PM directs power and finance ministry to formulate strategy for reducing circular debt

Islamabad: The relevant stakeholders in the power industry on Wednesday were directed by PM Shahid Khaqan Abbasi to investigation the reasons for the distribution and technical losses that were affecting the power sector.

In a meeting chaired by the PM, which was also attended by the Finance Minister Ishaq Dar and Petroleum Minister Jam Kamal Khan, he asked the officials to formulate a strategy for reducing the circular debt in the energy supply chain which was crippling the power sector.

Both the power and finance divisions were instructed to work in tandem on improving efficiencies affecting the power sector and devise out of the box strategy to fix this issue, said the PM.

Abbasi added that conversion of agricultural tube-wells to solar energy was a necessity as it would help in reducing the burden of subsidy and needs to be implemented on priority in Balochistan province. He said that it was the governments prerogative to ensure energy security and supply clean and affordable power to consumers.

As reported on Monday, circular debt in the power sector had crossed the Rs800b mark according to Pakistan Electric Power Company (PEPCO).

It had been shared in a recent meeting of the Economic Coordination Committee (ECC), that recoveries had improved from 88-89pc in 2014 to 93pc for 2015 and 2016. Line-losses also went down from 19pc in 2014 to 17.8pc by December 2016.

Water and Power Secretary, Yousaf Naseem Khokhar also had commented that due to fall in line-losses and improvement in recovery had helped the power sector to generate a positive inflow of Rs116b in last two years.

Lower global oil prices contributed to the restriction of the circular debt within levels of Rs320-330b from December 2014-June 2016, the ECC was told. Power generation companies were able to generate a profit of Rs5.77b during 2015-16 from total losses of Rs7.78b in 2013-14


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  1. It is heartening to hear the prime minister ordering correction of all deficiencies and faults in the power sector. This is bound to uplift the country’s economy because power shortage and its high cost are at the bottom of all our economic problems. Also, it is a pleasure to have a full-fledged separate ministry of energy. Producing electricity from indigenous sources should be our top priority. LNG, local coal, and any other cheap source of production would work wonders for our efforts to produce electricity which is abundant and cheap. Any primary source that causes the price of electricity to rise must be abandoned and cheap local sources adopted immediately. It is a great news to hear that WAPDA has been eliminated from electricity production and distribution. Wapda had been nothing but trouble for the people. It even created situations that were life-threatening for the people and it never cared about peoples’ lives. The 11KV lines it had laid 50 years ago over private lands at Chah Chashma locality at Chungi No. 6, Alipur Road Muzaffargarh for anti-water logging tubewells are now dilapidated and overhanging over houses causing a serious threat to resident’s life. The tubewells are gone, but the wires remain hanging over. The Honourable Prime Minister is requested to order Muzaffargarh MEPCO second subdivision to remove those life-threating 11kv wires immediately. They are useless and will not affect any electric supply.

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