Cut in TV licence fee collection charges: power ministry refuses to support PTV -Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

Cut in TV licence fee collection charges: power ministry refuses to support PTV


ISLAMABAD: The Ministry of Water and Power, has, reportedly refused to support Pakistan Television (PTV) for reduction in licence fee collection charges from Rs 5 per to Rs 1.50 per bill, official sources told Business Recorder. In July 2004, Pakistan Television Corporation (PTVC) entered an agreement with Water and Power Development Authority (Wapda) for collection of TV licence fee through electricity bills.

As per clause 7 of the agreement an amount of Rs 5 per bill is being charged by Wapda. Although, PTVC management contested this at the time of this agreement, later, it came to the fore that the charges are too exorbitant as compared to utility suppliers who are paying only 1 percent of their billing amount as collection charges to banks. Moreover, Pepco the successor of Wapda is not charging any amount on collection of General Sales Tax (GST) through electricity bills.

Sources said the matter was brought to the notice of the prime minister during a briefing given by the minister for information and broadcasting on January 15, 2009. Subsequently, the prime minister was requested, through a summary for the prime minister and routed through ministry of finance and ministry of water and power, to direct Pepco/Wapda to charge a reduced TV licence collection fees at the rate of Rs 1.50 per bill. The PM secretariat desired the matter be placed before the ECC of the Cabinet.

The ministry of finance, in its comments stated that the matter has been examined in consultation with the ministry of water and power, adding that since the collection charges for TV licence fee in 2004 were settled through an agreement negotiated between two corporate entities viz Wapda and PTVC, it seems more appropriate that the PTVC may re-negotiate with Discos, legal successors of Wapda, if it so wishes. For guidance, one criterion could be to compare collection charges (Rs 5 per consumer) as percentage of TV licence fee in 2004 with the revised fee of 2010 rather than as a percentage of income.

The ministry of water and power maintained that PTV licence fee is being collected in pursuance of contract executed between Wapda and PTVC on July 1, 2004. Discos adopted the terms of contract of recovery PTV fee as successor companies of Wapda. Now for any change in the PTV collection fee, the companies may reconsider the bilateral contract executed by Wapda and PTV after approval from their Board of Directors.

The ministry, in its comments further said that PTV has broadened the annual licence fee from 300 to 420 and 600 to 720 for domestic and commercial consumers respectively. Practically the collection fee should also be indexed when PTV has enhanced the fee rates. The increase in the annual fee of PTV is giving the impression that electricity rates have been increased.

According to sources the ministry of water and power Discos are paying Rs 8 per electricity bill to the banks as collection charges. Discos are utilising min-hours, stationery, settlement of dispute besides keeping accounts of all the transactions relating to collection of PTV licence fee. Collection of other levies apart from electricity bills adversely affect the collection and cause increase in Discos receivables.

“The proposal of the ministry of information and broadcasting is not supported because collection charges are in consequence of a bilateral agreement and no other agency can interfere in deviation of terms and conditions of contract. If PTV Corporation is not comfortable with service charges being paid to Discos, it has complete autonomy to have their own collection system or to outsource it to any other agency,” sources quoted the water and power ministry as saying in its comments. Sources said the issue is being placed before the ECC of the Cabinet, which is scheduled to meet on Thursday (April 7) which will take the final decision.
Source: Business Recorder