ISLAMABAD: The energy sector keeps on being crippled, as circular debt again surged Rs40 billion in a duration of three weeks, touching around Rs550 billion.
Hub Power Company Chief Executive Khalid Mansoor apprised the Senate special committee on circular debt that circular debt was recorded at Rs507 billion on the last day of PML-N’s tenure and had risen Rs40 billion to Rs547 billion in June.
The session of the committee was presided over by Senator Shibli Faraz which discussed electricity theft, loadshedding and debt increase.
Mr Mansoor told the parliamentary panel the previous PML-N government had paid Rs200 billion but after that, no payments had been made to decrease circular debt.
The Hubco CEO shared 30 percent of the electricity was being generated from furnace oil, due to which the country’s electricity tariff was the highest in the region.
He disclosed because of transmission, Hubco was suffering Rs130 billion loss annually and electricity tariff in Pakistan stood at Rs13 per unit against Rs7 per unit in India.
However, Senator Jamal Deeni believed there had been no change in electricity demand throughout the year and Balochistan was receiving least electricity which had destroyed industries there.
The power division officials apprised the committee a plan had been developed under which less efficient power plants would be phased out.
National Electric Power Regulatory Authority (Nepra) has already revoked the licences of power plants in Multan, Shahdara and Faisalabad.
And Saif Power CEO Sohail Haideri highlighted gas supply had been halted to private power plants and since they were unable to run them on expensive fuels caused them to close their units.
Mr Haideri added the supply in last seven years had stood at a meagre 40 percent.
Saif Power CEO told the committee that circular debt surpassed the Rs1 trillion mark inclusive of debt parked in GHPL.
He added if this practice wasn’t changed, Pakistan could end up in a major crisis.
The CEO of Pakistan Electric Power Company (PEPCO) stressed an improvement in governance was required to end the menace of circular debt.
He added CEOs of various distribution companies had been changed six to seven times in last five years and queried how could things improve if these practices continued.
