Power bills: NA panel for suspending recovery of arrears

As the Power Division was unable to satisfy the committee on issuance of notification to impose surcharges, taxes and positive fuel adjustment on export-oriented sectors without approval of the Economic Coordination Committee (ECC) of the Cabinet, the Finance Standing Committee of the National Assembly unanimously recommended to suspend recovery of arrears in electricity bills and additional charges.

As the proceedings of the National Assembly Standing Committee of Finance started with Faiz Ullah to discuss issued of imposition of surcharges on export-oriented sectors, representative of export oriented sectors that 7.5 cent tariff was allowed to them inclusive of all charges.

The committee discussed in detail the matter and was also given briefing by Abid Lodhi, Chief Executive Officer (CEO) Power Purchase Agency with regard to imposition of tariff charges in the electricity bills of export industry.

He said that Power Division has taken up the matter with finance division. Finance Division clarified that fixed charges and Neelum Jhelum surcharges were not incorporated in the allocated subsidy for the export oriented sector. This clarification led to making a decision by the Power Division to recover 12 months arrears in installments from the export oriented sectors.

The committee expressed its dissatisfaction on the response of Ministry of Energy (Power Division) and noted that burden of new interpretation of the ECC decision being made by high-ups of ministry of energy should not be put on exporters, who are a lifeline of the export industry.

"We unanimously recommended that Ministry should take up the electricity tariff charged to the ECC for future implementation," the committee chairman added.

Earlier, Sohail Pasha, Chairman, Pakistan Textile Exporters Association (PTEA), Hafeez Pasha, President (PTEA) and others stated that distribution companies are trying to disconnect the electricity connections of industrial units and if this happened, there would be more unemployment instead of employment opportunities.

They added that suddenly a notification issued by the Power Division in January 2020 created uneasiness for export oriented sectors because the government imposed Neelum Jhelum and other charges in their electricity bills retrospectively.

Khurram Tariq stated that we have completed financial closure and are unable to pass on the impact. He said that industry has set February 10 as deadline for strike and if the issue was not resolved, they would go on strike.

Officials of Ministry of Finance stated that the matter was pertaining to ministry of energy and commerce and clarification must be sought from them whereas Commerce Division stated that the notification was issued by the Power Division and adviser on finance would take up the matter with them on his return from abroad.

Upon this, the members of the committee including Aisha Ghaus Pasha inquired from the members whether power Division has sought ECC approval before issuance of notification as the approval of to 7.5 cent electricity tariff for export sectors was approved by the ECC.

Committee Chairman stated that he was utterly disappointed as bureaucracy is not taking the committee meetings seriously and no one is present in the meeting.

Ali Pervaiz stated that entire plan of the government to increase the export was based on working paper presented to the ECC meeting on October 2018 tariff rationalization for export oriented sector and subsequently a clarification was also issued by the Power division that 7.5 cent tariff for export oriented sector was inclusive of all charges. This was also stated that impact of this decision would be off set by increasing efficiencies of distribution companies by Rs 60 billion and Rs 80 billion through recovery. Pervaiz added that now the power division is putting the entire burden on finance ministry on the pretext of allocated subsidy.

The acting chairman FBR informed the committee that FBR has frequently issued income tax refunds and there were no hurdles/barriers at all. The meeting was informed that total Rs 25 billion refunds were received with "H" form and Rs 17 have been cleared whereas Rs 5 billion would be cleared on Tuesday and another Rs 5 billion would be cleared in next few days. She suggested that a Committee of exporters may be appointed to discuss and resolve the technical issues of Form "H" with FBR; therefore, the Committee offered the exporters to give the nominations in this regard. The exporters nominated the following industrialists and traders for the said proposed Committee:-

The traders from Faisalabad informed the committee about the hurdles being faced by them due to obtaining of CNIC copies from buyers. They were of the view that said condition has destroyed the business in the country. The Acting Chairman FBR clarified that why FBR was asking for CNIC. The Committee appreciated the role of FBR and directed it to resolve the said issue through consultation with traders.