January 06, 2009	Tuesday	Muharram 08, 1430

ISLAMABAD, Jan 5: The government set up a committee on Monday to iron out differences between the Karachi Electric Supply Company and the Pakistan Electric Power Company over the amount outstanding against the former.

The KESC argues it owes Pepco Rs60 billion, whereas the latter puts the figure at Rs80 billion.

The decision was taken during a meeting, presided over by Water and Power Minister Raja Pervez Ashraf, and attended by officials of the KESC, Pepco and the Water and Power Development Authority.

Prime Minister’s Adviser on Finance Shaukat Tarin, Adviser on Petroleum Dr Asim Hussain, State Bank Governor Saleem Raza and secretaries of the ministries of water and power and finance also attended the meeting.

The move is part of recent efforts by the government to get rid of the circular debt, which has now crossed Rs400 billion and almost half of which is payable to Pepco by defaulters.

Pepco is under tremendous pressure because the outstanding dues are hampering its efforts to reduce loadshedding in Faisalabad and adjoining areas, where power riots have put the government in an awkward situation.

The payment of dues will help Pepco overcome its shortfall of more than 500 megawatts.

The technical committee will try to bring the KESC and Pepco together on the size of the outstanding dues. Pepco officials say the outstanding dues are close to Rs80 billion while KESC claims it owes Rs60 billion.

Sources said the attitude of Pepco officials was business-like. They said in plain terms the company was not a social department that must continue to provide power to KESC for free.

“Pepco officials are frustrated. They demanded of the minister to make the KESC clear the outstanding dues immediately, otherwise what is going on in Faisalabad and nearby areas would grow further,” an official who attended the meeting said.

Mr Ashraf ordered that 90 per cent of the Rs12 billion subsidy which the government provides to the KESC every year on price differential claims be paid to Pepco directly.

He also directed the KESC to pay Rs60 billion to Pepco and leave the controversy over Rs20 billion to the technical committee to resolve.

The minister asked the KESC to start paying its monthly dues to Pepco in time so that the circular debt did not balloon further.

The meeting was told that power shortfall had come down to 2,500MW from 4,500MW of last week because oil supplies to IPPs and generation companies of Wapda had been augmented after the release of Rs7.5billion by the finance division.

Mr Ashraf told the KESC to reduce loadshedding hours and make efforts for uninterrupted power supply.

He asked the KESC to invest in new power plants, improve power generation and distribution system and ensure proper recovery to reduce losses.

The KESC officials informed the meeting that the company was facing a shortfall of 100 MW and loadshedding of 45 to 60 minutes was being carried out. The power situation was stable and there would be no deficit in supply in the coming days, they assured the minister.

The National Electric Power Regulatory Authority, in the meantime, served a notice on KESC, asking it to explain the non-utilisation of the capacity of its generating stations as well as electricity purchase from independent power producers.

“The KESC has been asked to explain as to why it is not purchasing enough furnace oil for producing electricity,” Nepra said in a statement.

The authority has sought a reply by Wednesday and deputed a team of experts to inspect KESC records. The team has been asked to submit its report about tariff adjustment requested by the KESC through a petition pending with Nepra.

Meeting cancelled

A meeting convened by President Asif Ali Zardari on Monday in the presidency to discuss the energy crisis could not take place.

Sources told Dawn that the prime minister’s house had conveyed its reservations over the meeting. The PM House, insiders said, contended that the presidency was getting involved in an issue which came under the purview of the prime minister.

However, in a somewhat unusual development, the presidency had to pull back, enabling Prime Minister Yousuf Raza Gilani to chair the meeting on Tuesday, the sources said.