Govt plans to bring circular debt down to Rs1.88tr by June

Published January 11, 2022
A view of the meeting of the National Assembly’s Standing Committee on Power presided over by MNA Chaudhry Salik Hussain of PML-Q, on Monday. — Photo via NA Committees Twitter
A view of the meeting of the National Assembly’s Standing Committee on Power presided over by MNA Chaudhry Salik Hussain of PML-Q, on Monday. — Photo via NA Committees Twitter

ISLAMABAD: Amid criticism from parliamentarians over unending tariff hike and loadshedding in various parts of the country, the government on Monday said it has targeted the power sector circular debt to come down to Rs1.88 trillion by end-June, about Rs400bn lower than a year ago.

At a meeting of the National Assembly’s Standing Committee on Power presided over by MNA Chaudhry Salik Hussain of PML-Q, recently appointed Secretary Power Division Asif Haider Shah testified that circular debt stood at Rs2.28tr by end-June 2021 and tariff adjustments among other steps were necessitated to bring those liabilities to Rs1.88tr by end-June this year.

This was challenged by the members of the committee including Mr Hussain — a government ally — who said the circular debt according to his knowledge was rising by Rs35bn every month. He asked Mr Shah to verify statistics and get back to the committee in the next meeting with authentic and verified numbers. The secretary power said that circular debt would be reduced to Rs1.88tr by year end due to the recent steps taken by the government.

The committee members raised the issue of load shedding and corruption in various distribution companies (Discos) and alleged that rates for illegal payments for various routine services in power companies had increased in recent years.

MNA Zahid Durrani from Khyber Pakhtunkhwa said the period of load shedding in areas of his constituency went up to 20 hours and fell in the domain of Peshawar Electric Supply Company (Pesco). He said there were ‘rates’ for any kind of job required by the consumers and such rates had gone up in recent years.

The secretary power responded that companies were resorting to power cuts due to thefts and line losses. Such long durations could be in some districts where the recoveries were minimal, he added.

He, however, conceded that consumer complaints about electricity usually go waste and there was no proper mechanism in this regard. Pesco and Sukkur Electric Power Company (Sepco), he said, were among the top three or four companies taking down the entire power system.

Pesco CEO said that private consumers owed about Rs147bn to the company and non-payments from government offices were on top of that. Only from Bannu, Pesco had to recover Rs12bn, he added.

Secretary power conceded that there were very high number of complaints and asked the Pesco chief to personally look into the matter as such reports from parliamentarian could not be unfounded. Somewhere the staff of the companies must be involved, he observed adding that time frame for new electricity connections was not being adhered to. He said the staff of Discos was asleep while houses were being built under transmission lines. He assured the committee to put in place a mechanism on this issue.

MNA Riaz-ul-Haq said that he had not seen so much corruption in 27 years and alleged that now the staff openly and straight away demand bribes from consumers for getting work done.

MNA Shazia Marri demanded a comprehensive inquiry against contractor mafia in companies and said the consumers were being forced to pool their own funds to buy a transformer — a service the companies had substantial funds allocated for and spent on papers.

Published in Dawn, January 11th, 2022

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