Circular debt reaches Rs450 bn, PAC told

ISLAMABAD: The Ministry of Energy on Wednesday admitted before the Public Accounts Committee (PAC) that circular debt has reached at the level of Rs450 billion and the ministry was facing line losses of over Rs200 billion, while Rs214 billion worth of electricity was being stolen annually.

The meeting of the PAC was held on Wednesday under its Chairman Syed Khursheed Shah in which the audit paras regarding the Ministry of Energy related Power Division for the year 2016-17 were examined. The PAC recommended to the government to take up the issue of circular debt with the cabinet.

The PAC chairman said the Sahiwal coal power plant in green belt areas of Punjab was one of the reasons for smog in Punjab due to which the people were affected from diseases like TB and others. “Sahiwal is a green area where the coal plant should not be installed while China has closed down its coal power plants in their green and populated areas,” he said and added that the government aiming to eliminate loadshedding should not put the people to death.

To the query of PAC chairman, the officials of the Ministry of Energy admitted that the circular debt had reached at the level of Rs450 billion while the line losses were at 18 percent annually that translated into over Rs200 billion annually.

The chairman PAC observed that when the PML-N took over charge, then they had cleared the circular debt of over Rs480 billion and then the government claimed that now loadshedding will not be carried out. But now the circular debt had again reached at the level of Rs450 billion. “In the PPP’s tenure, there was high petroleum prices but the power tariff was at average Rs9 per unit and now when the petroleum prices are down, the power tariff was high,” he remarked. He said that Wapda was earning despite line losses of over Rs200 billion while the circular debt was rising.

Secretary Ministry of Energy Nasim Kokhar told the committee that the government was converting the power plant running on petrol into gas. The officials of the Ministry of Energy told the committee that the 16.3 percent is technical and administrative line losses while only 1.6 percent line losses were due to theft of electricity.

The PAC observed that it had been proved that the administrative and technical losses were more than the line losses due to power theft. The chairman PAC remarked that one percent line losses translated into Rs12 billion and line losses at 18 percent means loss of over Rs200 billion while the circular debt reached Rs450 billion despite assurance given that it will not be increased in future when the previous circular debt was cleared. “If the transmission line system is to be overhauled and the transmission line to 220KV grid converted, then the line losses could be reduced as well as circular debt also reduced and that amount can be spent on other sectors,” he remarked.

Mehmood Khan Achakzai remarked that Wapda had turned into the “Saudi Kafeel” which recovered its losses from the people.  The officials of the Ministry of Energy replied that the investment made in the local distribution will cover its cost in one year’s time. The officials of the Wapda told the committee that there were more than 200 million active consumers and 1.7 million connections were disconnected due to non-payment of dues and other reasons.