Energy sector circular debt: government submits payment schedule in Supreme Court

The Ministry of Water and Power has submitted a payment schedule in the Supreme Court regarding resolution of circular debt in energy sector. The court was also informed that independent power producers (IPPs) had also agreed to ministry's payment schedule. A three-member bench led by Chief Justice Iftikhar Muhammad Chaudhry heard the petition moved by eight IPPs.
According to IPPs, the government has not paid them Rs 61.4 billion during the last couple of months, which has worsened power crisis in the country. The bench has hinted at announcing its decision on August 15 regarding the matter pertaining to the clearance of IPPs fund after analysing responses submitted by the ministry of water and power and other private companies.
In pursuance of the court orders, the counsel for ministry of water and power Khawaja Tariq Rahim submitted schedule regarding the clearance of circular debt of IPPs. The counsel informed the bench that on the direction of the court the government had decided to pay Rs 45 billion to the power producers. He further said Rs 8 billion had been paid in July, while Rs 8 billion would be paid by 30th August and another Rs 8 billion on 30th September. The schedule for payment of rest of the amount, Rs 21 billion, was being prepared, he added. The chief justice remarked that the government would have to give concrete recommendations pertaining to payments to IPPs. The hearing of case adjourned till August 15.
APP adds: An amount of Rs 45 billion had been agreed as undisputed overdue amount of these IPPs before the Supreme Court which had directed the concerned authorities and the National Transmission and Dispatch Company (NTDC) to reconcile overdue amount with IPPs and inform it about the payment schedule. The IPPs and NTDC had held several meeting during the last two weeks and reconciled the amount from total default out of which some payments during this time were made by the NTDC.
The NTDC and IPPs had finalised an amount of Rs 45 billion to be undisputed overdue outstanding out of which the government had offered to pay these IPPs Rs 8 billion every month for the next three months while the formula for the rest of the overdue amount would be mutually worked out between the government, the NTDC and the IPPs.