KESC asked to pay collected Rs295m TV licence fee

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ISLAMABAD - Finance Ministry has written a letter to Karachi Electric Supply Company (KESC) demanding payment of an outstanding sum of around Rs 295 million to cash starved Pakistan Television Corporation on account of TV licence fee.

The licence fee is collected for PTV through monthly electricity bills by electricity distribution companies throughout the country, and in the case of Karachi, KESC (a privatised entity) collects the TV licence fee from Karachities.  It can happen only in Pakistan where not only a private electric supply company like KESC which collected million of rupees from the consumers in the name of ‘License Fee’, is reluctant to transfer the collected money to PTV which is striving hard to run its business. TV licences fee payable to PTV from KESC had reached up to Rs295 million starting from January 2011 to September 2012. Viewing continuous raise in outstanding amounts due to company’s failure on timely payments, the Secretary Ministry of Finance Abdul Wajid Rana on November 14 in a letter had said that non-payment from KESC on time has caused serious cash flow problems for PTV. “Due to this, PTV is facing lot of problems to run its affairs smoothly. We are afraid if the situation continues, the pending/ outstanding will increase to the extent where recovery will be more difficult,” the letter reads.

Since the agreement made at Karachi on 2004 between PTVC (Pakistan Television Corporation) and KESC, the later has been authorised to collect TV licence fee from the consumers subject to terms and conditions. However, since April 2011, TV licence fee collected by KESC on behalf of PTV is not being paid to PTV in full. By virtue of this delay, the outstanding position of TV licence fee from KESC has reached up to Rs295 million.

It is also testimony of the facts that in spite of several meetings of PTV management with KESC is not releasing the amount of fee collected on behalf of PTV, and have apparently utilised PTV collection for their own use and are earning mark up as well without depositing outstanding arrears in PTV’s account on time. Sources said PTV is facing short of funds like situation and needs funds for its different international and local commitments especially for the procurement of content for PTV-Sports and for the launch of PTV-English Channel.

, which needs immediate financing for the procurement of capital equipment which has been ordered and would reach here in Pakistan in near future.

The Secretary Ministry of Finance has also urged management of KESC that ‘it will be a great help for PTV if recoverable amount of Rs295 million is deducted at source from the amount which Government of Pakistan (GoP) pays to KESC so that long outstanding amount from KESC may be adjusted/settled.’

When contacted with KESC spokesman to get the company ‘s stance on the matter, he said it (KESC) has been paying monthly TV licence fee to PTV about Rs 35 million per month. Despite its (KESC) cash flow constraints brought about by billions being stuck in circular debt receivables to be paid to it by the government, KESC has made payments of Rs 1.7 billion to the state-owned channel PTV since FY 2008.

Regarding the claim of outstanding payments to PTV, the spokesman said that KESC had already written a letter to PTV, authorising the state-owned channel to recover Rs 241.1 million from the Ministry of Finance from the GoP payables to KESC. He said the core issue behind all such receivables and payables remains to be the common factor - circular debt. Even as of now the federal and provincial governments owe KESC Rs 68 billion on account of unpaid electricity bills and tariff differential claim, amongst other things.


Courtesy:  Nation

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