Power sector circular debt stands at Rs 328 billion: government tells Senate

The government informed the Senate on Thursday that power sector circular debt stands at Rs 328 billion at present and there is no truth in reports that it has soared up to Rs 650 billion. Senator Syed Shibli Faraz of Pakistan Tehreek-e-Insaf (PTI) through a calling attention notice in the Senate, drew the attention of the government towards a story published by Business Recorder that the power sector circular debt has soared up to Rs 650 billion due to incompetence of the government.
He said that the federal government, especially the Planning Commission, has miserably failed to put some policy guidelines in place to deal with the burgeoning issue of circular debt, adding the ministry is clueless how to control the rising circular debt.
"If the newspaper [Business Recorder] report is believed to be true, the circular debt of power sector has reached over Rs 650 billion and another circular debt on imported Liquefied Natural Gas (LNG) has started piling up and now it stands at over Rs 12 billion...this is quite shocking and we all should find a solution to the problem," he added.
He said that despite coming to power on an energy-driven manifesto with a promise to fix power crisis, the PML-N government has been unable to rein in transmission and distribution losses. However, Federal Minister for Parliamentary Affairs Sheikh Aftab while responding on behalf of the Minister for Water and Power stated that the government is making all-out efforts to control circular debt issue.
"The circular debt is not Rs 650 billion as it is Rs 328 billion...there were problems in recovery of electricity bills but the issue has also been improved to a great extent, and ratio of recovery has soared to 99 per cent that was 96 per cent last year," he added.
He said that power sector owes Rs 8 billion to Pakistan State Oil (PSO). He explained that National Electric Power Regulatory Authority determines the tariff of all distribution companies on the basis of cost of each company's supply. "Transmission and distribution (T&D) losses are [an] integral part of [the] power system. Such losses vary among DISCOs due to geographical situation as well as customer mix of each company. The T&D losses beyond NEPRA target emerge due to inefficiency, theft and law and order situation and also vary among DISCOs," he added.
The Chairman Senate reserved his ruling on a debate whether the President of Pakistan should address the joint sitting of Parliament on the beginning of the parliamentary year or calendar year. Minister for Law and Justice, Zahid Hamid said that existing practice of presidential address to the joint sitting of the Parliament on start of parliamentary year should continue.