ISLAMABAD    -   The sub-committee of Public Accounts Committee on Tuesday was informed that the power sector circular debt had been brought down to Rs18 billion per month from Rs40 billion in the year 2018.

The government was committed to bring the circular debt at zero by December 2020, which had currently grown to Rs812 billion, Secretary Power Division Irfan Ali told the committee.

Flanked by Secretary Petroleum Mian Asad Hayaud Din, he briefed the PAC body, which met here at the Parliament House, on the circular debt.

He said there were four reasons for its growth, including transmission/distribution losses, losses in recovery, non-budgeted subsidy and delay in tariff determination.

He said the Pakistan State Oil (PSO), Oil and Gas Development Company Limited (OGDCL) and Pakistan Petroleum Limited (PPL) were the companies, which were suffering from the circular debt.

He said that the subsidy was a main reason for the growing circular debt. The previous government had committed the subsidy of Rs 300 billion but it did not release. The present government had earmarked Rs 226 billion for the subsidy in the budget, which would help control the circular debt, he added.

He said the government was taking solid steps to control the power theft. Citing the example of Hyderabad Electric Supply Company (HESCO), he said the power in its area was stolen through ‘Kunda’ (hook) or use of a sophisticated software to slow down meters. “We have busted gangs with their laptops who were stealing power in a professional way.”

With solid measures to control power theft in place, the government had saved Rs 122 billion, he added.

Power theft, he said, had reduced in all the power distribution companies (Discos). The menace had been controlled in 40 feeders of the Peshawar Electric Supply Company (PESCO) and it would be overcome in 100 feeders by the end of December, he added.

Meanwhile, discussing audit paras regarding the Ministry of Maritime Affairs, the PAC subcommittee, headed by Senator Sherry Rehman, directed the National Accountability Bureau (NAB) to probe award of contract by the Port Qasim Authority management in violation of its Board of Director (BOD) directives causing huge loss of Rs672.948 million.

The audit officials pointed out that the board of directors in its meeting on June 28, 2013, had allowed the PQA management to hire tugs for three months. The PQA’s Operation Division was directed to undertake a study for evaluating the cost-effective option between hiring, direct purchase or lease purchase of new/used tugs, and present the report before the board by July 20, 2013 for final decision.

The audit officials observed that the management awarded the contract to M/s Global Marine Services for hiring of two tugs for port operation. The tugs were hired for $ 5,150 and $ 3,895 for eight hours per day with fuel cost of $1,425 and $1,292 respectively for a period of two years in violation of the board’s decision.

The management did not adhere to the instructions of the Board of Directors of PQA and continued the contract without approval.

The audit opined that that award of contract to M/s Global Marine Services amounting to US$ 6.729 million equivalent to Rs. 672.948 million was irregular and an example of undue favour to the contractor.

Responding to the audit’s contention, the secretary maritime affairs said the board had approved award of the contract for hiring of two ASD tugs to M/s Global Marine Services for a period of two years, with the deletion of the subsequent conditions.

The reason for delay in obtaining the approval of the board was due to the fact that there was no Board of Directors (BOD) of Port Qasim Authority (PQA) in the year 2014, he added.

The secretary replied that the fresh approval was sought soon after the new present board was constituted.

The audit officials, however, maintained that the contention of the management of PQA was not correct while awarding the contract.

The committee referred the matter to the National Accountability Bureau (NAB) to inquire into the matter and fix the responsibility and submit report to the PAC.