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Irregularities in Capacity Payments Discrepancies in Meter Reading System for Energy Payments Rs 16.336 billion Energy Payment invoices were not supported by proper reports of Meter Reading Committee. NTDC made the capacity payment for idle capacity without purchasing electricity, despite having declared available capacity by the IPPs.
Irregularities in Capacity Payments Discrepancies in Meter Reading System for Energy Payments Rs 16.336 billion Energy Payment invoices were not supported by proper reports of Meter Reading Committee. NTDC made the capacity payment for idle capacity without purchasing electricity, despite having declared available capacity by the IPPs.
Irregularities in Capacity Payments Discrepancies in Meter Reading System for Energy Payments Rs 16.336 billion Energy Payment invoices were not supported by proper reports of Meter Reading Committee. NTDC made the capacity payment for idle capacity without purchasing electricity, despite having declared available capacity by the IPPs.
Details of Objections in Payment of Circular Debt of Rs 480 Billion
Finding regarding setting-aside amount of liquidated damages
Non-adjustment of liquidated damages of Rs 22.916 billion against
payment of circular debt. (As per section 9.5 of the PPA, amount of Liquidated Damages (LDs) was payable by IPPs which were set aside upon settlement of Circular Debt in violation of procedure in vogue. Whereas the same amount was required to be recovered / adjusted instead of setting aside)
Finding regarding payments of IPPs
a) Issues regarding Irregular/Excess/Avoidable Payments Irregularities in Capacity Payments. Unjustified capacity payment for idle Capacity Rs 32.451 billion NTDC made the capacity payment for idle capacity without purchasing electricity, despite having declared available capacity by the IPPs. Unjustified capacity payment for forced outages because of fuel shortages Rs 2.711 billion. Non supply of energy upon forced outages was attributed to fuel shortages, whereas according to the section 5.14 (a)&(b) of the contract agreement , provision of fuel was the responsibility of IPPs. Hence, capacity payment upon forced outages due to fuel shortages was unjustified. (Para3.3.2) Irregular capacity payment on account of non-provision of data of Metering Committee Rs 4,630.082 million. Irregularities in Energy Payments Discrepancies in Meter Reading System for Energy Payments Rs 16.336 billion Energy payment invoices were not supported by proper reports of Meter Reading Committee upon which NEO was determined. (Para- 3.4.1) Undue favor on account of extra Energy Payment due to implausible determination of Net Electrical Output (NEO) Rs 37.122 million The NEO was determined upon reading of the Main Metering System which gave more units than that of Backup Metering System that entailed extra Energy Payment. (Para- 3.4.2) Imprudent Financial Management
Irregular payment on account of reimbursement of withholding tax
on Dividend Rs 264.655 million. Re-imbursement of withholding tax on dividend was irregular because it was personal income of shareholders rather than Pass Through item. (Para-3.5.2) Recoverable amount of Rs 10.911 million due to application of wrong exchange rate Extra payment made due to non-adherence to ECCs decision regarding indexation of tariff Rs 84.590 million Contrary to the ECCs decision, the management applied indexation of tariff on the basis of closing rate instead of minimum of selling rate of eight (8) specified banks. Extra payment made due to application of higher Inflation and Exchange Rate Factor Rs 3.342 million. Un- authorized/excess payment on account of 15% surcharge Rs 4.969 million. Excess payment on account of 15% surcharge was made to Attock Gen Ltd for the whole years tax liability instead of three and half(3) months in violation of amendment made on 15.03.2011 in the Income Tax Ordinance, 2001. Loss due to production of electricity on Residual Fuel Oil (RFO) instead of Gas Rs 6.253 Billion Irregularities of Supplemental Charges /Pass through Items Unauthorized/bogus payment on account of Workers Profit Participation Fund(WPPF) Amounting to Rs 10.359 million. Payments were made to employees and unauthorized persons as against provisions of the Power Purchase Agreement (PPA). Unjustified payment on account of Workers Profit Participation Fund 9WPPF) Rs 6.476 Million. The amount deposited by the IPP (Fauji Kabirwala Power Company Limited) on account of WPPF in the Government treasury was less than the amount claimed for reimbursement. Unjustified payment on account of General Sales Tax (GST) Rs 17.733 billion The amount of GST, being a pass-through Item, was reimbursed to the IPPs to the different IPPs without having evidence including paid challan of GST against the provision of PPA. Unjustified payment on account of Open Cycle Cost (OCC) charges Rs 263.963 million The said payment was not covered under the Power Purchase Agreement (PPA). Implausible/Defective Clauses of Agreements
Un-necessary provision of Supplemental Charges in the contract
entailing payment of Rs 5.538 billion. The invoices of Capacity Purchase Price (CPP), Energy Purchase Price (EPP) & Late Payment Charges (Interest) cover all the expenses/compensation of the IPPs/ hence, in addition to it, unnecessary inclusion of clauses of Supplemental Charges in the PPA is a sort of undue favor to the IPPs. Finding regarding payments to GENCOs/Oil & Gas Suppliers a) Irregularities in Payments Overpayment to NPGCL amounting to Rs 2.424 billion Over payment due to direct payment of fuel purchase instead of payment of Fuel Cost Component (FCC). Excess payment made to PSO on the purchase of furnace oil at higher rate against short supply- Rs 5.266 million An amount of Rs 5.266 million was excess paid for purchase of costlier RFO due to short supply of cheaper RFO by PSO. b)Other irregularities/lapses Non-existence/Non-renewal of Gas Purchase and Sale Agreements with the Gas Supply Companies Rs 28.849 billion. Gas sale and purchase agreements were not signed with SNGPL. Further Agreement with Mari Gas Company was not renewed since 2010 Rs 18.641 billion. Loss due to violation of Public Procurement Rules- Rs 1.319 billion. The transportation cost of RFO from Zulfiqar Oil Terminal (ZOT) Karachi was higher than that of PARCO working in the vicinity of Muzaffargarh. Had the fuel been purchased from PARCO, loss of Rs. 1.319 billion would have been avoided. Finding regarding a Non-cash Settlement a) Excess/unjustified adjustments/ settlements Unjustified settlement of circular debt Rs 25.104 billion Relevant invoices regarding adjustment of Rs 25.104 billion by Finance Division were not provided.
b) Excess payment to SHYDO due to non-provision of standardized
clause of energy Payment in PPA Rs 403.116 million. Payment was made on the basis of average monthly generation instead of Net Electrical Output (NEO) dispatched due to non-provision of standardized clause of energy payment in the Agreement. (Para-3.13.2) Unjustified excess adjustment of debt service liability in non-cash settlement against WAPDA (Hydroelectric) Rs 15.196 billion.
According to the reconciliation statement of debt service liability, the
total payable amount by Government of Pakistan on 31st May, 2013 was Rs 74.887 billion instead of Rs 90.083 billion. Hence, excess amount of Rs 15.196 billion was adjusted by th Finance Division.
Unjustified payment on account of General Sale Tax Rs 761.705
million. General SALES Tax (GST), despite being Pass through Item, was paid without documentary evidence which was pre-requisite under the provision of PPA. Unjustified payment on account of levy for IRSA Rs 20.174 million There was no provision of payment of levy for IRSA in the PPA relating to Chashma Nuclear Power Plant. Unjustified excess adjustment of debt service liability of Rs 6.572 billion in Non-cash settlement against GENCOs. b) Other Irregularities/lapses Non-testing of Metering System resulted in un-authentic meter reading and billing of Rs 100.964 billion. A portion of this billing can therefore be inaccurate and may have resulted in a loss to the national exchequer.