ISLAMABAD: Amid protests by the government and the people of Azad Kashmir over extended loadshedding, the Federal Power Division and AJK Administration have decided to hold a structured dialogue on Monday to settle the outstanding disputes.

At a meeting on Wednesday, Prime Minister of Azad Kashmir Raja Farooq Haider Khan and Federal Minister for Power Sardar Awais Ahmad Khan Leghari agreed to convene expert level huddle on March 5 to address all electricity related issues.

The power division claims around Rs88 billion outstanding amounts of its distribution companies against Azad Kashmir, billed under normal rates of about Rs12 per unit.

The AJK has been making lower payments at about Rs3 per unit under a decade old agreement with the federal government.

Under that agreement, the rates should have been revised almost five years ago to Rs6 per unit, but this could not be implemented because of legal and constitutional complications.

The difference between the special flat rate for AJK and the rates notified by Nepra is required to be picked up by the federal government.

Nevertheless, it is beyond the financial capacity of the AJK government to clear its dues because of its reliance on the federal government.

This can be assessed from the fact that AJK’s total budget for the current year was estimated at Rs85bn, including a development budget of Rs21bn, fully funded by the centre.

As the arrears increased, the distribution companies of Islamabad, Peshawar and Gujranwala have been applying extended loadshedding of up to 18-20 hours with tacit approval of the power division that has allowed power cuts on the basis of losses and recovery rate.

The two leaders concluded that a team led by Secretary Energy of AJK and the centre’s team led by an additional secretary should hold meetings and resolve all outstanding issues like electricity arrears, extended power cut hours, land acquisition for small hydropower projects and power evacuation from the hydropower projects.

The sources said the total power sector receivables at the end of December 2017 were estimated at about Rs790bn led by private sectors’ outstanding bills of about Rs590bn.

AJK tops the public sector defaulters, according to distribution companies, with Rs88bn after the power division waived Rs50bn to Sindh two years ago.

The meeting also discussed issues relating to difficulties in acquisition of land for the small hydropower projects, being executed by Private Power and Infrastructure Board (PPIB), and payments to the land owners.

A spokesman for the power division said the AJK Prime Minister was briefed by the power minister on various steps being taken by the power division for improvement of the system and service delivery for the electricity consumers.

He also briefed the PM on various initiatives that are being planned by the Power Division for the benefit of consumers which includes net metering, mobile meter reading, implementation of correct billing mechanism and other facilities.

Mr Leghari also sought assistance of the AJK government against frequent power theft.

The sposkesman said that on a number of matters pertaining to electricity, both the federal minister and the AJK PM had common views.

They agreed to entrust these matters to the expert level committee comprising officials from both sides to reach a conclusion for mutual benefit.

The PM of AJK appreciated the effort of the Power Division under the leadership of Sardar Awais Ahmed Khan Leghari for introducing consumer friendly policies in the power sector. He assured to extend his maximum assistance to the Power Division in this regard.

The two sides had agreed last year to increase the special AJK electricity rate from Rs2.59 to Rs5.79, and in return payments being made to AJK on account of net hydropower profit/water use charges should also be jacked up from 15 paisa per unit to Rs1.10 on a par with similar rates to Khyber Pakhtunkhwa and Punjab. However, this could not be implemented so far.

Published in Dawn, March 1st, 2018