Circular debt resurfaces: Provinces run up Rs500b power debt

Sindh claims wrong billing, Punjab denies subsidy to agri-consumers, AJK rejects Nepra’s jurisdiction. PHOTO: FILE

ISLAMABAD: 

The Water and Power Ministry on Friday informed the National Assembly that around Rs500 billon is outstanding against various organisations and provincial governments, which is the main reason for a ballooning circular debt.

In a written reply to a question posed by MNA Shehryar Afridi, the ministry said the circular debt built mainly due to lack of funds to pay off the liabilities of power generation companies.

The government had taken some fiscal measures to control it, but the issue has re-emerged due to short payments by distribution companies (Discos) owing to less recovery, increasing line losses and short release of subsidy by the government.

Resultantly, receivable of power sector stood at Rs499 billion as of December 30, 2013.

The ministry informed the house that heavy amount stuck with AJK and all provincial governments mainly due to non-implementation of policy decisions of the government about the tariff determination and recovering mechanism.

Outstanding

The house was told that the AJK government does not accept Nepra’s jurisdiction for tariff determination and owes Rs30 billion in power dues.

K-Electric (KE), previously KESC, owes Rs50 billion due to non-payment of dues from July to November 2013.

Balochistan owes Rs70 billion on account of subsidy to the consumers using electricity to run agricultural tube wells and electricity dues.

Punjab government owes around Rs5.4 billion on account of energy charges and Rs5.6 billion on account of agriculture subsidy. The house was informed that Punjab government does not own the liability on the pretext that the decision of giving subsidy on electricity to farmers was taken by the cabinet without its consent.

Sindh government owes Rs50.9 billion in electricity dues. It has not been making payments on the pretext of wrong billing done against government connections.

The Khyber-Pakhtunkhwa owes nearly Rs19.9 billion out of which Rs18.6 billion relate to tariff differential. K-P government is not paying on the plea that Wapda is not paying mark up on their hydel profit.