Centre to deduct Rs161bn from provinces' NFC share to settle power dues

• 25% of reconciled electricity dues "may be deducted" at source.
• Leghari says deductions would apply only to reconciled accounts.
• Minister says three power distribution companies to be privatised.

ISLAMABAD: Power Division officials informed senators on Friday that the federal government is planning to use the National Finance Commission (NFC) award to deduct Rs161 billion in unpaid energy bills from the shares of all four provinces.

The Council of Common Interests (CCI) has already approved this plan, The News reported.

The contentious plan would dock Rs68 billion from Sindh, Rs42 billion from Punjab, Rs41 billion from Balochistan, and Rs10 billion from Khyber Pakhtunkhwa. It was reviewed at a Senate Standing Committee on Energy meeting presided by Senator Mohsin Aziz. These dues have been owed to the provincial departments for almost three years.

Only Punjab, according to officials, has as yet helped in reconciling dues; the other provinces have been dragging their feet for more than two years.

Federal Minister for Energy Awais Leghari said 25% of reconciled electricity dues could be deducted at source, following approval from the CCI.

The remaining amount, he added, would be recovered later. Leghari clarified that the deductions would apply only to reconciled accounts and said the matter had been taken up with the Finance Division.

On privatisation, Leghari said three power distribution companies — Islamabad Electric Supply Company (Iesco), Faisalabad Electric Supply Company (Fesco), and Gujranwala Electric Power Company (Gepco) — will be privatised in the first phase, with Lahore Electric Supply Company (Lesco), Multan Electric Supply Company (Mepco), and Hyderabad Electric Supply Company (Hesco) to follow.

The Guddu and Nandipur power plants are also headed for privatisation. Assuring senators, Leghari promised employee protection during the privatisation transition.

The Privatisation Commission officials informed lawmakers that a financial advisor has been appointed for the first three utilities and will submit its report by the end of May. Roadshows and investor briefings will follow, with the full transaction process expected to conclude within six months.

Meanwhile, National Electric Power Regulatory Authority (Nepra) Chairman Waseem Mukhtar noted a Rs7.41 per unit reduction in power tariffs due to fuel and quarterly adjustments. But Senator Aziz warned that the relief may be short-lived. Mukhtar echoed the concern, citing plummeting hydropower output caused by weak snowfall and drying reservoirs.