Senate panel seeks measures to cut Rs566 billion circular debt

ISLAMABAD: Senate standing committee on circular debt on Wednesday underscored a need of urgent measures to cut the size of energy sector’s liability that swelled to Rs566 billion.

Senator Shibli Faraz, convener of the committee said both the government and people of Pakistan should be sensitised about the issue. “This problem must be addressed on war footing,” Faraz said.

Waseem Mukhtar, additional secretary of Power Division sought reframing of policies especially with regards to power distribution companies (discos) to ensure progress on reduction in circular debt. Mukhtar said boards comprising professionals with no vested interest must be constituted to resolve the issues. He said each disco has its own planning wing, which should come up with new ideas and solutions to ease the situation.

Zafar Abbas, managing director of National Transmission and Dispatch Company (NTDC) said progress in energy transmission has become impossible as it entails huge costs. Abbas, however, said NTDC has planned to upgrade transmission lines to meet growing electricity demand.

Zaigham Ishaq Khan, joint secretary of Power Division said load-shedding rota was rescheduled in November 2017 as per a decision of the division.

Government previously decided that electricity must be supplied to all the areas without suspension regardless of their recovery status. This caused an increase in line losses that overburdened the power sector in Pakistan and also caused an increase in circular debt.

The meeting was told that Banu, Dera Ismail Khan, Charsadda and the Khyber Circle were most notorious in terms of electricity theft. The percentage of recovery in the areas was less than 30 percent. Malakand Division was, however, a top bill-paying area. Peshawar Electric Supply Company suffered total losses of Rs38 billion during the last fiscal year, its officials said.

Hyderabad Electric Supply Company’s (Hesco) officials said its total annual line losses reached Rs27 billion. Hesco’s line losses stood at 30.7 percent. Senator Usman Khan Kakar said electricity production from solar resources might ease energy crisis in Balochistan.

Quetta Electric Supply Company suffered losses worth seven billion rupees in the fiscal year of 2017/18. Sukkur Electric Supply Company’s officials said the distribution company entailed Rs9.5 billion in losses with recovery of 60 percent.

Senator Faraz said delay in the Patrind hydroelectric project in Muzaffarabad entailed losses worth $20 million due to capacity charges. On right of way and its intricacies, the committee’s convener asked the Power Division to provide the committee with province-wise details of defaulters. He asked planning wings to be more proactive.

Faraz said the committee’s target is to deal with the menace of circular debt. Senators Jehanzaib Jamaldini, Behramand Khan Tangi, Usman Khan Kakar, Sajjad Hussain Turi, Mir Kabeer Ahmed Muhammad Shahi, Moulana Atta-ur-Rehman, Ayesha Raza Farooq and senior officials of power division attended the meeting.