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By Shahbaz Rana
Published: July 23, 2013
The Ministry of Finance had
wiped Rs342 billion off the circular debt before June 30 and the remaining
Rs138 billion was cleared on July 20. PHOTO: FILE
ISLAMABAD:
Amid
revelations of overpayment of billions of rupees to oil suppliers and power
producers while clearing Rs480 billion worth of circular debt, the federal
government has hired an audit firm, Deloitte Pakistan, to unearth any
wrongdoing.
The move
came in an attempt to address the concerns of industry people, but also exposed
ill-planning by the Ministry of Finance that made huge payments running into
billions of rupees without performing a pre-audit of the claims. The
responsible government ministries did admit to the hiring of the audit firm,
but shifted responsibility on each other.
Services
of Deloitte Pakistan, owned by Asad Ali Shah, the son of Sindh Chief Minister
Qaim Ali Shah, were hired after complaints of making payments to the oil
suppliers against shipments that were never made and against electricity that
was never produced, revealed sources in the ministries of water and power and
finance.
Denting
its credibility further, the Ministry of Water and Power did not invite bids
from audit firms and instead picked Deloitte to perform the task, which may
expose corrupt elements of the past regime and in the new government as well,
sources said.
Issues of
oil theft and fake electricity generation had also come in the limelight during
the tenure of the previous government, but they were swept under the carpet as
some of the federal ministers were said to be involved in the dirty business,
sources said.
So far,
nothing can be said with certainty but according to allegations levelled by the
industry people and the sources, the overpayments have been estimated at over
Rs50 billion out of Rs480 billion. Sources said there were differences between
Finance Minister Ishaq Dar and Finance Secretary Dr Waqar Masood on the same
issue but Dar pushed ahead with his plan to clear the circular debt.
The
Ministry of Finance had wiped Rs342 billion off the circular debt before June
30 and the remaining Rs138 billion was cleared on July 20. Out of the Rs480
billion, Rs75 billion was paid to Hub power plant, Rs41.4 billion to Kapco,
Rs6.9 billion to AES Pakgen, Rs4.6 billion to AES Lalpir, Rs9.9 billion to
Liberty power plant, Rs19.2 billion to Uch plant, Rs8.6 billion to Rousch power
plant and Rs8.9 billion to Engro power plant.
An amount
of Rs26 billion was paid to PSO in cash in addition to Rs48.6 billion in shape
of bonds.
“The
Ministry of Finance made payments on the basis of certified accounts provided
by the Ministry of Water and Power,” said Shafqat Jalil, the Director General
Media of the Finance Ministry. He said the audit firm was also hired by the
Ministry of Water and Power.
Pakistan
Electric Power Company (Pepco) provided reconciled accounts to the water and
power ministry that handed over the list to the finance ministry, thus,
responsibility for any irregular payment would fall on the water and power
ministry, officials said.
However,
Water and Power Minister Khawaja Asif said his ministry had nothing to do with
the circular debt payments and hiring of the audit firm. “The audit has been
ordered by the Ministry of Finance,” he added.
According
to a senior official of the finance ministry, the audit of debt payments was
part of a recent agreement with the International Monetary Fund and was made
part of the deal on the insistence of Asian Development Bank.
Special
Assistant to Prime Minister Dr Mussadaq Malik said figures of independent power
producers (IPPs) and power purchasers often did not match, underscoring the
need for a third party audit.
He
admitted that oil theft was going on in the power sector and 7% to 10% of oil
payments were siphoned off by the oil mafia. The theft was continuing in
connivance with PSO officials and IPPs, he added.
Malik said
the government made payments to the IPPs on the basis of net power generation
but there was no mechanism to verify the efficiency claims of the IPPs, which
say they were consuming more oil due to low efficiency.
IPPs’
Advisory Council Chairman Abdullah Yousuf claimed that the IPPs received
payments on the basis of reconciled figures and said the audit firm was hired
to check leakages in the government system.
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