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Govt bows to SC pressure; undoes power tariff hike

05 October, 2013

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ISLAMABAD: Facing immense pressure from the Supreme Court, the government on Friday withdrew its September 30 notification regarding the increase in power tariff.

The government requested the National Electric Power Regulatory Authority (NEPRA) for reconsideration of its determination of tariff of distribution companies (DISCOs) and the Karachi Electric Supply Company (KESC) for the financial year 2012-2013. On the other hand, a three-member bench of the apex court, headed by Chief Justice of Pakistan Iftikhar Muhammad Chaudhry, asked the NEPRA chairman not to endorse the government's stance in the determination of power tariff, saying it would examine the tariff determined by the regulator.

Attorney General of Pakistan Muneer A Malik, under instructions from the Ministry of Water and Power, stated that the federal government has requested NEPRA for reconsideration of its determination of tariff for DISCOs and KESC for the financial year 2012-2013. "The re-determination shall be effected from October 1, 2013 and will include subsidies as per guidelines issued by the federal government. In the circumstances, the federal government withdraws the current notification dated September 30, 2013," the AGP explained. In view of the AGP's statement, the court adjourned the hearing for two weeks.

Earlier, Justice Jawwad S Khawaja told Minister for Water and Power Khawaja Muhammad Asif that the government has dropped a nuclear bomb on the nation by increasing the power tariff massively which, he added, was a kind of exploitation under articles 3, 14 and 24 of the constitution. He also remarked that the government had failed to devise a strategy to recover Rs 441 billion from defaulters and was instead burdening those consumers who were paying their electricity bills regularly.

The chief justice said that the court was not against anybody but wanted to know under which law and procedure had the government issued the notification regarding increase in power tariff. He also pointed out that gas subsidy was being given to the fertiliser industry but the farmers were not benefiting from it due to the smuggling of fertiliser. Justice Iftikhar observed that provision of gas to power plants could reduce power tariff, and added that all generation companies should be run on gas.

Meanwhile, recalling the contention of Minister of Water and Power Khawaja Asif during the rental power project case that the federal government has no authority to influence the decisions of NEPRA, the chief justice asked him why was he giving up his earlier stance in this regard. Khawaja Asif told the bench that the government has been in power for only 100 days and has started different projects to produce low-cost electricity. He also said that gas from Iran would be added to the country's system by the end of next year.

The minister also told the court that two years would be required for mining of Thar coal, and the government was considering switching thermal power plants to coal. Asif citied the example of India, which produces 70 percent of its electricity through coal. The power minister stated that the government had been asking NEPRA to issue a notification in accordance with the law. He also said that the government would give consumers subsidy of Rs 150 billion once it submits an application to NEPRA.

"You should take revolutionary steps for the production of low-cost electricity," Justice Gulzar Ahmed told the minister. Meanwhile, NEPRA Chairman Khawaja Naeem said that the government had already determined the power tariff and its implementation should be allowed. He informed the bench that the power distribution companies had already dispatched electricity bills to the consumers in accordance with the September 30 notification.

The chief justice expressed annoyance with the NEPRA chairman and asked him whether he was holding the government brief. The attorney general told the court that the September 30 notification was not something new, as the formula had been operational since 1998. However, the chief justice said it was the government's fault and it would have to withdraw the notification.


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