Power supply free of cost: Finance directed to withdraw facility

The Cabinet has directed the Finance Ministry to withdraw free electricity facility to about 176,000 employees of Wapda/Pepco, a longstanding demand of the lawmakers, sources close to Finance Minister told Business Recorder. This issue came under heated debate in the special federal cabinet meeting on June 3, 2011 when the performance of power sector came under discussion prior to the approval of federal budget 2011-12.
"Discontinuation of provision of free electricity to Wapda employees and revisiting of system of electricity billing for these employees should be considered," sources quoted the Cabinet as directing the Finance Ministry. Wapda incumbent and retired employees and widows are being supplied 33 mw electricity, free of cost across the country, and their bills are paid by the employed public sector power companies. "Electricity is not free for the employees. It''s a perquisite and part of package agreed between the power company and the employee. The company pays the bill on behalf of the employee," clarified a top official of Wapda.
The government also monetises this facility, which implies that Wapda/Pepco pays tax on the electricity supplied to the incumbent or retired employees/widows. In April, 2011, the National Assembly was told that BPS (1-21) and Chairman of Wapa are allowed free of cost electricity.
The official maintained that those people who are demanding withdrawal of ''so called'' free electricity who are unaware of the factual position. According to the information provided to the NA, 2,922, employees of BPS1, 412 of BPS 2, 450 of BPS 3, 190 of BPS 4, 863 of BPS 5, 3174 of BPS 6, 1327 of BPS 7, 387 of BPS 8, 551 of BPS 9, 22 of BPS 10, 772 of BPS 11, 485 of BPS 12, 66 of BPS 13, 997 of BPS 14, 372 of BPS 15, 814 of BPS 16, 935 of BPS 17, 643 of BPS 18, 226 of BPS 19, 71 of BPS 20, two of BPS 21 and one Chairman are enjoying free of cost electricity.
Most of the top officials of Wapda/Pepco are unaware of the cost of electricity supplied free of cost to its existing and retired employees. On May 3, 2011, the Senate was apprised that the government was reviewing its policy of free electricity supply to Wapda employees while legislation was being drafted to outlaw bonded child labour.
The government has allocated Rs 122.7 billion as subsidy for 2011-12 against Rs 84 billion in the budget of 2010-11, which was raised to Rs 296 billion, to pay power sector companies who threatened action in the international court. International financial institutions are also urging the government to withdraw subsidy on power sector so that this sector is able to stand on its own feet. USAID is extending financial assistance for revamping the obsolete power sector.