ISLAMABAD, Feb 27: The government is facing difficulties in notifying the power tariff revised by the National Electric Power Regulatory Authority (Nepra) this month for Wapda companies , owing to reservations over the provision of Rs45 billion as subsidy, it has been learnt.

Nepra had determined on Feb 7, a revised tariff for Wapda companies involving an average of 2.5 per cent increase for domestic consumers and a major reduction in commercial, agricultural and industrial tariff.

Under the law, the government is required to notify the Nepra determination within 15 days or ask for a review. "The time period expired a week ago and a legal stalemate currently exists," said an official.

He said the water and power ministry recently informed Nepra that it had reservations over the determination and it could not implement the revised tariff. The tariff determinations for Wapda companies and the Karachi Electric Supply Company had been under consideration of the finance ministry for a few weeks, he said.

The government had asked Nepra to provide detailed calculations of the revised tariff, he said. Nepra, however, took the stand that it had involved a senior officer of the ministry in all calculations provided in the 50-page determinations.

"We have not asked for a review in legal terms but sought some additional information, which could be treated as a review request, to gain some time," the official said and added that the division of Wapda companies and tariff had not proved as easy as originally perceived.

The sources said the government was not only objecting to provision of about Rs45 billion in subsidy but it was not yet prepared to give independence to the corporate companies of Wapda, including the distribution companies and the National Transmission and Dispatch Company.

Once the government notified separate tariffs for all the distribution companies, they would become financially independent and the government would lose its command over the power sector, they said.

The sources said the government had earlier set a deadline of Dec 31, 2004, to complete the corporatization of the Water and Power development Authority through separate tariffs and separation of the Pakistan Electric Power Company from Wapda. The deadline was missed and the companies have now been given an understanding that they would get independence by June.

The sources said another reason for delay in notification of the revised tariff was that the ministries of water and power and finance and the World Bank had not been able to determine as to whether there should be a pool of resources to subsidize the loss-making companies or it should come directly from the federal budget.

A water and power ministry official said Nepra's determination did not clarify the cost of power supply by different distribution companies and it determined the tariff by accepting 15 per cent losses as prudent cost.