Circular debt rises to Rs 566bn, Senate told

ISLAMABAD: As the new government is gearing up to take the reins of power, the caretaker government found it indispensable to inform that circular debt of the country has risen to Rs 560 billion.

The revelation of the rising circular debt came to light during the Senate committee meeting. It was informed that technical and distribution losses, less recovery, nonpayment of subsidies and K-Electric payment were few reasons for accumulation of the circular debt. The meeting of Senate Special Committee on Circular Debt was held with Senator Shibli Faraz in the chair.

Power Division Additional Secretary Waseem Mukhtar briefed the committee about the overall situation of energy sector in Pakistan as well as remedial measures to reduce the circular debt.

He asserted that for any progress to be made it was imperative that policies be reframed especially with regards to the DISCOs. He informed that boards must comprise professionals with no associated interests. He said that every electricity supply company has its own planning wing and that it should come up with new ideas and solutions to ease the situation.

Shibli Faraz said that the number of running defaulters has been gradually increasing and outstanding amount against them stood at Rs.397 billion. He categorically said that Ishaq Dar did not pay Rs.480 billion circular debt rather it was parked and it has now jumped to over Rs 1,000 billion.

He said short-, mid- and long-term strategies will have to be adopted to tackle the issue. He also instructed the Power Division to provide the committee with province-wise details of industrial, domestic and commercial defaulters.

NTDC Managing Director Zafar Abbas said making any progress in terms of energy transmission has become impossible as it entails huge costs. However, in view of growing demand a plan has been put in place to upgrade the transmission lines, he added.

Power Division Joint Secretary Zaigham Ishaq Khan said as per decision of the Cabinet Division, load shedding rota was rescheduled in November. It was revealed that the government instructed that electricity must be supplied to all areas without suspension regardless of their recovery status which caused an increase in line losses as well as the circular debt.

While discussing circular debt at the DISCOs level, it was observed that Bannu, DI Khan, Charsadda and the Khyber Circle were the most notorious in terms of electricity theft. The percentage of recovery in these areas was less than 30 percent. Malakand Division was the top bill paying area. According to PESCO officials, the company suffered a total loss of Rs 38 billion. According to HESCO officials, total annual line losses of the company stood at Rs 27 billion.