ISLAMABAD -  A parliamentary committee on Thursday noted that the government had paid Rs480 billion to Independent Power Producers (IPPs) in a single day to clear circular debt without conducting an audit, which was in violation of rules.

The committee noted that the government had paid the huge amount to the IPPs without getting approval from the Auditor General of Pakistan (AGP). Similarly, it had also paid Rs10 billion as the markup on the due amount.

A sub-committee of the Senate Standing Committee on Finance under the chair of Senator Mohsin Aziz discussed the payment of Rs480 billion made to the IPPs in 2013 when the incumbent government took charge. The Senate Standing Committee on Finance had constituted its sub-committee to thoroughly investigate the issue of paying the huge amount to IPPs in haste.

The committee members at Thursday’s meeting noted that the government had violated the rules and regulations for making payment to the IPPs. Committee member Senator Kamil Ali Agha questioned why the government paid interest rate suddenly, which had not been paid for last several years. “The IPPs have not improved their efficiency and the government is allowing new IPPs to generate electricity in the country,” he said.

Another committee member Saud Majeed said that they had reservations about the way the debt has been cleared. He noted that the government had made an additional payment of Rs32 billion to the IPPs but it did not purchase electricity from them. Senator Mohsin Aziz sarcastically said that the government had rewarded the IPPs for observing massive load-shedding in the country. He appreciated the role of the AGP in this case. Officials of the Federal Board of Revenue (FBR) informed the committee that AGP report had identified Rs20 billion general sales tax (GST) to be paid by the IPPs. The sub-committee members said that FBR officials should brief them on the sales tax issue in the next meeting.

Meanwhile, the Senate Standing Committee on Finance and Revenue’s meeting held under the chair of Senator Saleem Mandviwalla. The committee has directed the FBR chairman to ensure his presence during the committee meetings. The committee further considered “The Public Private Partnership Authority Bill, 2016,” passed by the National Assembly. The bill provides a regulatory and enabling environment for private participation in the provision of public infrastructure and related services through fair and transparent procurement.

The committee proposed some amendments to the bill and decided to defer it for the future meeting with the direction to the Ministry of Finance to give a response on amendments proposed by the committee. The committee, after receiving the response, would finalise its report at the next meeting.

While considering the “The Corporate Rehabilitation Bill, 2017”, the committee showed its concern over introducing a bill by the government on a subject as the same kind of private member bill moved by Chairman of the Committee Mandviwalla and has already been passed by Senate and transmitted to the National Assembly. However, the committee decided to propose some appropriate amendments to the government bill and deferred it for further consideration till next meeting. The committee was of the view that the bill was highly important and needs detailed consideration to formulate solid recommendations.

The committee also discussed private members’ “Partnership (Amendment) Bill, 2016” moved by Senator Muhammad Azam Khan Swati and decided to defer further consideration for seeking an appropriate response from the Ministry of Finance and relevant authorities.

The meeting was attended by Senators Ilyas Ahmad Biliour, Muhammad Mohsin Khan Leghari, Ayesha Raza Farooq, Saud Majeed and Mohsin Aziz besides senior officers of the Ministry of Finance and FBR.