Electricity Will Not Sustain Due To Rs977 Billion Circular Debt

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Electricity Will Not Sustain Due To Rs977 Billion Circular Debt

Electricity Will Not Sustain Due To Rs977 Billion Circular Debt: For the first time the circular debt in the power sector alone has rose to an  overwhelming figure of Rs977 billion which is Rs. 23 billion short of Rs1 trillion in the history of Pakistan. The joint secretary of power has also confirmed the figure of the circular debt of Rs977 billion saying that the government is all set to borrow more loans of Rs80 billion from commercial banks to lay off some arrears of IPPs and some of the Pakistan State Oil.

The loss in the head of recovery of billed amount of electricity has also increased by 11%, and if the recovery situation remains the same, the circular debt will cross the figure of Rs1,000 billion (Rs1 trillion).

Electricity Will Not Sustain Due To Rs977 Billion Circular Debt
Electricity Will Not Sustain Due To Rs977 Billion Circular Debt

As per sources the Power Sector is needed to pay Rs343.2 billion to the Independent Power Producers (IPPs). The arrears of IPPs currently are Rs343.2 billion compared to Rs74.9 billion in 2013.

Central Power Purchase Agency (CPPA) is yet to get the amount of Rs91.9 billion from AJK government, Rs24.6 billion from Fata, Rs214.3 billion from Agriculture tube-wells of Balochistan, and Rs65.3 billion from Karachi Electric (KE). Electric power distribution companies pay Rs2.5 billion to CPPA every day but in December loss of sufficient payment government took loan to run the power sector.

Despite the substantial improvement in electricity supply side the liquidity issue in the Power Sector has emerged as threat to the sustainable Power Sector due to the highest circular debt.

Mr. Sardar Awais Laghari, Minister for Power recently stated and acknowledged the fact that the country will have to bear Power Sector loss of Rs360 billion this year mainly because of insignificant reduction in system losses from 19 percent in 2013 to 17.8 percent in 2018.

The NEPRA official told that the addition of power generation is not good enough to end the load-shedding even this year. If the government will be able to get the payables back that stand at Rs542.9 bn and the loans borrowed by the power sector parked in PHPL (Power Holding Private Limited) at Rs434 billion, situation might get better.

#Electricpower, #circulardebts #recoveryofbills #loadsheddingin2018 #governmentrecoverymechanism

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