ISLAMABAD - A parliamentary committee, on Thursday, was shocked to know that the incumbent government had approved the payment of Rs341.95 billion to the Independent Power Producers (IPPs) in just one day, which, they said, should be part of the 'Guinness Book of World Records.'
The Senate’s Standing Committee on Finance expressed surprise that summary for the purpose was moved, approved and the payment was made, all in a single day.
The committee decided to have more investigation into the matter; as it is the first time in history that a huge transaction was done so swiftly. “The Economic Coordination Committee (ECC) of the cabinet had approved a summary on June 27 2013, forwarded by the Ministry of Water and Power to clear the circular debt worth Rs341.95 billion,” an official of the Ministry of Finance informed the committee
The committee was surprised to know that the ministry had drafted the summary on the same day on which the ECC approved it, as normally it takes time before getting approved. An official of the State Bank of Pakistan (SBP) informed the Senate's body that it had released the amount of Rs341.95 billion to Pakistan Electric Power Company (PEPCO) on June 28, 2013, after receiving a letter from the Ministry of Finance on the same date. The committee was further stunned when Ministry of Water and Power Additional Secretary Nasir Jami informed it that the PEPCO released the amount for the IPPs also on June 28, 2013.
"Why the government made the whole payment on June 28, which shows its malafide intent," said Committee Chairman Senator Saleem Mandviwalla.
He said the Ministry of Water and Power's officials had told him that the Ministry of Finance had bypassed them in clearing the circular debt, just by writing a letter to the SBP. He questioned as to why ECC had approved the release of money, which was not its mandate. Senator Mohsin Aziz of PTI questioned the urgency in clearing a huge amount in just a single day. He said the government had skipped all the stages, which were required under the law.
He suggested that such a transaction should find a mention in the Guinness Book of World Records,' because it certainly deserved a place there.
Speaking on the occasion, Senator Kamil Ali Agha of PML-Q said the government could have saved Rs31.67 billion on the account of late payment charges, if it had not taken the decision in haste.
He asked about the reasons for the emergency payment, soon after the PML-N government took charge in June 2013.
The Auditor General of Pakistan's official admitted the government had not conducted the audit before releasing the amount. “The Ministry of Finance normally sends a summary to the AGPR for clearing any amount, before asking the SBP,” he said, and added the government had bypassed the process, which was a serious issue.
An official of the Ministry of Finance informed the committee that the government wanted to reduce the loadshedding by clearing the circular debt.
He further said the government was forced to clear the debt, as sovereign guarantee was about to recalled.
“The previous government PPP government had released more than 1 trillion for the power sector, without conducting a pre audit,” he disclosed.
The committee also discussed the execution of Benazir Income Support Programme (BISP), whose secretary informed the committee that BISP had blocked the accounts of 125,714 beneficiaries, on account of being suspicious.
He informed the BISP had also issued show cause notices to its staff for their alleged involvement in facilitating the suspicious beneficiaries. He informed the committee that biometric verification of beneficiaries would start from July this year, and would be completed in March 2017.
“The number of beneficiaries will increase to 5.4 million by the end of June 2016,” he said, and added that quarterly stipend of BISP had been enhanced to Rs4, 700 from Rs4, 500. He also informed that the audit of BISP’s spending was conducted by a joint committee of NADRA and the BISP itself.
Answering the questions on the presence of corrupt elements in BISP, the committee was told that complaints against them could be lodged with 450 tehsil offices of the organisation, while a hotline had also been established for the purpose. The senators proposed involving local government office holders for better management and establishing more offices in far flung areas. The committee was informed that 7, 000 SIM s had also been blocked through which text messages were sent to befool people that they had won BISP money. The committee also discussed the anomalies in the duty structure of paper in Pakistan. The representatives of the paper industry told the committee that more duty had been levied on the import of raw paper in Pakistan rather than on the import of printed-paper. The representatives also complained that taxes and heavy duty were affecting the country’s printing industry, and the situation had come to such a pass that the companies were getting their books and magazines printed from abroad.
They further said that heavy duty was also effecting the printing cost and quality of educational textbooks. The senators inquired from them the percentage of textbooks, printed from imported paper, and questioned whether the prices of textbooks would go down if the duty was lowered.
FBR Customs Tariff chief stated the demand for high quality imported paper also needed to be considered.
The committee recommended imposing duty on importing printed material to support the printing industry, which is the biggest after textile.
The matter was referred to the Senate’s Standing Committee on Commerce for further discussions.