The high ups at the National Electric Power Regulatory Authority (NEPRA) have caused a loss of Rs 48.62 million to the national exchequer by not imposing fine on defaulting power distribution companies (DISCOs), as an interpretation of relevant rules by the Law Ministry states that NEPRA is under obligation to impose fine and recover it.
The NEPRA Fees and Fines Rules, 2002 enjoin upon every licensee to pay annual fee in respect of any financial year in advance within 30 days of the expiry of the preceding financial year, provided that the licence fee for the first financial year is paid within 30 days of the grant of license. In case of default, NEPRA is empowered to impose a fine of Rs 300,000 for the first day of default, and Rs 10,000 for every subsequent day of violation until the date of payment.
The DISCOs delayed the payments for years, but NEPRA authorities did not initiate any proceedings to impose fine. An audit calculated the fine amount as Rs 48.63 million. The NEPRA authorities were of the view that the imposition of fine was a discretionary tool and needed to be used with utmost care. They further held that the defaulting licensees were state-owned entities who were running in loss and the imposition of fines would have added to their financial difficulties. The audit insisted that the non-imposition of fine was an example of favouring and patronising defaulting public sector licensees and brought loss to the public exchequer. The Public Accounts Committee in its meeting held in July last year took notice of the situation and directed that the case be referred to the Law Division through Cabinet Division for the clarification of rules regarding the imposition of fine.
According to sources in the Cabinet Division, the Law Ministry in its opinion on the issue said the authority should first get an explanation from the person concerned, and in case the explanation was not accepted, it should direct the registrar to issue show-cause notice to the person concerned with the specific allegation and the amount of fine to be imposed. Furthermore, if the response to the show-cause notice was not accepted, then the authority should determine the amount of fine. It held that the legal provisions clearly show that the authority’s discretion in imposing fine was not absolute, but should be exercised with due care and caution by keeping in view the facts and circumstances of each case.
NEPRA suffers Rs 48m loss by not imposing fines on DISCOs
