Circular debt rises to Rs300b again

ISLAMABAD -The monster of circular debt, the root cause of current load shedding, is rearing its head again, zooming upward to over Rs 300 billion, all due to the male-administration and complete failure of the regime to recover outstanding power dues.


Nevertheless, Minister for Water and Power, Khawaja Asif, who called for the nation to pray for the government during Ramazan, stated that the amount of circular debt is just Rs 197 billion, but experts maintain that the Minister has understated it considerably.

“Level of circular debt has gone beyond Rs 300 billion, which is increasing with the passing of every single day, chiefly because of mis-governance on the office of incumbent government”, said Abdullah Yousuf Chairman Advisory Council of Independent Power Producers (IPPs).

The primary cause behind the exorbitant increase in circular debt, sources stated, is a substantial diminution in the recovery of power Distribution Companies (Discos) both in public and private sector as most of the heads of Discos are junior officers or on contract.

Official documents available with Business Recorder reveal that Lahore Electric Supply Company’s receivables from public sector have increased by 74 per from Rs 2.910 billion to Rs 5.063 billion during the first nine months of current financial year.

The Finance Division criticized several factors for soaring circular debt. The factors included adverse fuel mix, the difference between the tariff intended by National Electric Power Regulatory Authority (NEPRA) and the tariff notified by the government, detain in tariff determination by NEPRA as well as delay in fuel adjustment and the belated release of tariff differential subsidy.

Khawaja Asif has signed letters to the Chief Ministers of provinces, Prime Minister, AJ&K and Governor FATA, looking their help in energy conservation and recovery of dues.


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