Balochistan ‘not cooperating’, ministry complains to ECC

ISLAMABAD: The power division has complained to the Economic Coordination Committee (ECC) of the federal cabinet that the Balochistan government is not cooperating in finalisation of Rs86 billion discount in electricity bills of agricultural tube wells, it emerged on Sunday.

Informed sources said the power division has taken up with the ECC the matter of Rs218bn arrears outstanding against federal and provincial governments and Baloch farmers besides extension of subsidised power rates along with two proposals. The proposals required Balochistan government’s input, as it would have to shoulder the responsibility of providing funds worth Rs27.6bn or Rs52bn, the sources added.

However, the power division complained to the ECC that the provincial government was not responding to make financial commitments.

Power division’s delegation to visit Quetta to seek province’s financial commitment

“The Balochistan government has not offered the comments despite many reminders”, the power division placed in writing before the ECC.

The sources said Power Minister Omar Ayub Khan-led delegation comprising power secretary Irfan and officials of the power division and Quetta Electric Supply Company (Qesco) would meet Balochistan Chief Minister this week to seek a firm future fiscal commitment and clearance of backlog besides support for launching a drive for the recovery of unpaid bills and against power theft in Balochistan.

The sources said Finance Minister Asad Umar, while presiding over the ECC meeting last week, had concluded that the continuation of subsidy for farmers in Balochistan could not be finalised without the commitment of the provincial government. It desired a responsible approach from the government of Chief Minister Jam Kamal Khan Aliyani, they added.

The power division claimed it was supporting extension of the subsidy scheme “with great reluctance” due to outstanding liabilities and existing financial crunch only if the federal finance ministry and the Balochistan government made “firm commitment to clear outstanding subsidy arrears and streamline the subsidy payment process”.

The power division said the finance ministry and Balochistan government would be required to pay Rs767.57 million and Rs1.15bn, respectively, with the 40:60 per cent share on top of Rs10,000 per month to be paid by tube well consumers using 30-HP motors.

The second proposal envisaged monthly payment of Rs1.12bn and Rs2.13bn by the federal and provincial governments with 40:60 share and Rs10,000 by consumers using 50-HP motors due to low underground water table.

Simultaneously, the Alternative Energy Development Board (AEDB) in collaboration with the Balochistan government would work expeditiously on solarisation of agriculture tube wells and drip irrigation system in the province. The provincial government would also be required to extend full legal and operational cooperation in recovery of dues from electricity defaulters, particularly agri-consumers.

The power division also sought receivables for an intervening period i.e. after withdrawal of subsidy from July 2010 to November 2012 under the payment formula recommended by the cabinet committee on energy in January 2015.

Earlier, the subsidy to agri-consumers was provided from the financial year 2001-02 to 2009-10. Despite having financial constraints, the subsidy was restored in pursuance of the ECC of the cabinet decision for a period of two years (from Dec 1, 2012) but without explaining the fate of intervening period (i.e. from July 1, 2010 to Nov 30, 2012). The stakeholders, however, did not discharge their liabilities and Rs54.64bn remained outstanding against the stakeholders by the end of two-year period in December 2014.

A committee constituted by the cabinet committee on energy on recovery of receivables and addressing the issue of circular debt, decided in February 2015, agreed to fix the subsidy for the intervening period (from July 2010 to Nov 2012) as per subsidy package approved by the ECC in November 2012.

Under this decision, a tube well owner was required to pay Rs6,000 per month and remaining Rs44,000 share was to be paid by the federal and provincial governments with the ratio of 40:60 share in case of maximum bill of Rs50,000 per month. Any excess amount was also required to be paid by the consumer.

In June 2015, the rate was revised to a maximum of Rs75,000 per month from January 2015 to December 2016. Under the revised mechanism, the consumer was made to pay Rs10,000 and remaining Rs65,000 by the Centre and Balochistan government at the ratio of 40:60 share.

The power division said the provincial government in collaboration with QESCO constituted “district monitoring committees comprising relevant DCO, XEN / SDO and a representative of Zamindar action committee. The district committees surveyed and inspected the tube well connections in their areas for the authenticity of connected load and verified that the actual average load was 48 horsepower instead of 30-HP.

Despite difficult conditions, particularly law and order issues, Qesco made perpetual efforts at all levels to implement ECC’s decision in letter and spirit but most of the consumers were reluctant to pay even their agreed due share of Rs10,000. “None of the consumers is ready to pay any amount over and above Rs75,000, besides their previous arrears.”

This deteriorating situation resulted in accumulation of Rs29.889 billion as arrears against agriculture consumers from January 2017 to December 2017. “Total arrears surged to Rs218 billion till February 2018. In this regard, the support provided by the law enforcement agencies and administrative assistance of Balochistan government was not up to the mark. Consequently, Qesco was not able to recover outstanding arrears from its agri-consumers. Qesco received only Rs1.253bn against billing of Rs31.142bn from January 2017 to December 2017. As a result, the recovery percentage from the agri-consumers has been observed as only 4pc.”

Agriculture is one of the major sources of livelihood in Balochistan. To bring the farming community at par with other farming communities of Pakistan, the government had promised that Centre would pay a portion of their electricity bills to run agriculture tube wells and continue to provide power subsidy on tube wells in Balochistan.