ISLAMABAD - The Senate Standing Committee on Finance offered the Public Accounts Committee to jointly investigate issue of Rs480 billion payments made to the power companies, which the former termed as a serious corruption.

“Senate finance committee is aware of the fact that the matter is under the cognizance of the Public Accounts Committee and wants to have joint sitting with Public Accounts Committee to discuss the matter of payments of power sector circular debt,” Chairman Senate Standing Committee on Finance Senator Saleem Mandviwalla said in a letter written to Syed Khurshed Shah, Chairman PAC. He termed the payments of Rs480 billion to the power sector companies as a tantamount to the serious corruption. The PML-N government, soon after coming into charge in June 2013, had cleared the circular debt.

In the letter, Mandviwalla said that the Senate Finance Committee has held its meeting on the Auditor General Report about the payments of circular debt on 20th January. During the hearing, the committee was astounded at the enormity of willful wrong payments made to the power sector companies in complete violation of rules and procedures and level of loss suffered by the national exchequer. He also requested that first the members of both committees have one on one discussion to discuss the matter before taking it to the joint sitting.

According to the audit report compiled by the Auditor General of Pakistan (AGP), the government had failed to verify the claims before clearing the circular debt and made avoidable payments worth Rs165 billion to the Independent Power Producers (IPPs). The audit report termed Rs342 billion paid to the Pakistan Electric Power Company (PEPCO) irregular.

According to the key findings of the report, the government had paid Rs31.7 billion as avoidable payment of late payment charges. Similarly, the government made unjustified Rs17.733 billion payment on account of General Sales Tax (GST).

Other findings included loss of revenue in shape of interest upon excess payment on account of CPP under interim relief tariff— Rs 14.960 million; irregular capacity payment on account of non-provision of data of metering committee Rs 4.630 billion; discrepancies in meter reading system for energy payments Rs 16.336 billion and undue favour on account of extra energy payment due to implausible determination of Net Electrical Output (NEO) Rs 37.122 million. It also included irregular payment on account of reimbursement of withholding tax on dividend Rs 264.655 million; extra payment made due to non-adherence to ECC’s decision regarding indexation of Rs 84.590 million; loss due to production of electricity on High Speed Diesel (HSD) instead of gas Rs 35.223 billion; loss due to production of electricity on Residual Fuel Oil (RFO) instead of gas – Rs 6.253 billion and unjustified payment on account of General Sales Tax (GST) Rs 17.733 billion.