Power entities asked to declare arrear bills beyond three years as bad debt

FE Team | Published: July 12, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FE Report
The government has asked the state-owned power sector entities, including the Bangladesh Power Development Board (BPDB), to write off electricity bills that are outstanding for more than three years to streamline the current corporatisation process.
However, the respective company boards of BPDB, Dhaka Electricity Supply Authority (DESA), Dhaka Electricity Supply Company (DESCO) and Rural Electrification Board (REB) are allowed to take independent decisions on the matter, a competent source said.
Officials at the power division said the electricity generation and distribution units are showing the outstanding electricity bills as old as 25 years as their incomes in an attempt to justify their "financial viability."
"The power sector entities continue to show the long outstanding power bills as incomes to raise their assets base. But we've made it clear that the backlog of electricity bills older than three years should be erased from their accounts and declare them as bad debts," a senior division official said.
"They shouldn't indulge in creative accounting. It's ludicrous that the organisations are showing the outstanding bills that will never be realised," the official added.
The existing electricity tariff rule says any electricity bill, which is not claimed by authorities within three years, will be deemed as bad debts. Power sector experts say the international best practice in this regard is five years.
The sources said the BPDB is making its financial statements showing assets and liabilities as the government has planned to turn it into a holding company.
Separately, other power utilities, which are at the fag end of corporatisation, are also following suits, not to show the long-time dues as bad debts.
The sources said the caretaker authority might shortly announce the arrears of the power sector entities that are unclaimed within three years as bad debts in order to avoid harassment of consumers by the officials.
"The long overdue electricity bills often give the officials scope to harass the consumers," they added.
The matter was discussed at a recent cabinet meeting.
The BNP-led alliance government had introduced a mandatory provision for all concerned to issue bill clearance certificate at the year-end, a system rarely practiced by the utilities.
As of the fiscal 2005-06, according to official figures, the cumulative outstanding bills of BPDB stood at Tk 45 billion.
The electricity arrears of DESA and REB were Tk 78 billion and Tk 46.4 billion respectively upto December of the fiscal 2006-07.