'Total energy sector circular debt crosses Rs 1,673 billion mark'

The total energy sector circular debt has crossed Rs 1,673 billion mark, of which Rs 869 billion are pending against various defaulters and Rs 804 billion are pending against Power Holding Company Limited (PHCL). This was stated by the Secretary Power Division Irfan Ali while briefing a subcommittee of the Public Accounts Committee (PAC), which met here under the chairmanship of Senator Shibli Faraz.

The secretary power division said that resolution of the problems related to power sector are linked with support of the political parties, adding that depoliticizing of the power sector is a must to effectively deal with all the persisting problems.

The secretary while giving the details of the circular debt said that increase in circular debt is due to power theft, line losses, dated power transmission lines and non-recovery of power bills both within the public sector entities and private consumers.

The secretary said that to deal with the circular debt issue the government has almost finalized the issuance of Rs 200 billion worth of Islamic Sukuk bonds.

He further said that as a result of improvement in recovery mechanism, the government during the ongoing year has made Rs 229 billion additional recoveries from various consumers of which Rs 118 billion additional revenue has been generated by increasing power tariff and Rs 111 billion by capacity building of the power distribution companies.

He further said that as per a plan submitted with International Monetary Fund (IMF), after 2020 all the power distribution companies will recover outstanding dues against their clients to eliminate the menace of circular debt.

Responding to a question regarding shifting of agricultural tube wells in Balochistan on solar system, he said that for the purpose the government has invited a Saudi company to install three solar-based power plants each with 50 megawatts (MW) capacity in three selected districts of the province. He said that once the solar power plants are installed, the government will linked them with national grid to supply power to all the tube wells in Balochistan. However, he said that solar-based electricity is expensive which will not address the problems of the farmers of Balochistan as per their aspirations.

Managing Director CPPA Abid Latif briefing the panel said that power consumption from 2012 to date has increased from 71 billion units to 91 billion units, adding that the CPPA wants an end to freight power rate. He said that there is a need to supply power to under-construction and completed industrial zones across the country, so that the objective of industrial growth can be achieved.

He further said that after July 2021, the CPPA will acquire trading license from National Electricity Power Regulatory Authority (NEPRA) because after that period power generation companies will not be allowed to start any mutual project with CPPA and power distribution companies will complete all power related projects other than strategic planning. He said that beyond 2021, the CPPA will provide guarantee to power distribution companies and not to generation companies.

Managing Director National Transmission and Dispatching Company (NTDC) Zafar Abbas while briefing on the long-term planning of the company said that NTDC remained ignored and deprived of government funding in past but now the company has attracted local and global investment as the financial statement of the company has been improved. He said that following the improvement in financial statement, now borrowing loans from local and global banks is not a problem for the company as a result now the NTDC has started working to implement various long-term plans.

Responding to a question regarding power transmission license to the government of Sindh, the managing director said that the NTDC is considering to review the project.