ISLAMABAD, Dec 20: The chief executive secretariat has directed all the public sector agencies, including armed forces, to pay their outstanding electricity dues by Dec 31 or face deduction at source.

The directive came in continuation of a decision that the president took last month in which he had asked the provincial governments to clear their dues before the end of the calender year.

The directive, issued on Dec 10, specifically asked the ministry of defence and its attached departments to follow suit notwithstanding armed forces’ longstanding dispute with Wapda on arrears of Rs3.8 billion.

All the provincial and federal government organizations, including the defence ministry, have been asked to pay their outstanding dues by Dec 31, failing which the ministry of finance will effect deduction at source.

“It is requested that (a) progress report on the implementation on above directive be furnished at the earliest”, said a finance ministry notification, quoting the order of the chief executive secretariat.

At a meeting on Nov 29 with the provincial governors, the president ordered payment of their 50 per cent dues by Dec 5 and the remaining dues by Dec 31. Wapda’s total public sector arrears, as of Dec 1, were Rs36 billion.

The armed forces and Wapda have been in a dispute over late-payment surcharge for over two years now.

The row has resulted in accumulation of its total dues to Rs3.8 billion, including late-payment surcharge of around Rs700 million.

The general headquarters has been insisting that it would not pay even the principal amount unless the late-payment surcharge is waived. Wapda, however, believes that waiver of surcharge will set a precedent for other sectors.

It was unclear whether the ministry of defence would clear the whole amount or only the principal amount.

Wapda sources said payment of dues by the public sector would help Wapda meet some of its immediate liabilities by the end of December but it was not going to effect its balance sheet for privatization.

They said Wapda had to borrow high-cost short-term loans to meet its Rs36 billion cash deficit. Short-term borrowing till last month and now payable this year amounted to six billion rupees, while it had to service Rs15 billion wapda bonds, they added.

Another eight/nine billion rupees are payable to independent power producers for power purchase and gas companies for gas purchase.