Circular debt surges to Rs1080b from Rs106b in 2008

ISLAMABAD: A meeting of the Senate Special Committee on Circular Debt was held here in Parliament House under the Chairmanship of Senator Shibli Faraz.

The meeting was attended by Senator Jehanzaib Jamaldini, Senator Behramand Khan Tangi, Senator Usman Khan Kakar, Senator Sajjad Hussain Turi, Senator Mir Kabeer Ahmed
Muhammad Shahi, Senator Moulana Atta-ur-Rehman, Senator Ayesha Raza Farooq
and senior officers of the Power Division, NTDC, QESCO, HESCO, SEPCO and

While addressing the issues related to the circular debt which is Rs566 billion in the
country, Convenor Committee, Senator Shibli Faraz, was of the view that it is imperative
that both the government and the people of Pakistan be sensitised about the issue. This
problem, he asserted must be addressed ona war footing.

Power Division Additional Secretary Waseem Mukhtar briefed the Committee about the overall situation of the Energy Sector in Pakistan and discussed remedial measures
to be taken to reduce circular debt. He asserted that for any progress to be made it was
imperative that policies be reframed especially with regards to DISCOs. He asserted
that boards must comprise professionals that have no associated interests. He further
informed the Committee that every Discos had their own planning wing and that they
should come up with new ideas and solutions to ease the situation.

According to NTDC Managing Director Zafar Abbas, making any progress in terms of energy transmission has become impossible as it entails huge costs. He said, however, that in view of growing demand a plan has been put in place to upgrade transmission lines.

According to Power Division Joint Secretary, Zaigham Ishaq Khan in November as per decision the Cabinet Division load-shedding rota was rescheduled. It was revealed that
the government instructed that electricity must be supplied to all areas without suspension regardless of their recovery status. This caused an increase in line losses that overburdened the power sector in Pakistan and also caused an increase in circular debt.

While discussing circular debt at the DISCOs level, it was observed that Banu, DI Khan,
Charsadda and the Khyber Circle were most notorious in terms of electricity theft. The
percentage of recovery in these areas was less than 30 percent. Malakand Division was
a top bill paying area. According to PESCO officials, the company suffered total losses
worth PKR 38 billion.

According to HESCO officials total annual line losses entailed Rs27 billion. The
percentage for Company losses was 30.7 per cent. While discussing Balochistan and
losses incurred in the province, Senator Usman Khan Kakar was of the view that the
energy crisis in the province can only be resolved by resorting to Solar Energy. In the
financial year, 2017- 18 QESCO suffered losses worth Rs18.7 billion.

According to SEPCO officials company losses entailed 9.5 billion whereas recovery was
60 per cent. Convenor Committee, Senator Faraz pointed out that delay in the Patrind
Project entailed losses worth $20 million due to capacity charges.

While discussing the Right of Way and its intricacies, Convenor Committee Senator
Faraz asserted that law making must be undertaken so that a mechanism is in place for
further action.

Convenor Committee, Senator Faraz instructed the Power Division to provide the
Committee with province wise details (Industrial/Domestic/Commercial) of running
defaulters. He asserted that the Committee’s target was to deal with the menace of
circular debt. Convenor Committee, Senator Faraz showed displeasure at the lack of
out of the box solutions of DISCOs for the issues that plagued them. He asserted that
the Committee expected their planning wings to be more proactive.

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