LAHORE – International Monetary Fund (IMF) has put the PakistanTehreek-e-Insaf (PTI) led government in a tight spot demanding theelimination of circular debt and phasing out of power subsidies in a bidfor zero losses policy.In the most recent development as the Government of Pakistan (GoP) and IMFhead towards finalising a deal for a possible $6.50 billion bailoutpackage, a report according to *Business Recorder *claims that electricitytariff is likely to see a 25 per cent hike effective from July 1, 2019.
It has also been reported that the agreement is likely to be signed on May10.The power division has promised IMF that it would bring down the eye soringcircular debt to Rs250 billion by the end of 2019. In addition, the powerdivision has informed IMF that Sukuks worth Rs200 billion will be issued toaddress the issue and distribution companies (DISCOs) have already shareddetails of their properties with the power division that will be held ascollaterals against the loan.
Moreover, sources claim that not all units produced are being sold due to aconsiderable gap between production and sale which is caused by systemlosses. And these are likely to increase if the national transmission anddistribution systems are not upgraded and improved.
It has also been highlighted that there is a gap between the billing andthe receivables of the Central Purchasing Power Agency Guaranteed (CPPA-G).It was suggested that this gap can be reduced if the subsidies marked forthe power sector are paid out on time, quarterly adjustments are done bythe National Electric Power Regulatory Authority (NEPRA) and recoveries areimproved by the DISCOs.
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The IMF mission has also been informed that recoveries have improved byRs52 billion as a result of the drive against defaulters and electricitythieves.
