Payment of electricity bills: public sector entities to be treated as ordinary consumers

The federal and provincial governments decided on Monday to treat public sector organisations as ordinary commercial consumers and to cut their electricity supply in case of default in an effort to resolve the problem of circular debt, it is learnt.
Sources said that the decision to this effect was taken at the meeting of provincial finances secretaries held with Federal Finance Secretary Dr Waqar Masood in the chair.
A participant of the meeting told Business Recorder that provincial governments have taken the responsibility of payment of electricity bills of hospitals, jails and VVIPs' offices, Chief Minister and Governor Houses, and allowed the distribution companies to treat remaining public sector organisations as ordinary commercial consumers because provincial governments have allocated sufficient budget to the departments for this purpose.
An official said that adjuster's proceedings would continue till mid-July to settle the backlog arrears of Pepco against the provinces. The total receivable of Pepco against provincial governments has been around Rs 67 billion with highest Rs 34 billion payable by Sindh government. Sindh government was ready to pay Rs 13 billion dues from 2010 onward and was not ready to clear Rs 21 billion dues without verification by the provincial authorities. The provincial government informed the high-ups of the finance ministry that it would clear the dues after completion of district-wise verification process.
The Pepco receivable against Khyber Pakhtunkhwa province stood at Rs 19 billion and the province wanted Rs 18 billion to be deducted from the interest payment of net hydel profit. According to sources electricity arrears stand at Rs 7 billion each against Punjab and Balochistan governments.
The meeting decided to constitute a committee with Federal Board of Revenue Chairman Salman Siddique as its head to work out formula to distribute among the province collection of sale tax from five services. The FBR would be empowered to collect sale tax from banking, construction, franchises, couriers and advertising on behalf of provinces and distribute among them after deducting collection charges. On the issue of provincial budget surplus, the meeting was informed that provincial budget surplus stood at Rs 107 billion during last year while for the current fiscal year budget surplus would depend on revenue collection of the FBR.
The issue of National Commission of Human Development (NCHD) was also discussed during the meeting and only Sindh agreed to take the ownership in the light of Council of Common Interests (CCI) decision while other provinces refused to take the ownership of the dispute-ridden institution.