Power sector circular debt soars to Rs1,032b

ISLAMABAD: There has been no relief in liquidity crisis even after the fiscal year 2017-18 ending June 30, as circular debt continues to stay very much there at Rs1.032 trillion (Payables of Rs499 billion and Rs533billion loans of power sector parked in Power Holding Private Limited (PHPL).

Joint Secretary (Power) in Power Division Zargham Eshaq Khan told The News that payables that earlier stood at Rs547 billion have now tumbled to Rs499 billion after offloading the liabilities of Rs48 billion. However, the loans of the power sector have jacked up to Rs533 billion parked in PHPL. He also disclosed that the receivables from the private sector have risen to Rs638 billion. The payables which were at Rs507 billion by May 31, 2018--the last day of the PML-N government but because of Ramazan, the loss making feeders were also provided the electricity on humanitarian basis owing to which the volume of payables had also surged to Rs547b. Out of Rs547b, the Power Division has offloaded Rs48b bringing down payables to Rs499b. Khan also said major amount of Rs89b is also part of the circular debt only because of the delayed of one and half year in notifying the tariff of electricity and unless and until, the said loss is compensated, it will continue to be the part of the circular debt. The documents, however, available with The News also paint the bleak picture unfolding that so far in the current financial year ending on June 30, about huge amount of Rs85 billion electricity has been stolen. More importantly, the documents also unveil that to cope with this kind of inefficiency and overcome the gap of Rs85 billion losses in the head of theft alone, the overbilling of Rs1-1.5b per month is extended to the legitimate consumers every month. The documents also show that recovery of electricity sold and billed to the end consumers has reduced to 89 percent which is why the power sector sustained the loss of Rs132 billion. “This means that more generation of electricity means more increase in circular debt,” the official said.