PML-N govt paid Rs 480b illegally to power companies



The Public Accounts Committee (PAC) on Thursday termed the payment of Rs 480 billion in circular debt to power generating companies as illegal and directed the Water and Power secretary to conduct an audit into the production capability of private power companies and ensure the return of billions of rupees to the national exchequer.

The meeting of the PAC was held in the committee room of the parliament with opposition leader in the National Assembly Syed Khursheed Ahmed Shah in the chair.

The Auditor General of Pakistan (AGP) informed the meeting that payment of Rs 980 billion for circular debt made by the current PML-N government was a mega corruption scandal.

The government should have audited claim of power companies before payment of Rs 480 billion but it paid the money while violating rules and regulations.

The AGP in his report said that payment of Rs 342 billion to PEPCO was illegal because audit was necessary prior to payment but the government did not fulfill this responsibility.

He added that paying the company Rs 32 billion as charges of delayed payment was ridiculous and should be probed.

“The government has made a transaction of Rs 25 billion from the national exchequer as non-payment cash. The payment of this amount is also illegal. The government neither receives the dues of these power companies which were approximately Rs 23 billion, nor does it formulate any policy in this regard,” the AGP added and maintained that the government also paid Rs 270 million illegally to the power companies as payment of withholding tax.

The AGP informed the PAC meeting that the PML-N government had paid Rs 33 billion to power companies. He said that these power companies had even stopped generating electricity for many years while their production capability was zero.

He further said that Rs 28 billion had been paid to these companies illegally for generating electricity through gas. The report says that Rs 18.50 billion were paid to these power companies under the head of General Sales Tax (GST).

The report said that the government paid surplus amount of Rs 270 million to these companies on the basis of Open Cycle Cast.

The members of the committee inquired what method the government adopts to monitor the usage of furnace oil being supplied to these power companies. The Water and Power secretary told the committee that the government used heat testing to monitor the capacity. However, the private power companies had sought stay order against it from the courts. He said that surplus payment could be returned through heat testing.

The PAC chairman inquired why payments had been made to those companies without the testing process. The Water and Power secretary said that it was the responsibility of NEPRA, not the Ministry of Water and Power.

Awami Muslim League Chairman Sheikh Rashid Ahmed said that not a single case had been registered in the history of the subcontinent of the payment of Rs 480 billion by the government without audit.

The Water and Power secretary informed the meeting that in 2008, circular debt was Rs 161 billion which had reached Rs 460 billion in 2012 when the circular debt was paid after taking loans from the banks.

The meeting was attended by Sheikh Rasheed Ahmed, Junaid Anwar Chaudhry, Ramash Lal and Raja Javed Akhlas among others.


  1. This mega corruption scandal had been brushed under the carpet by Khurshid Shah and his friendly opposition. Now that there are noticeable cracks in the charter of mukmuka because of rangers powers in Sindh, public accounts committee has suddenly woken up to realize its responsibility. It will be used to extract concessions out of the government, so that PPP corruption by the high ups remains beyond accountability. Once the deal is done behind the scenes, friendly opposition will be re-invoked and PAC and Khurshid Shah will once again brush this mega scandal under the carpet. There is just one problem, the Khaki boot won't relent, until the fugitive 'eint say eint' warrior is made to eat a good helping of humble pie.

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