ISLAMABAD - A parliamentary committee has expressed displeasure on paying Rs480 billion to the Independent Power Producers (IPPs) to clear circular debt without conducting pre-audit that could save billion of rupees.

The sub-committee of the Senate Standing Committee on Finance under the chair of Senator Mohsin Aziz has discussed the payment of Rs480 billion to IPPs to clear circular debt in 2013. Earlier, the committee had constituted a sub-committee to review the objections raised by Auditor General of Pakistan on the payment made to IPPs. The sub-committee was also given a task to identify the reasons for making huge payment in a single day.

The committee was informed that the government had paid Rs480 billion to the IPPs out of total due payment of Rs503 billion to improve the power situation in the country in 2013 when incumbent government took charge. The government withheld Rs22.9 billion of the IPPs, as they had not honoured their commitment, an official informed the committee.

Senator Aziz has showed concerns for not conducting pre-audit of paying huge amount to the IPPs. “The government could have saved billion of rupees if it conducted pre-audit of the payment,” he said.

The officials of the Ministry of Finance defended the government’s decision of making payment without pre-audit by saying that it had released the funds to improve the power situation. The government can make the payment without conducting pre-audit in any emergency situation, the officials added. However, the committee members have not satisfied with the arguments of the officials of the ministry.

Giving their viewpoint, the Accountant General of Pakistan Revenue’s official informed the committee that pre-audit of any payment could be conducted within three days.

The Federal Board of Revenue (FBR) also gave detailed briefing to the committee. The FBR informed that 29 IPPs are registered with it and they generated electricity worth of Rs2,800 billion in five years. The IPPs paid only Rs16 billion as sales tax as against Rs466 billion. “We can review the details if Wapda provide complete details of payment of Rs480 billion,” the FBR official added.

Committee member, Senator Kamil Ali Agha has gone down hard on FBR for not recovering due taxes from the IPPs. He asked why FBR is not taking action against strong IPPs when it never compromise on common people in tax matters.

The sub-committee has decided to review the further objection in the presence of Auditor General of Pakistan and getting all related documents from different departments in next meeting.