potential for IT exports of $20 billion by 2030.

The representatives of cellular companies gave arguments to build their case as adding value to get industrial tariff. However, when they felt that their arguments were not being considered by the Authority members, one of the representatives of cellular companies accused the Authority of being “short-sighted” which irritated the Authority representatives.

Chairman NEPRA made it clear to the representatives that they have no other option but to get approval of the Authority. Other members were visibly annoyed at the behaviour of the representatives of cellular companies. However, on the request of Member Sindh, representatives of cellular companies withdrew their “objectionable” remarks.

During the hearing, initially, it was evident that the Authority was not convinced with the arguments of cellular companies however; at the time of wrapping of deliberations, Chairman NEPRA indicated that the Authority may seek a certificate from the cellular companies for submission of progress with respect to improvement in infrastructure after every six months.

Copyright Business Recorder, 2022