KARACHI: The K-Electric on Monday agreed to pay Rs500 to Rs700 million in duty, collected from consumers every month from September 2024, to the provincial government after the Public Accounts Committee (PAC) of the Sindh Assembly warned the city`s sole power utility of financial penalties and possible criminal proceedings if it failed to comply.

However, the PAC meeting, headed by its ChairmanNisar AhmedKhuhro,wasinformed by KE representatives that the utility`s payment of Rs32 billion in electricity duty, collected from consumers up to Aug 2024, was conditional on the recovery of Rs23.5bn from the Karachi Water and Sewerage Corporation (KWSC) and Rs7.4bn from other provincial government institutions.

The meeting, attended among others by committee members Qasim Siraj Soomro, Khurram Karim Soomro and Makhdoom Fakhar-uz-Zaman, K-E`s Sadia Dada, KWSCchief operating officer Engineer Asadullah Khan and director general audit Sindh, was reviewing the issue of K-E`s payment of Rs32bn collected from consumers as duty to the Sindh government.

Ms Dada told the PAC that the KE was owed Rs23.5bn by the KWSC and Rs7.4bn by various provincial institutions. `If these institutions pay their dues to KE, the power utility will pay the full amount of the Sindh government`s duty,` she added.

She added that the KE collects Rs500 to Rs700m monthly in the form of a six per cent electricity duty from the 6.5m households that it serves in Karachi. It may be noted that out of six per cent electricity duty, the KE deducts three per cent as service charges of collecting the duty.

Despite facing financial losses, she said, the KE paid Rs721m in electricity duty to the Sindh government in April 2024 and Rs545m in May 2024.

KWSC COO Engr Asadullah Khan informed the committee that under agreements signed between the federal government and theAbraaj Group on Nov 14, 2005, and April 13, 2009, the federal government had committed to covering the bills of strategic customers, including the KWSC, prisons and the high court if they failed to make payments.

He pointed out that the agreements did not carry the signatures of the Sindh government or KWSC and that the Rs23.5bn dues were, in fact, owed to the federal government.

However, the KE`s representative argued that according to an SHC decision, the provincial government and the KWSC were responsible for paying the Rs23.5bn owed to the power utility.

Mr Khan said that the federal government had constituted an arbitration committee to address the matter of past dues. He also said that the KWSC itself is owed Rs5bn by the provincial government departments and an additional Rs10bn by federal institutions.

The PAC directed the KWSC to send the issue of payment of water utility dues against KE and federal and provincial governments` institutions to the Sindh cabinet for resolution.