ISLAMABAD: Pakistan’s circular debt, including loans and liabilities ofpower sector, stood at Rs1,004 billion as of May 31, 2018 — the last dayof the PML-N government.
The volume of circular debt may further grow on account of the holy monthof the Ramazan as electricity supply has been ensured to consumers of lossmaking feeders at Iftar and Sehr times during the holy month.
According to the Joint Secretary Power Division Zargham Eshaq Khan, thetotal payables by the government in power sector stand at Rs507 billion andthe loans of power sector parked in Power Holding Private Limited (PHPL)are at Rs497 billion. “If we add the said two accounts, then the circulardebt of the power sector amounts to Rs1.004 trillion,” he said.
Dr Miftah Ismail told that his government had reduced by May 31 thecircular debt to Rs397 billion and it will further be reduced to Rs347billion if the amount of Rs50 billion, that the Economic CoordinationCommittee (ECC) had approved and allowed the PHPL to arrange fromcommercial banks, is further disbursed to the IPPs, PSO and nuclear powerplants. However, Zargham Khan negated the claim, saying that the payablesstood at Rs507 billion by May 31, according to the official record.
Currently, the revenue based loadshedding is being extended, but onhumanitarian basis, electricity is also being supplied to consumers of highloss feeders at the time of Iftar and Sehr, which is why in the days tocome the circular debt will further swell.
Zargham Khan said that so far in the current financial year, the powersector has also paid Rs46 billion as interest and some portion of theprincipled amount of loans, which is why the PHPL’s loans are stillcontained at Rs497 billion.
He said that the major amount of Rs89 billion is also part of the circulardebt only because of delay of one and a half years in notifying the tariffof electricity and unless and until the said loss is compensated, it willcontinue to be the part of the circular debt.