Pakistan's Circular Debt soars

Pakistan's Circular Debt soars
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ISLAMABAD: (APP) A sub-committee of the Senate on Water and Power was informed Thursday that the circular debt has increased to Rs.393 billion due to non-recovery of 100 per cent payments.

The committee which met with Nauman Wazir in the chair discussed over-expenditure in the power generation projects including Nandipur, Neelum Jhelum, energy mix and Economic Priority and the sources of energy.

Briefing the committee, Secretary Ministry of Water and Power Mohammad Younas Daga said circular debt's issue was not a performance related rather it was an issue of cash flow.

He said it has three main components including recovery, determination of up-front tariff and subsidy.

He said earlier the recovery was only 88 per cent which has been enhanced to 93 per cent during the last two years.

Younas Daga said the transmission and commercial (T&C) losses have also been reduced from 28 per cent to 17.9 per cent.

He said an amount of Rs 116 billion was saved owing to the efforts of the ministry.

He said Balochistan's province owed Rs.106 billion on account of electricity bills which also contributed to accumulation of circular debt.

CEO Neelum Jhelum Hydropower Project Brig (R) Zareen told the committee that the first unit of the project would start generation in February 2018.

He said over all 91 per cent work has already been completed.

He said the project was re-designed after the 2005 earthquake resulting its delay. The cost of the project was also soared due to delay in its construction.

The committee was informed that the cost of civil work of the project has increased to Rs.165 billion from Rs.90 billion.

Regarding Nandipur Power Plant, the committee was told that the project was delayed for four years due not vetting by the concerned Ministry.

The project had to be refinanced due to prolong delay.

National Accountability Bureaus officials told the meeting that inquiry into the Nandipur had been completed.

To a question, the Secretary said that IESCO CEO was removed due to delay in smart metering project being financed by Asian Development Bank and his irresponsible statment.

The committee also invited the then Law minister and secretary law ministry in its next meeting scheduled to be held on March 20.

The meeting was attended by Senator Daud Khan Achakzai, Secretary Water and Power Mohammad Younas Daga, DG NAB Zahir Shah, and other senior officials.

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