Power sector circular debt: MoITT demands Finance Division return Rs61.2bn borrowed from USF in 2013

ISLAMABAD: The Ministry of Information Technology and Telecommunication (MoITT) has demanded the Finance Division to return Rs 61.2 billion — borrowed from the Universal Service Fund (USF) in 2013 for clearing power sector circular debt, as it is facing financial constraints to launch new projects.

This was confirmed by the Federal Minister for Information Technology and Telecommunication, Syed Aminul Haque, while talking to a select group of journalists, here on Thursday.

“We have launched 25 projects worth Rs 35 billion under the USF to expand the footprints of telecom services in the under-served and un-served areas of the country,” said Haque, adding that to expedite its connectivity and broadband-related projects in these areas, they need money.

The minister further said that they wrote the fourth letter to Finance Division for paying back Rs 61.2 billion borrowed by Finance Minister Ishaq Dar in 2013 from the Federal Consolidated Fund for clearing circular debt of the power sector.

“We have also given them the option to pay in installments at Rs 6 billion per annum,” said the minister, adding that in case of non-payment by the Finance Division, USF would have no funds to launch new projects next year.

The Finance Division had borrowed Rs 67 billion in 2013 for clearing circular debt which included a contribution of Ignite and USF, however, Rs 5.8 billion was retuned in 2016.

Replying to a question, the minister stressed that government would try its best to launch 5G at least in major cities of the country by June 2023 as other countries are moving 5.5G and 6G, and in case of failure to achieve the country would be bypassed in achieving this milestone of the latest technology.

He further elaborated that the total focus of the government would be to ensure providing a business-friendly environment to the telecom operators before the launch of 5G. The government would appoint a new chairman of Pakistan Telecommunica-tion Authority (PTA) on merit and expect of him to provide a business-friendly environment to make 5G launch a success.

“If we can’t make the spectrum free, the price should be reduced,” he added.

The minister also revealed that a proposal is under consideration to give maximum fiscal space to telecom operators including suspending USF and Ignite contribution or minimising it by one percent provided that the federal government announce incentives for this sector.

He said that the government is also considering some incentives for the telecom sector.

The minister said that they have requested an additional Rs 790 million grant for the Pakistan Software Export Board (PSEB), a five percent cash award for the IT sector, and a special award of one percent of total IT exports for the PSEB.

The federal minister termed 2022 a success for IT and Telecom when most of the other sectors were not performing well.

He said that IT exports remittances stood at $ 2.39 billion in the first 11 months (January-November) of the outgoing calendar year compared to $ 2.19 billion during the previous calendar year i.e. 2021.

Another achievement, the minister said Pakistan for the first time in the country started exports of mobile handsets, besides, known brands including Samsung and Nokia started mobile handsets manufacturing in the country.

He said investment in the telecom sector increased by 6.6 percent while reaching Rs 694 billion.

The minister said they are expecting that 2023 would be full of success for the IT and Telecom sector envisaging growth in exports, 5G auction and speedy completion of connectivity-related projects.

The minister admitted the degraded and poor quality of services of telecom operators in the country, while saying if the government (the PTA) will take any action they (operators) reach courts.

Replying to another question, Haque said that Data Protection Bill is expected to be approved in the next few weeks.

The minister said the federal government had resolved the issue of pending payments to Google. He also stated that work is currently being done to develop an acceptable mechanism for facilitating such payments in the near future.

Copyright Business Recorder, 2022