Islamabad: Power Division is unlikely to achieve its own set deadline of December 2020 for balancing zero stock of circular debt currently standing at level of Rs 978 billion along with PHPL stock of Rs 804 billion, it is learnt reliably on Friday.
Another setback to Power Division, sources revealed, a consortium of Islamic banks for raising Rs 200 billion for circular debt by the Ministry of Finance was objected by Auditor General of Pakistan (AGP) for not following the competitive criterion.
Following the PPRA rules and regulation for raising Rs 200 billion through Islamic sukuk, the same official said that it would take at least three months or much more, whereas the power division has submitted a circular debt capping plan with the IMF that the current circular debt stock would be achieved zero level in Dec 2020.
Spokesperson of the Power Division while commenting on current status of Power Sector Circular Debt, total liabilities and receivables said that Circular Debt at the beginning of Sep 2018 when the PTI govt took office, was Rs 1.33 trillion. It was increasing at a rate of Rs 38 billion a month. With the measures taken by the government, encapsulated in the Circular Debt Capping Plan, the Power Sector has considerably reduced the rate of increase to approximately Rs. 12-15 billion per month.
The Spokesperson said that various measures including tariff rationalization, recovery drives, anti-theft campaign and system modernization were initiated. Due to these measures, the addition to circular debt is expected to be reduced to Rs. 130billion in 2019-2020 compared to the target of Rs 130bn in the Circular Debt capping plan.
Total Circular Debt as per the definition by December 2019 stood at Rs. 978 Billion, owed to both public and private generators, while the liabilities of PHPL payable to banks for loans taken in the past to pay generators stood at Rs.804 billion, resulting in the total liabilities of Rs. 1782 Billion.
The report in certain media sections that Circular Debt has reached 1.9 to 2 trillion is factually incorrect.
For the first time in the history of power sector, the sector has mobilised totally to fight against loss theft and corruption. This is not a weekly campaign but has been sustained for more than a year. We are confidant that immense loss reduction, theft reduction and action against corrupt elements as well as improvement in infrastructure are leading to better service delivery to the common man and that we would fulfill the targets given in the circular Debt Capping Plan.