AVN 50.85 Increased By ▲ 1.79 (3.65%)
BAFL 28.61 Increased By ▲ 0.06 (0.21%)
BOP 3.60 Decreased By ▼ -0.03 (-0.83%)
CNERGY 3.24 Decreased By ▼ -0.03 (-0.92%)
DFML 10.73 Decreased By ▼ -0.07 (-0.65%)
DGKC 52.59 Increased By ▲ 0.61 (1.17%)
EPCL 44.00 Increased By ▲ 0.40 (0.92%)
FCCL 12.45 Increased By ▲ 0.03 (0.24%)
FFL 6.20 Increased By ▲ 0.04 (0.65%)
FLYNG 5.96 Decreased By ▼ -0.03 (-0.5%)
GGL 10.30 Increased By ▲ 0.04 (0.39%)
HUBC 68.59 Increased By ▲ 0.09 (0.13%)
HUMNL 5.83 Decreased By ▼ -0.01 (-0.17%)
KAPCO 22.58 Decreased By ▼ -0.07 (-0.31%)
KEL 1.85 Increased By ▲ 0.02 (1.09%)
LOTCHEM 29.52 Increased By ▲ 0.62 (2.15%)
MLCF 28.57 Decreased By ▼ -0.13 (-0.45%)
NETSOL 80.87 Increased By ▲ 3.97 (5.16%)
OGDC 79.83 Increased By ▲ 1.43 (1.82%)
PAEL 9.71 Increased By ▲ 0.04 (0.41%)
PIBTL 4.28 Increased By ▲ 0.07 (1.66%)
PPL 61.58 Increased By ▲ 1.09 (1.8%)
PRL 14.45 Decreased By ▼ -0.03 (-0.21%)
SILK 1.11 Increased By ▲ 0.05 (4.72%)
SNGP 42.97 Increased By ▲ 0.47 (1.11%)
TELE 7.25 Increased By ▲ 0.15 (2.11%)
TPLP 13.32 Increased By ▲ 0.55 (4.31%)
TRG 98.93 Increased By ▲ 2.80 (2.91%)
UNITY 15.50 Increased By ▲ 0.27 (1.77%)
WTL 1.19 Increased By ▲ 0.01 (0.85%)
BR100 4,190 Increased By 29.8 (0.72%)
BR30 14,589 Increased By 182.3 (1.27%)
KSE100 41,904 Increased By 217.8 (0.52%)
KSE30 14,804 Increased By 61.5 (0.42%)

ISLAMABAD: The Debt Management Office of Finance Division has proposed Power Division to revisit draft agreement on Tariff Differential Subsidy (TDS) with K-Electric with respect to delayed payment keeping in view current economic environment, well informed sources told Business Recorder.

Commenting on draft TDS pact, the Debt Management Office, in a letter to Finance Division (Corporate Wing), stated that draft TDS agreement with K-Electric has been reviewed by it in view of possible financial implications on Government of Pakistan. The Debt Management Office has offered following comments: (i) the delayed payment rate is defined as KIBOR + 3.5 per annum, compounded semi-annually. The semi-annual compounding may be removed; (ii) the current 6-month KIBOR is hovering around 21 per cent with an expectation to remain at same levels in short-term.

Hence a delayed payment rate in the current scenario will result in around 24.5 per cent per annum, chargeable on actual number of days delayed. Therefore, the timeline committed for TDS payments are required to be followed effectively to avoid financial penalty placed in the current economic environment, the delayed payment not may, therefore, be revisited; and (iii) there is a typo mistake under the heading releases of TDS claims 10 of 2.5 where “eighteen” is written instead of “thirty”.

MoF refuses to become part of deal with KE on TDS

The Debt Management Office further proposed that the contents of the document from legal and implementing timelines point of view be ensured by relevant departments.

Earlier, Finance Division (Corporate Finance), had refused to become part of agreement with K-Electric on TDS, saying Power Division should sign the pact on behalf of the government of Pakistan (GoP), as “Electricity” is its domain under Rules of Business, 1973, well informed sources in Finance Division told Business Recorder.

According to Finance Division, as a matter of principle power subsidies should be restricted to the extent of the fiscal resources available to finance them. Restricting the subsidies to budgeted amounts would also help address the issue of circular debt.

Additional claims in the form of SG/ TSG during the currency of the year need to be avoided. These principles should be conveyed to all Discos. Power Division may get timely approval of the relevant forums for adjustment of tariffs accordingly.

As regards the proposed obligations of the GoP in the event of delay in process of TDS claims and charge of interest @ KIBOR+3.5% per annum, Finance Ministry maintains that it would have no objection to the Late Payment Surcharge (LPS), to the extent of budgeted subsidy. The proposed rate of interest appears to be on the higher side which may be adjusted downwards.

Finance Division further stated that KE should be required to provide at the end of each fiscal year relevant record of the subsidy (claims+ releases) along with other required documents for “subsidy audit” to Auditor General of Pakistan for post audit. Terms of Reference (ToRs) of audit should be decided separately. A penalty clause may be considered in the event of non-provision of record.

Finance Division further proposed that Power Division may sign the TDS Agreement on behalf of the GoP as “Electricity” is the domain of Power Division under the Rules of Business, 1973 and all issues of generation, transmission and distribution including provision of subsidy to electricity consumers is the mandate of Power Division.

Finance Division may not be added as party to the agreement as the proposed agreement will set a precedent where other entities would also wish to involve Finance Division in service level agreements between them and their service providers/ vendors.

Copyright Business Recorder, 2023

Comments

1000 characters
Asim Apr 04, 2023 03:58am
No compromises on rule of law! People support supermacy of constitution!
thumb_up Recommended (0) reply Reply
Khanaziz Apr 04, 2023 09:39am
Sir Iam from Arafat Kamran ltd . Jalalabad Afghanistan one of the sugar buyer to export Afghanistan
thumb_up Recommended (0) reply Reply

Power Division asked to revisit draft pact with KE on TDS

Post-budget press conference: Dar looks to pacify concerns

Sindh govt announces up to 35% raise in salaries, 17.5% hike in pension amounts

Met office warns Cyclone Biparjoy now 910km away from Karachi

Fitch does not ‘expect large further devaluation of Pakistani rupee’: report

Hina Rabbani Khar concludes two-day visit to Denmark, Finland

Dubai ranks third among top global cities, ahead of New York, London and Paris

Lahore ATC grants police two-day physical remand of Yasmin Rashid in Askari Tower attack case

Sri Lanka lifts import limits on 286 items as crisis eases

Egypt’s annual headline inflation rate speeds up to 32.7% in May

Zelensky says counteroffensive actions ‘taking place’