KCCI Press Release

KCCI urges NEPRA to declare KE’s plea as ‘infructuous’

PR No.: PR-/84
Released On: February 24, 2021
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Islamic Date: Rajab 11, 1442 A.H.

KARACHI: Senior Vice President Karachi Chamber of Commerce & Industry Saqib Goodluck, while referring to NEPRA’s public hearing on Fuel Cost Adjustment (FCA) and Quarterly Tariff Adjustment (QTA), urged NEPRA to declare K-Electric’s plea as ‘infructuous’ and reject it immediately while the Gas Infrastructure Development Cess (GIDC), instead of being imposed on consumers, should be made part of the subsidy provided by the government to make electricity rates affordable.In a statement issued, Senior Vice President KCCI pointed out that K-Electric has applied for a raise in tariff on the ground that they have to pay GIDC but imposing this burden retrospectively was unacceptable hence, KE’s request must not be taken into consideration. If GIDC was not being collected from Independent Power Producers (IPPs) then why would they (the government) be taking it from KE”, he asked, adding that even if it was so then the government will have to issue a notification in this regard in light of relevant laws.Saqib Goodluck mentioned that the judgment passed by honorable Supreme Court of Pakistan revalidated the GIDC Act in which the 2nd proviso of the subsection 2 of section 8 provides that the GIDC under the GIDC Act 2011 and GIDC Ordinance 2014, if not already collected from the industrial consumers shall not be collected from them so how could they demand GIDC in shape of electricity tariff from all the electricity consumers.He further questioned that why an old recovery was being imposed retrospectively on consumers when it was purely KE’s fault which should have taken some measures at that point in time by taking it immediately and setting aside an amount for a known liability instead of requesting it to be charged retrospectively from consumers.He was of the view that the tariff determined by NEPRA on the application of KE or any other disco is adjudged and recommended to the government after due diligence and the government, as per its own policies to support consumers, take part of that tariff upon themselves in the shape of subsidy. “For instance, if the determination of NEPRA is Rs16 and the government decides that it is too high, they declare the rate for instance Rs12 so the variance of Rs4 is paid to KE and WAPDA in the shape of subsidy.”He said, “Our point is that if GIDC was also included in those times then the same would have been treated by the government as an expenditure if so, and the tariff would have been announced by the government as per consumers’ appetite and affordability. Hence there was no question of retrospective because that would have taken care at that time. Since they have not done this, it is their fault but the government should also come to a rescue that if they can allow IPPs, they should also allow discos and consumers must not be burdened with retrospective liability purely because of the fault of KE.” 

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