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KMC not getting funds to pay employees’ salaries

December 21, 2012

KARACHI, Dec 21: Over 20,000 employees of the Karachi Metropolitan Corporation are facing hardship in making ends meet because they have not been given their salaries for the month of November thanks to the Sindh government which has not released the required amount to the civic organisation, it emerged on Friday.

There are around 34,000 employees in the KMC and their salaries are routinely delayed because of a tug of war between the provincial government and the civic organisation over release of funds to the latter on time as well as an increase of its share in the head of the Octroi Zila Tax (OZT).

Sources said that the monthly salary bill of the around 34,000 employees of the KMC ranged between Rs840 million and Rs850 million. Every month, the Sindh government transferred around Rs827 million — Rs327 in the head of OZT share and Rs500 million as grant-in-aid from the chief minister — to the KMC so that it could give salary and pension to its serving and retired employees, the sources added.

They said that earlier the funds from the Sindh government used to come regularly without much difficulty. However, following the beginning of the current financial year the KMC’s share of the OZT of Rs326 million came regularly, but the grant-in-aid of Rs500 million became erratic.The sources said that the provincial government had released only Rs326 million a few days back to the KMC, which had paid around Rs100 million to the Karachi Electric Supply Company and remaining Rs226 million was distributed among pensioners as well as majority of the lower-grade employees (from BPS-1 to BPS-5).

While the grant-in-aid from the CM was yet to be released, the Sindh government had been insisting that the KMC lower its expenses and adopt measures to increase its revenue base, the source said. However, the KMC had been insisting that its share in the head of OZT, which had been fixed years back, be rationalised and increased and its dues be paid to it, they added.

Sindh Finance Secretary Naveed Baloch was of the opinion that the KMC demand for Rs827 million under different heads was on a higher side and could easily be rationalised and reduced by Rs100 million to bring it down to Rs727 million. Besides, he thought that the KMC through its own resources could generate another Rs100 million per month bringing the requirement further down to Rs627 million.

Referring to the finance secretary’s contentions that the KMC administrator had claimed that over 5,000 employees had been laid off but its financial impact was not visible in the monthly salary bill, Chief Secretary Raja Mohammad Abbas said in a communication that the government had been releasing the monthly grant of Rs500 million but the arrangement was not sustainable and required a permanent solution by rationalising the expenditures and resources of the KMC.

No salary for Christian employees for Xmas

While Christmas is around the corner, about 2,500 Christian employees are also among those 20,000 KMC staffers who have not been paid their salaries.

The sources said that it had been decided by the government that in case of a religious festival the employees were given an advance salary, but unfortunate Christian employees could not think of the advance remuneration because they had been deprived of their past month’s salary.

They said that no funds were released on Friday, the last working day of the week, and even if the government released the funds on Monday, for which there were dim chances, the minority community members could not get their salaries in time for Christmas, which was on Tuesday.

KMC chief officer Matanat Ali Khan told Dawn that the civic agency was in contact with the Sindh governor, the chief minister and the chief secretary for the release of grant-in-aid and it was being assured that the funds would be released soon.

KMC demands Rs14.9bn OZT share annually

According to a working paper of the KMC to demand an upward review in the OZT share, in 1991-92 the octroi collection was Rs2.014 billion whereas in 1998-99 it was over Rs4 billion. In 1999, the octroi was abolished and a matching grant to be funded from the sales tax was fixed, but the correct amount was rarely paid to the KMC, which had been paid around Rs5.121 billion less compare to its actual share.

It said when the octroi was abolished in 1999 the total import value only from the seaports was $4.68 billion. At that time one dollar was equal to Rs44 and the total import value in PKR was Rs299 billion and Karachi’s share (1.35 per cent) came to Rs4 billion. While the import value of goods had now increased to $13 billion, which comes to Rs1,105 billion if calculated at Rs85 per dollar, the Karachi’s share now comes to Rs14.9 billion annually.

The KMC demanded that the release of funds in lieu of OZT may be increased rationally to Rs14.9 billion and the short released amount of Rs5.12 billion may be paid to the civic body so that it could overcome its financial issues and could function properly.