ISLAMABAD : The Pakistan Economy Watch (PEW) on Sunday said despite low oilprices the circular debt has crossed the mark of Rs 1000 billion emergingas a grave threat to the economy.
LNG and many other power projects have failed to deliver raising concernsabout investments to the tune of billions of dollars, it said.
Political interference, mismanagement, and secrecy has damaged the powersector resulting in circular debt which is draining the resources, saidMurtaza Mughal, President of PEW
The unaddressed circular debt is to compromise growth and hitting masseswith power outages in the summer which is contrary to the claims ofproduction of electricity to the tune of 25 thousand megawatts; more thanthe national demand.
Dr Murtaza Mughal said that the debt has become a big threat to the image,credit rating and economic survival of the country. It is hittingindustrial expansion, investment in Thar coal and other energy projects andpushing away investors while it is leaving IPPs unable to buy fuel or repaybank loans.
The chronic circular debt hits ability of the government institutions tobuy fuel resulting in problems including loss of around Rs 400 billion tothe industrial sector, increase the cost of production, reduce exports andtax collection and fan restlessness.
Things are seriously wrong deep inside the energy sector and the way it ismanaged by the government. Various measures the present government hastaken have failed to deliver.