Dues against consumer billing collection: KE seeks MoF’s help for release of over Rs4.5bn collected by Pakistan Post
ISLAMABAD: K-Electric (KE) has sought the Finance Ministry’s help for the release of over Rs4.5 billion collected by Pakistan Post from KE consumers but not releasing the amount despite several reminders.
In a letter to Finance Secretary Hamed Yaqoob Sheikh, KE CEO Syed Moonis Abdullah Alvi has stated that despite continued pursuance for the release of the outstanding balance of Rs3.979 billion fully verified and reconciled amount till March 31, 2022, against consumer billing collected on behalf of KE, the amount is still pending till date.
Moreover, the non-release of the amount has resulted in a consequential finance cost of Rs 584 million included by KE till October 31, 2022, thus further exacerbating the already constrained cash-flow position of the Company.
In view of the foregoing and criticality of the situation, CEO KE has requested immediate release amount of Rs 4.563 billion which includes the principal amount as well as finance cost incurred by KE.
In September 2022, KE CFO Aamir Ghaziani, in a letter to the Secretary of Finance, stated that KE has been continuously pursuing the release of Rs 4 billion amount pending release by GPO to KE as of March 31, 2022 of consumer billing collected by GPO on behalf of KE. However, despite pursuing the matter for almost 6 months and even after an extensive verification exercise which confirmed that Rs 4 billion of consumer collection is to be released by GPO to KE, which remains pending to date.
The Secretary Finance was further informed that recently an amount of Rs 20 billion has been released to GPO by the Finance Division to clear the outstanding liabilities of Discos in this respect.
“The delay in the release of consumer collection to KE is causing us financial loss and has severely impacted the liquidity position of the company, especially in these difficult times when fuel prices have increased significantly and has consequentially hampered our ability to remain current with our fuel suppliers,” Ghaziani maintained.
He also highlighted that KE’s cash-flow position is already constrained due to the continuous accumulation of Tariff Differential Subsidy (TDS) claims which have reached Rs 386 billion and since KE’s credit lines are already exhausted, it does not have incremental credit lines from the banks to pay its fuel suppliers including SSGC, which will further impair the power utility company’s ability to manage supply to Karachi and its adjoining areas.
Further, considering the significant delays in release of consumer bill collection from GPO to KE and Discos, which have a consequential impact on their working capital position, KE has also requested that an appropriate mechanism is provided to KE and Discos to compensate them for delays in the release of consumer collection by GPO.
Copyright Business Recorder, 2022