ISLAMABAD: The government’s economic team is said to have been worried over a lesser amount of recoveries of billed amount due to the Covid-19 as the power sector was unable to collect Rs46 billion from March onwards which contributed to the increase in the circular debt.

Sources said that the last fiscal year was closed with less recoveries of Rs136 billion of the billed amount, subsequent to slow down of various administrative actions, and Rs90 billion less recoveries of PD billed amount from July 2019 to Feb 2020.

Additionally, they added that in view of the Covid-19, the government gave relief to the domestic consumers with consumption up to 300 units to pay their monthly bills in three installments, and that impact from April-June 2020 was Rs50 billion.

There was also a change in consumer mix and industrial slow down, and therefore, capacity charge of Rs54 billion, which was part of the tariff, could not be recovered, they added.

They added that less receivables had to be reflected in the circular debt and when received were subtracted from the total of the circular debt.

They added that due to the poor performance of some DISCOs, a huge amount was being added in the circular debt, while the recovery percentage of some DISCOs against the billed amount was over 95 percent.

Sources further stated as far as less recoveries by the DISCOs due to the Covid-19 was concerned, the situation was beyond the control of DISCOs, however, they acknowledged that there was greater need to bring reforms in the power sector otherwise, it would not be possible to deal with circular debt.

Copyright Business Recorder, 2020