ISLAMABAD - Circular debt of power sector is such a gift that former PPP-led government had left for interim government. It is a great challenge for any government to maintain even a reasonable supply of electricity during the first few months of government after taking charge.
Power crisis has started worsening in most of the areas of the country and within few days it would increase as with the wave of heat the demand of electricity would automatically increase and there would be no solution with the interim government to control the menace of loadshedding across the country.
Even after the new government has taken charge, it is really difficult to increase generation of electricity that caused masses to face more than 10 hours load shedding averagely across the country, an official said.
It is pertinent to mention here that circular debt has been identified as one of the major problems of power sector that makes it harder for the generation companies to maintain their energy generation level as without uninterrupted fuel supply maximum power generation is not possible.
PPP in its whole 5 years terms has not touched the very grave issues of line losses and circular debt. It is worth mentioning here that line losses has not come down during 5 years rather technically they have increased.
The other thing that government failed to address is recovery issues and last year too it was more than Rs 100 billion short recoveries observed that caused problems in paying to Independent Power Producers and oil companies that ultimately resulted into lesser power generation as compared to the available capacities of IPPs. Masses had to suffer a lot especially in summer last year as IPPs had decreased their generation due to non-availability of fuel to produce electricity that they claimed was because of non-availability of funds.
An official said that interim governments seem not able to collect the outstanding amounts due on private and government sectors.
It is worth mentioning here that circular debt in the last five years has increased to Rs 711 billion.
According to USAID report for the causes and impacts of power sector circular debt in the Pakistan in 2008 circular debt was Rs161.21 billion that increased to Rs235.65 billion in 2009. Similarly, circular debt in 2010 increased to Rs 365.66 billion and in 2011 this amount swelled to Rs 537.53 billion. During current fiscal year circular debt increased to Rs 872.41 billion.
Report further revealed that poor revenue collection from the distribution companies in 2012 added Rs 86.90 billion into the circular debt while another amount of Rs72 billion added due to poor recoveries by HESCO, PESCO, SESCO and QESCO.