Karachi Electric Supply Company not paying TV license fee to PTV
By: GHULAM ABBAS
Karachi Electric Supply Company (KESC), which collects over Rs 70 million as TV license fee every month, is not paying the same to Pakistan Television Corporation (PTVC). The company, according to sources, is defaulting on accumulated amount of over Rs 600 million as on December 2012.
KESC charges an average Rs 35 per consumer monthly out of which the company and banks get Rs 10 and Rs 8 as service charges, respectively while the rest of Rs 17 are to be paid to PTVC. Through a letter sent to Federal Secretary Finance on November 14, 2012, Federal Secretary Information & Broadcasting has claimed that the KESC is not paying TV license fee to PTVC since April 2011. KESC management is not releasing the amount of fee collected on behalf of PTVC.
The letter, a copy of which is available with Business Recorder, further said that by virtue of this delay the outstanding position of the fee from KESC has reached up to Rs 295 million as on September 2012. However, according to sources the dues have been swelled to around Rs 600 million as on December 2012.
It said that the PTVC had plunged into financial crisis, which could worsen if KESC failed to release the TV licence fee outstanding for months. The federal finance secretary was requested to slash the aforementioned amount from the subsidy being provided to KESC and pay back to PTVC to meet its financial losses. “PTV needs funds for its different international and local commitments especially for procurement of content for PTV-sports and for the launch of PTV-English Channel,” it said.
According to an email draft which was sent to Chief Executive Officer of KESC in November 2012, KESC and PTVC, in 2004 had signed an accord, according to which KESC had to collect TV licence fees from its registered consumers. Following the pact the power utility started charging TV licence fees along with the utility bills. KESC on behalf of PTVC is charging Rs 35 per residential consumer and Rs 60 per commercial costumer, which ultimately converts fees into millions of rupees every month.
In this regard, Managing Director PTVC met KESC Managing Director on October 10, 2011, where it was decided that KESC would clear arrears through monthly instalment of Rs 10 million. However, KESC failed to fulfil its commitment and on May 4, 2012, another meeting was held between PTVC Director Finance and PTV Chief Financial Official, wherein it was decided that KESC would pay Rs 15 million every month in order to clear arrears but KESC management failed again to fulfil its commitment, which ultimately convert arrears into millions.
However, talking to Business Recorder, Aminur Rehman, official spokesman of KESC claimed that KESC has been paying the monthly TVL Fee collections to PTV, about Rs 35 million/ month. Despite its 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.
Reference to the claim of outstanding payments to PTV, KESC clarified that it had already written a letter to PTV, authorising the state owned channel to recover Rs 241.1 million from the Ministry of Finance. It is important to note that 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.
According to him, KESC, on the other hand, has to pay upfront or within the agreed payment cycle, for its fuel purchases from the state owned entities. Such massive receivables which are stuck in the circular debt, adds only to the financial pressure in terms of creating a strangle hold on cash flows, despite which, as mentioned earlier KESC has made payments of Rs 1.7 billion to PTV over the recent years.