Mounting circular debt to worsen power crisis

Attention: open in a new window. PDFPrintE-mail

Mounting circular debt to worsen power crisis

ISLAMABAD - With the start of hot summer, mounting circular debt might force some power plants to shut down their operation of electricity generation in upcoming days, worsening load-shedding crisis across the country. Reliable sources in water & power ministry disclosed that Pakistan Electric Power Company (Pepco) has to pay Rs 480 billion to fuel and power suppliers.

They said at present thermal power plants are operating 40 to 50 per cent power generation capacity, which may further drop due to non-payment of dues. They also said that six power plants including Orient, Halmore, Saif, Saphire, Uch and Hubco Narowal have been shut down due to circular debt issue.

“Pepco is to pay Rs 300 billion to Independent Power Plants (IPPs) which were earlier stood at Rs 200 billion,” chairman IPP Advisory Council Abdullah Yousuf said. He said that power crisis would further worsen in coming days due to circular debt, which was mounting on daily basis.

Meanwhile, the Senate Standing Committee on Water and Power was informed on Wednesday that there would be no relief in loadshedding in upcoming season, as people would be facing load shedding at least eight hours.

Briefing, Parliamentary Panel presided over by Senator Zahid Khan, Additional Secretary Water and Power, Arshad Mirza said that financial constraints do not allow running of RFO fired power plants at full capacity.

He said that power subsidy would reach Rs 291 billion by end June against allocation of Rs 185 billion for ongoing financial year. He said that a special bailout package of Rs 20 billion was approved by the caretaker Prime Minister Mir Hazar Khan Khoso but added that government cannot afford financial bleeding for an unlimited time.
He argued that Pakistan was going against international practices with respect to energy mix as no mega hydel project had been started after Ghazi Brotha Hydropwer Project.  “We have to re-fix our priorities and concentrate on coal as the developing countries are giving preference to coal fired power plants. ADB has already offered financing for two blended coal thermal power plants,” he added.

He apprised the committee that at present about 9200 MW electricity was being produced while the shortfall was 3400 MW, however due to line losses and some other technical faults the production was reduced by 1800 MW. He said that ongoing loadshedding would be controlled following the release of Rs 20 billion by Prime Minister as private companies do not provide electricity without money.

Mualana Abdul Ghafoor Haidri expressed his anger and said that Balochistan was being given less than 350MW of electricity even though its share was 700 MW; Arshad Mirza assured him that Balochistan would be supplied up to 500 MW power within the next three days and further improvements would be gradual.

Standing Committee recommended that Indus River System Authority (Irsa) should appoint Members from Federation and Balochistan.
The committee expressed anger over the absence of Chairman Wapda, Raghab Abbas Shah who was accompanying caretaker Prime Minister Mir Hazar Khan Khoso. “Caretaker Prime Minister’s job is to hold general elections and not to take heads of different organisations with him,” Zahid Khan said.

Chief Engineer from Lahore informed the meeting that out of the total production 21pc share was specified for Lahore Division, however it received only half. Senator Zahid Khan said that the information mechanism should be made effective so as to update people and all those officials who show slackness in performing their duties should be fired instantly. The representative of Lesco said that stern steps had been taken in this regard and ten employees were fired. Senator Shahi Syed said that main reason for the current power crisis is non-recovery of outstanding dues.

Senator Gul Muhammad Lot suggested that electricity should be provided to industry and the rich on full cost recovery. He argued that a short term plan may be submitted to the committee in its next meeting. He further stated that Ministry of Water and Power should take all appropriate steps to recover outstanding amount without any fear in the presence of a caretaker set up. “Brief us on your priorities in the next meeting, we should do what we can, to provide relief to the people,” he continued.
Senator Zahid Khan said that electricity price is already high and tariff should not be increased further.

Meanwhile Senate Standing Committee on Rules and Regulations was informed that Senator Mukhtar Ahmad Dhamara got restored power supply to electricity bills defaulters from Kandkot by pressurising Wapda officials.  The senate committee met under its chairman Tahir Mashdi Wednesday in parliament house. The committee reviewed the privilege motions of Senator Mukhtar Ahmad Dhamra and Senator Saeed Ghani. Privilege motion by the latter was disposed of being not pressed further.Chief Executive of Sukkar Electricity Supply Company told the committee that secretary to Senator Mukhtar Ahmad Dhamra asked XEN Wapda by telephone to restore power supply to the defaulting consumers of Kandkot. These consumers defaulted on the payment of outstanding bills to the tune of Rs 19,50,000.  Outstanding bills amounting to over Rs 100,000 have yet to be paid by secretary to senator, he further told.

The committee directed Pesco to recover all the outstanding dues  from defaulters and if any laxity is shown in this regard then the concerned officials of Wapda will be proceeded against under the rules.

Courtesy: The Nation

Forex open Market rates & comments Archive

Login Form