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ISLAMABAD: Finance Division has asked Power Division to present K-Electric’s issues before the Cabinet Committee on Economic Revival (CCER) pending since long, well informed sources told Business Recorder.

This development was witnessed in the light of a meeting of Khalid Maqbool Siddiqi, Convener MQM Pakistan, and former Provincial Minister, Rauf Siddiqui with caretaker Minister for Finance and Revenue, Dr Shamshad Akhtar.

MQM’s Convener, during his meeting with caretaker Finance Minister stated that “due to pending issues of K-Electric (KE), the service quality of KE is not up to the mark, which is adversely affecting the consumers, i.e., the citizens of Karachi, who are suffering due to low quality and extended load shedding”.

3 outstanding pacts: KE, federal govt inch closer to final drafts

Finance Minister, sources said, has taken up the issue of KE with the Prime Minister, who has desired that the highlighted issue may be taken up in the meeting of CCER. Both Khalid Maqbool Siddiqqi and Rauf Siddiqui also raised the issues of settlement of payment to Sindh Infrastructure Development Co Limited (SIDCL) and requested clearance of its dues on priority.

Talking to Business Recorder, an official of Power Division said that the report on KE’s issues, prepared by a Committee headed by former Prime Minister, Shahid Khaqan Abbasi, has been given final touches. Former Prime Minister, Shahbaz Sharif had accorded approval to the report during the dying days of his administration.

“The Committee’s report of KE is final and is being circulated amongst the stakeholders for comments before submission to the competent forum,” he added.

KE’s key issues are as follows: (i) Power Purchase Agency Agreement (PPAA), Interconnection Agreement (IA), firm capacity of 1000-MW and addition on pro-rata basis. This arrangement will be for ten years during which KE will add its own generation; (ii) TDS Agreement, commitment by Finance Division and Power Division of full subsidy budgeting, audit by AGPR and firm payment timeline with late payment penalties; (iii) Mediation Agreement between CPPA-G, KE and SSGC for resolution of disputed Late Payment Surcharge (LPS). Non-binding arrangement for available settlement and outstanding numbers agrees as of June 30, 2022; and (iv) Streamline of tariff determination with the approval of federal government guidelines, issued to NEPRA for streamlining application of QTAs.

Power Division claims that its payables to KE as of June 30, 20222 were Rs 209 billion of which Rs 60 billion was TDS, Rs 69 billion by Finance Division and Rs 80 billion by Nepra whereas receivables from KE were Rs 362 billion, which included CPPA-G invoices of Rs 346 billion - principal Rs 187 billion and mark-up Rs 159 billion, and 16 billion on account of Use of System Charges (NTDC).

KE’s issues like status of renewal of agreement between the government of Pakistan and K-Electric, pending payment of circular debt towards KE, financial audit reports of claims of TDS since 2005 till October 2022 in the light of Director General Commercial Audit and Evaluation, yearly profit earned by KE since 2005 to November 2022, power outages, damage of Bin Qasim Power Station, expenditure on foreign and local visits by CEO KE and other officials during the last ten years will also be taken by the Senate Standing Committee on Power on Tuesday (today).

Copyright Business Recorder, 2023

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