ISLAMABAD, FEB 24 (DNA) : Prime Minister Imran Khan has summoned an important meeting with NEPRA Chairman Tauseef Farooqi and Federal Minister for Energy Omar Ayub Khan to find a solution to the menace of skyrocketing circular debt in the power sector – as the overall liabilities rose to Rs1.782 trillion by December 2019, up 34 per cent since September 2018 when PTI came to power.
The premier aims to restrict further increase in the electricity tariffs, and has sought recommendations from the NEPRA’s chairman, Mr Omar Ayub and Advisor to the PM on Finance and Revenue Abdul Hafeez Sheikh.
On Friday, in written statement sent out to the media, the Power Division underlined that the circular debt at the beginning of September 2018 when the PTI government took office was Rs1.33 trillion and was increasing at a rate of Rs38bn a month.
It said the total circular debt as per the definition by December 2019 stood at Rs978bn owed to both public and private power generators, while the liabilities of Power Holding Private Ltd (PHPL) – payable to banks for loans taken in the past to pay generators stood at Rs804bn.
The total liabilities, therefore, amounted to Rs1.782tr at end-December. The total increase was therefore worked out at about Rs452bn.
The ministry said the measures taken by the government as part of the circular debt capping plan had considerably reduced the rate of increase to approximately Rs12-15bn per month – compared to Rs38bn a month before the PTI came to power.
The measures for circular debt reduction included tariff rationalisation, recovery drives, anti-theft campaign and system modernisation, the Power Division said. Due to these measures, the addition to circular debt was expected to be reduced to Rs130bn in 2019-20 as per the Circular Debt capping plan, it added.
The Power Division said it was for the first time in the history of power sector that the entire chain had been mobilised totally to fight against losses, theft and corruption. “This is not a weekly campaign but has been sustained for more than a year”, the ministry said hoping the reduction in losses and theft coupled with action against corrupt elements as well as improvement in infrastructure would lead to better service delivery to the common man.
‘Affordable power for consumers’
On the other hand, Mr Omar Ayub said on Monday that the government has been targeting to provide sustainable, affordable and reliable power to the consumers by producing 75 to 80 percent power from indigenous resources.
He addressed the inaugural ceremony of Energy Week organised by the National Electric Power Regulatory Authority (NEPRA) in Islamabad.
The minister said the government has formulated a renewable energy policy under which the share of alternative sources of energy would increase by 20pc by 2025 and 30pc by 2030.
Mr Ayub pointed out the energy sector of Pakistan offered investment opportunities of $100 billion, including $45 billion in power generation, $20 billion in transmission and $15 to $20 billion in distribution.
“Pakistan is a large market for all the industries of the world to come and invest in […] Pakistan is an open market with high rates of return […] we are also removing barriers of entry.”
Mr Ayub expressed satisfaction that several companies were evincing interest in relocating their manufacturing facilities of producing wind turbines and solar panels to Pakistan.
Addressing the ceremony, Chinese Ambassador to Pakistan Yao Jing said despite the challenge posed by coronavirus, China has been determined to take forward the multibillion dollar CPEC project. He said the projects under the CPEC would remain unaffected by this temporary challenge.
The ambassador said the next stage of the CPEC would focus towards cooperation in diverse sectors including industrial, agriculture, science and technology and renewable energy and hydropower. He was confident that this would give a new momentum to the future development of Pakistan’s economy.
Appreciating the structural reforms being introduced by the present government, he said under the leadership of Prime Minister Imran Khan, the energy sector of Pakistan would undergo transformation to focus on providing affordable and reliable energy.
He assured that the Chinese government and investors would fully cooperate with Pakistan in this endeavor.
