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August 13, 2018

Defaulters in power sector cause 47pc surge in circular debt


August 13, 2018

ISLAMABAD: The running and permanently disconnected defaulters have emerged as the biggest threat to liquidity crisis in the power sector as their contribution has surged to alarming mark of Rs500 billion, which is 47 percent of the total circular debt that currently stands at Rs1,066 billion.

An official document, a copy of which is available with The News, shows that the running and permanently disconnected defaulters owe Rs500 billion to electric power distribution companies (Discos). They were to pay Rs429 billion to Discos by June 30, 2017, which have now alarmingly swelled by 17 percent to Rs500 billion by June 30, 2018, causing more surge to circular debt to staggering amount of Rs1,066 billion.

The running defaulters are said to be very influential and most of them have political tentacles and in Discos no one can dare to disconnect their electricity connection knowing the fact they are not paying bills. These defaulters owe huge amount of Rs405 billion to the government. However, permanently disconnected defaulters owe Rs95.3 billion to Discos.

Independent experts say that Rs405 billion is the low hanging fruit for the government to pluck and improve the fiscal situation of the power sector. They suggested that the government needs to either recover the electricity dues from the running defaulters or confiscate their properties through the land revenue board.

The document discloses that the running defaulters who stayed defaulted for over two months need to pay over Rs22 billion, and those who got defaulted for one month time owe Rs1.7 billion, three-month defaulters need to pay Rs4.327 billion, six-month defaulters owe Rs839 billion and 12-month defaulters require to pay Rs22 billion and those who are declared defaulted for the last over three years need to pay Rs346 billion.

Out of the huge amount of Rs405 billion that is needed to be recovered, the running defaulters in jurisdiction of Lahore Electric Supply Company (Lesco) owe to pay Rs7.835 billion, followed by the defaulters in Gujranwala Electric Power Company (Gepco) who need to pay Rs1.55 billion, in Faisalabad Electric Supply Company (Fesco) Rs1.232 billion and Islamabad Electric Supply Company (Iesco) Rs1.231 billion. Iesco is considered the best among the ten Discos but it has also failed to receive Rs1.231 billion from chronic defaulters. In Mepco, the running defaulters require to pay Rs2.61 billion. The date about Punjab Discos shows that in Lesco, the receivables from the running defaulters are the highest.

Quetta Electric Supply Company (Qesco) has emerged as most inefficient DISCO in the country wherein the running defaulters which also include the agricultural tube wells owe Rs196.006 billion to pay, followed by defaulters in Sukkur Electric Power Company (Sepco) that owes Rs71.247 billion, Peshawar Electric Supply Company (Pesco) Rs53 billion and Tesco Rs34.437 billion.

The documents says those who stayed as permanently disconnected defaulters for more than three years owe Rs79.9 billion to Discos and those who remained in this category of defaulters for three years need to pay Rs10.005 billion, defaulters for 12 months’ time require to pay Rs3.11 billion, six-month defaulters need Rs1.259 billion, three-month defaulters Rs211.67 million, and defaulters who got permanently disconnected for two months need to pay Rs825.93 million.

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