Energy sector’s circular debt soars to Rs2.28trn

Islamabad: The country’s energy sector circular debt has increased by over 2000 per cent to Rs 2.280 trillion in FY 2020-21 from Rs 105 billion in 2008 due to variety of factors including Transmission and Distribution (T&D) losses.

This information was shared by the Power Division with the Senate Standing Committee on Power, chaired by Senator Saifullah Abro, soon after a chaotic situation in the committee was witnessed at the absence of Minister for Energy, Hammad Azhar and Secretary Power, Ali Raza Bhutta.

Power Division stated that circular debt was Rs 105 billion in 2008 which increased to Rs 149 billion in 2009, Rs 225 billion in 2010, Rs 221 billion in 2011, Rs 603 billion in 2012, Rs 447 billion in, Rs 531 billion in 2014, Rs 649 billion in 2015, Rs 589 billion in 2016, Rs 702 billion, Rs 1.152 trillion in 2018, Rs 1.612 trillion in 2019, Rs 2.150 trillion in 2020 and Rs 2.280 trillion 2021.

The Committee was apprised that Pakistan Electric Power Company (Pepco) is being wound up and its functions with respect to human resourcesm for example transfer/ posting and promotions have been transferred to the respective Discos. However, Pepco’s technical experts will now be attached to the Power Division and they will assume their duties in Islamabad from Monday next. The name of Pepco is being changed along with its Memorandum of Articles (MoAs) for which a letter has already been written to the SECP.

Energy sector circular debt shows contained growth in FY21

The issue of appointment of GM HR Pepco, Saghir also came under discussion. Chairman Standing Committee accused him of being the most corrupt officer, adding that stories of his corruption are on the tongues of officials of Discos.

However, the Managing Director Pepco/ Additional Secretary Power Division, Musaddiq Ahmed Khan said that he has gone through his files, but did not find anything to corroborate it.

Later, the Committee members including Haji Hidayatullah Khan and Prince Ahmed Umar Ahmedzai began a hue and cry at the absence of Minister and Secretary from the meeting after Leader of the House in the Senate, Senator Fida Muhammad gave a chit in Urdu to the Committee Members stating that “Chairman Committee says be hard on the absence of Minister and Secretary”. This prompted the suspension of the proceedings of the Committee for nearly 45 minutes with the members holding an in camera meeting in a separate place. After this private meeting, the committee members returned to the committee room and announced that the Committee will write a letter to Chairman Senate against the attitude of Power Division including Minister for Energy and Secretary Power for their “non -cooperation” with the Committee.

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During discussion on receivables and payables of Karachi Electric (KE), both Chairman Standing Committee Saifullah Abro and Chief Executive Officer (CEO) KE exchanged hot words when the latter tried to intervene during the briefing of Additional Secretary, Waseem Mukhtar.

When the Additional Secretary stated that KE’s stock of receivables towards the government are Rs130 billion against payables of Rs299 billion, CE KE intervened and stated that the power utility’s receivables are Rs300 billion including Rs28 billion against Karachi Water & Sewerage Board (KW&SB). At this intervention Chairman Standing Committee expressed his anger.

CEO KE said that he should be given the right to respond to Additional Secretary on figures of receivables and payables, which led Chairman Committee to warn the CEO KE that he would oust him from the meeting. CEO KE responded that he is ready to leave the committee himself, further irking the Chairman Committee who threatened that his staff would oust him from the meeting.

Later, CFO, CPPA-G Rehan Akhtar informed the Committee that KE’s receivables on account of Tariff Differential Subsidy (TDS) are Rs130 billion in addition to other accounts.

Copyright Business Recorder, 2021