Govt’s failure to pay power subsidy to K-Electric may cause electricity shutdown in Karachi

NTDC had to pay Rs20 billion as markup to K-Electric, which had now swelled to Rs150 billion.

ISLAMABAD: The secretary power division has informed the Public Accounts Committee (PAC) that the federal government has not paid Tariff Differential Subsidy (TDS) to K-Electric (KE) which might lead to disruption in the power transmission system in Karachi, local media reported.

“The federal government provides a subsidy of Rs10 to Rs20 per unit to K-Electric to maintain the tariff differential,” said the power secretary during a meeting of the review and implementation committee of the PAC on Wednesday.

The official said the National Transmission and Despatch Company (NTDC) had to pay Rs20 billion as markup to K-Electric, which had now swelled to Rs150 billion.

Earlier this year, K-Electric had sought allocation of Rs 635 billion for Tariff Differential Subsidy (TDS) in supplementary budget in FY 2022-23 and in the budget for FY 2023-24, premised on 20 percent tariff increase from next fiscal year. According to the power utility company, estimates for FY 2023 included outstanding claims of Rs 455.6 billion.

The breakup of its receivables as on June 30, 2022 shows that outstanding receivables from GoP were Rs 318.4 billion, of which Rs 66.3 billion were pending with Finance Division, Rs 2.4 billion with Finance Division-others, Rs 204.1 billion pending with Power Division for ECC approval pertaining to period July 2016 to June 2022, Rs 6 billion with Power Division-other items and Rs 45 billion net amount pending with Nepra.

The power utility company argues that after addition of subsidy estimate of Rs 137.2 billion for FY 2023, total claims to be released in FY 2023 stood at Rs 455.6 billion.

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