KARACHI: The government has decided that electricity connections of any person, department or ministry or any other private entity will be disconnected if they fail to pay their bills for consecutive three months.
The decision was made during the meeting of the Economic Coordination Committee of the cabinet chaired by Finance Minister Asad Umar.
The minister also directed the Power Division to take strict legal action against officials and individuals involved in power theft and not show any leniency on the issue. Those who pay their bills will be provided prepaid meters.
The meeting also discussed the issue of circular debt that has accumulated over the years to a hefty sum of Rs.1188 billion.
On the presentation of the special audit report on payment of circular debt of Rs. 480 billion by the Auditor General of Pakistan, the ECC directed to hold an operational and financial audit of electric power distribution companies (Discos).
It was decided that the Auditor General will complete the audit of four highest loss making discos in one month and the audit of the entire sector within two month after the approval from the cabinet.
Previous govt discontinued industrial support package
The committee was also briefed on the impact of industrial support package, Azad Jammu and Kashmir subsidised units, Balochistan agricultural tubewells, FATA receivables, and the impact of existing time lag on tariff determination mechanism of NEPRA.
The ECC observed that the previous PML-N government had decided to discontinue the provision of subsidised power supply to AJK in the 2018 budget, and also discontinued the industrial support package. The matter will be brought to attention of the federal cabinet.
Supply RLNG to urea manufaturing plants
The ECC also decided to address the urea fertilizer shortage in the country, and supply Re-Gasified Liquefied Natural Gas (RLNG) to three urea manufacturing plants for a period of four months starting September.
The government will share half of the cost and these three operational plants will utilise their full potential, while the decision to import fertilizer will be taken after taking into account their production capacity.
The ECC directed Ministry of Industries and Production to workout figures about actual production and consumption of the urea during 2017-18 and the estimates for 2018-19, in consultation with Ministry of National Food Security and Research and submit a report in the next meeting.
It was also decided to supply RLNG for urea production for four months from September to December 2018 to three closed fertilizer plants namely Fatimafert, Agritech and Pak Arab. The ministry of industries will determine the total subsidy on running all three plants.
Furthermore, the ministry will determine the windfall gains reaped by the fertilizer industry, in light of the net variable contribution margins as a result of charging higher rates as well as exports during 2017-18 and 2018-19.
The windfall gains may be adjusted against the subsidy outstanding in favour of fertilizer industry, under the fertilizer subsidy schemes which were in vogue during the preceding three financial years.
The ECC was also updated on the sale of K-Electric and issued directions to the departments concerned to formulate their recommendations for the Cabinet Committee on Privatisation (CCOP).