Disco’s recoveries fall, as circular debt crosses Rs750 billion

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ISLAMABAD: The Power Ministry on Monday acknowledged on Monday circular debt has crossed over Rs750 billion due to decrease in recoveries in by power distribution companies.

Due to increasing circular debt, power distribution companies have failed to invest in power infrastructure, reported Business Recorder.

This is the first time that Ministry of Power division has admitted to this occurrence in backdrop of talks that lack of investment in transmission lines was causing regular tripping and power outages, mainly in remote areas.

Ministry of Power Division acknowledged this fact during a meeting of Planning and Development, Sub-Committee of the National Assembly, chaired by Sher Akbar Khan.

During the meeting, it was highlighted that governance problems in the power sector contributed to this massive increase in circular debt, which had become uncontrollable.

The Deputy Secretary Project Development, Qaiser Ahmed commented financial status of some power distribution companies was abysmal due to issue of circular debt. He added decline in recoveries was contributing to the rise in circular debt and highlighted Peshawar Electric Supply Company (PESCO) and Hyderabad Electric Supply Company (HESCO as the ultimate culprits in this regard.

And another official shared that recoveries of Qesco, Hesco, Pesco and Sepco billed amount had fallen drastically and were very poor.

Committee Chairman, Mr. Khan said transmission system remained heavily overloaded due to under-investments, which resulted in Pesco being unable to transmit electricity in areas under its jurisdiction.

He added it had become a regular occurrence for consumers to provide maintenance charges for a failed transformer in their respective areas from their own pockets.

In this regard, the committee members directed the ministry to seek funds from donors for establishment of grid stations.

The committee was apprised PC-I of 132 KV grid station at Buner had been given go-ahead in Pesco’s 7th secondary transmission grid program and site for it had been chosen by the appropriate committee.

Also, the construction of a double circuit 132 KV transmission line for Barikot-Daggar had also been given go-ahead.

The tender for setting up of this transmission line which includes towers foundation etc has been initiated and is under consideration for approval.