ISLAMABAD, Feb 20: The Water and Power Development Authority (Wapda) has asked the federal government to make at-source deduction of Rs33 billion outstanding against provinces and public sector organizations.

A senior Wapda official told Dawn that the demand was made by Wapda chairman Lt-Gen Zulfiqar Ali Khan to the ministry of finance as part of preparations to meet the conditionalities of the World Bank and International Monetary Fund (IMF) under the Financial Improvement Plan (FIP) of Wapda.

Wapda sources said that Zulfiqar accused the finance ministry for failure to adhere to the FIP prepared in consultation with the IMF and the World Bank last year. He said that Wapda has been successful to recover 100 per cent dues from the private consumers but public sector arrears had been increasing from Rs20 billion last year to 33 billion at present.

These sources said that Wapda had issued notices to all the public sector consumers including provincial governments, AJK, FATA and agricultural tubewells in Balochistan but to no avail. The adviser to the prime minister on finance Shaukat Aziz, said these sources, promised to see as to how the finance ministry could make at source deductions before it released budgetary shares to provincial governments and other public sector organisation by March 31.

Last week, the Wapda had also told the finance that it would have to arrange Rs17 billion otherwise the utility would be left with no option but to increase consumer tariff by an average 40 paisa per unit.

Wapda’s revenue shortfall was estimated at Rs28 billion by 2003, which was to be met through various measures under the financial improvement plan that could not be adhered to and the revenue shortfall rose to Rs35 billion.

The Wapda and finance ministry are currently revising Wapda’s FIP that has to be shared with the IMF and the Bank by next month to meet conditionalities of the $350 million structural adjustment credit.

The non-compliance with the FIP has been attributed to continued increase in fuel prices, failure to collect electricity arrears to the agreed limit and reduction in line losses to 15 percent and inadequate increase in tariff since start of the fiscal year.

The finance ministry sources, however, suggest that there was no provision for budgetary support to the utility in the budget 2002-03 on the understanding that the Wapda would be self- reliant through measures under the FIP.

They admit that some of the factors in the non-compliance of FIP were out of Wapda’s control, any recourse to budgetary support would result in increased fiscal deficit. Wapda is already accusing the ministry of withholding sales tax refund to the utility to show higher revenue collection to the donors.

Finance ministry sources said that Wapda has also failed to contain its administrative expenditure at less than 10 per cent during 2002-03 agreed with the donors.

These sources said that the IMF and the Bank were opposed to the budgetary support and wanted the Wapda to increase tariff, curtail line losses and administrative cost and recover Rs33 billion receivables from the public sector.