An official of Finance Ministry told Business Recorder that the issue of power sector has been discussed almost in every meeting of the Economic Coordination Committee (ECC) of the Cabinet since the PTI government assumed the charge. He added that in one of the ECC meetings, a comprehensive briefing was given on the power sector and all of its aspects. The meeting was informed that power sector liabilities on July 31, 2018 increased to Rs 596 billion from Rs 565 billion in June 2018.
The total liabilities of PHPL increased to Rs 1.188 trillion with Rs 596 billion circular debt accumulated during the last five years and Rs 582 billion previous one parked in the PHPL. The official further stated that sector-wise demand based payable circular debt as on July 31, 2018 was Rs 8.073 billion of Gas Generation Companies (Gencos), Rs 107.432 billion of Oil Generation Companies (Gencos), Rs 375.441 billion of Independent Power Producers (IPPs), Rs 20.941 billion of nuclear and Rs 84.154 billion of Water and Power Development Authority (Wapda) and National Transmission and Distribution Company (NTDC).
Sources said that constituent of Rs 596 billion circular debt accumulated during the last five years of previous government of Pakistan Muslim League (N) included Rs 202.1 billion on account of losses as sector losses stood at 18.3 percent against the target of 16.3 percent; (ii) Rs 205.6 billion on account of low recovery @ 90.07 percent against the recovery target of 100 percent; (iii) non-payment of subsidies to Federally Administered Tribal Areas, AJK and industrial support added Rs 102 billion to circular debt (Rs 14.2 billion Fata subsidy, Rs 54.44 billion of AJK and Rs 33.4 billion of industrial support). Outstanding K-Electric payments are Rs 86.26 billion and all these numbers bring the circular debt to Rs 596 billion.