KARACHI: Pasban Democratic Party (PDP) Chairman Altaf Shakoor has suggested that the government should issue special circular debt bonds to generate funds locally well as internationally in order to end the evil cycle of circular debt.
In a statement, he said new agreements should be inked for import of oil and gas on cheaper rates. And work on pending gas supply pipeline projects should be restarted with an accelerated pace.
He said the issue of circular debt poses a real threat to the nation and all the political parties should shun their differences over the matter as the dreadful debt has already turned into a national emergency.
He said the new government of Shehbaz Sharif should present a national policy framework to deal with circular debt before it gets too late. He said all the resources should be utilised in this regard besides ensuring robust financial diplomacy in all friendly countries to secure not only oil and gas on cheaper rates but also to get soft loans to pay off the circular debt.
He said that sadly Pakistan’s power sector has become bankrupt and the real culprit behind this disaster is the government’s own ‘sheet mismanagement’.
Altaf Shakoor said the failure to introduce much-needed reforms in the power sector only means that the country is using scarce resources to prop up a sector and losing out on the opportunity to invest in human development in the process.
The state of affairs is such that Pakistan, a country that even lags behind countries like Rwanda in terms of youth education metrics, is spending more on providing power subsidies than on education.
The PDP chairman said that at present energy companies are facing financial constraints and are struggling to get their outstanding dues cleared. The oil and gas sectors are reeling from Rs 1.6 trillion worth of circular debt whereas the power sector has a circular debt close to Rs 2.5 trillion.
He said the government lacks funds to clear the growing circular debt. It is not sufficient for the authorities to stop theft of electricity as recovering the dues is important too.
He pointed out that the government is willingly paying billions of rupees as subsidy to private power companies but is not willing to spend a few billion rupees to subsidise solar panels that can greatly help reduce demand for electricity from the grid.
He said Pakistan is blessed with sunny conditions that can generate ample electricity from the renewable solar source. If the government pays serious attention to this sector and gives low-income families incentives to buy and install solar panels the problem of load-shedding can be solved to a great extent. He added that industrial units for manufacturing solar panels and other renewal energy devices and gadgets should be set up immediately in the country.
Copyright Business Recorder, 2022
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