NewsJune 06, 2017
Circular debt: ‘Rs92.65 billion paid to IPPs illegally’
ISLAMABAD: A sub-committee of the Senate Standing Committee on Finance has reported that a payment of Rs 92.65 billion out of Rs 480 billion paid to independent power producers (IPPs) as circular debt in June 2013 was illegal and unjustified, which should be recovered from recipients.The Senate after receiving this report has written to the finance and water and power ministries to act on the report and inform the House within two months. According to law, any ministry, which is required to respond, can submit its reply within two months and is bound to implement the findings in case of no reply within the stipulated period.
It has also been recommended that the case should be referred to FIA/NAB for a thorough probe so as to fix the responsibility and action against the authorities allowing such payments as well as the recipients.
The sub-committee report, a copy of which is available with The News, reads, “The committee vigorously recommended that since there existed serious negligence and that in admissible payment was made without any validation, which are of totally illegal nature must be probed in detail by FIA/NAB and responsibility be fixed for these payments on the individuals/ministry and its officials. The committee also strongly recommended the recovery be made from all recipients i.e. IPPs who have received these over and unjustified payments.”
According to the report, it has been found that the non-adjustment of liquidated damages against the claim of IPPs amounting to Rs 22.91 billion was an unlawful act by Ministry of Water and Power and recommended that the such payment should had been adjusted instead of setting aside prior to clearing the circular debt.
It also says that the payments made for the idle capacity of power plant and forced/partial outrages amounting to Ra 32.45 billion and Rs 17,921 million respectively was totally admissible unjustified and unlawful. Therefore, appropriate action must be taken against the responsible persons besides recovering the amount.
The non-cash settlement of circular debt amounting to Rs 25.104 billion was illegal, therefore it is recommended that the appropriate action should be taken against the CFO of Pepco for non-provision of all the relevant invoices to audit as well as to the sub-committee, the report said.
According to the sub-committee which recommended similar action over the following payment too, it has also been observed that the maintenance of an inventory and back up fuel was responsibility of the IPPs and declared that Rs 2.711 billion paid to IPPs on account of capacity payment was illegal.
The reimbursement of withholding tax amounting to Rs 264.55 million to IPPs by the CPPA was irregular and directed the FBR to recover said amount from the IPPs.
With regard to payment on account of open cycle cost (OCC) amounting to Rs 263.963 million, the sub-committee observed that the said amount was not covered under the PPA and that there was no ownership to the extent of it authorising; therefore, it was grossly unjustified and its is intense recommendation is made that the action should be taken against the authority which authorised the said payment.
The NTDC made the payment of Rs 84.950 million contrary to the decision of the ECC dated 29/5/1999 tariff and recommended that necessary action should be taken against the person involved in the calculation of the said payment.
The sub-committee comprises Mohsin Aziz of PTI (convenor), Kamil Ali Aga of PML-Q and Saud Aziz of PML-N. An unnamed spokesperson of Ministry of Water and Power told this correspondent that the report had been received and was being analysed, adding that response would given within two months.
Courtesy www.thenews.com.pk
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