ISLAMABAD: The government has decided to supply 2,182 million units of electricity to Azad Jammu and Kashmir (AJ&K) through Central Power Purchasing Agency –Guaranteed (CPPA-G) at a rate of Rs21.52/ Kwh instead of power Distribution Companies (Discos), well informed sources told Business Recorder.
This decision was taken at a meeting presided over by Special Assistant to the Prime Minister on Finance & Revenue, Tariq Bajwa, which was attended by the Finance Secretary, Secretary Power, Additional Finance Secretary (CF), AS (l &II) Power Division, Chief Secretary AJ&K, Finance Secretary AJ&K, Secretary Power AJ&K, and Joint Secretary KA&GB Division.
Additional Secretary, Power Division gave an update on the decisions taken at a meeting held on 30th January, 2023 on the same subject. The meeting was informed that in order to develop proposals on future tariff for AJK, Power Division established Financial, Technical and Legal Working Groups with the participation of GoP, GoAJ&K and Water Resources Division/WAPDA. The main Committee under Power Division considered the reports of these Groups in its meeting held on March 27, 2023.
The sources said Power Division recommended basket tariff of Rs21.52/ kwh for AJ&K on the working of above referred Working Groups. Accordingly, Finance Division was requested to provide budgetary allocation on the basis of a new tariff for AJ&K, in order to cover anticipated shortfall in the cost of electricity provided to AJK by CPPA.
After detailed deliberations the meeting decided that Power Division may draft a revised tripartite agreement based on the following principles: (i) NTDC will directly supply 2,182 million units of electricity to AJ&K, eliminating the role of DISCOS from FY 2023-24 and raise the invoice based on the prevalent basket price. AJK will pay to CPPA-G the full amount as per the invoice; (ii) Ministry of Finance will allocate as grant in-aid of Rs25 billion from FY 2023-24 in order to cover the anticipated shortfall in the payments to be made by AJK to CPPA-G. The net payable by GoP will be Rs25.00 billion minus the Water Usage Charges (WUC) from Mangla Dam and NJHPP; (iii) Government of AJ&K will prepare T&D loss reduction plan spanning over 6 years to bring down T&D losses to the levels prevailing in adjacent DISCOs (GEPCO and IESCO) in addition to plan to improve recovery to 80% over a period of 5 years. In this regard a Performance Agreement from 2023- 24 to FY 2028-29 to improve recovery and reduce T&D losses will be signed between Power Division and GoAJ&K; (iv) local generation in AJ&K will not be diverted to the NTDC/national transmission network. Accordingly, there will be an annual proportionate reduction in the Rs.25 billion grant in aid provided by GoP; (v) Power Division will take up with FBR, the matter of exemption of GST on export of electricity to AJ&K; and (vi) Power Division shall continue to provide technical and administrative support to AJ&K electricity department during the transition phase for setting up the Disco.
Copyright Business Recorder, 2023
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