Circular debt has risen to Rs1.4tr, PAC told
ISLAMABAD: Circular debt, which stood at Rs1.14 trillion during the term of the previous government, has now increased to Rs1.4 trillion. The energy sector’s circular debthas reached Rs1,362 billion mark, of which Rs755bn is of the Power Holding Company Limited and Rs607bn of Standby Term Finance Facility loans.
This was said by Power Division Secretary Irfan Ali while briefing the Public Accounts Committee (PAC) on Tuesday at its meeting held in the Parliament House and chaired by opposition leader Shahbaz Sharif.
Take a look: The circularity of circular debt
Circular debt generally arises out of high electricity losses (due to theft and inefficiencies in the distribution system) and inability to recover the total amounts billed to consumers by power companies. This leads to a financial gap because of which the power sector fails to discharge its obligations towards fuel suppliers and banks. This in turn badly affects both the energy and financial sectors.
Over 12,000MW power plants to be completed with $25bn investment in energy sector under CPEC
Mr Ali cited almost all of the above reasons for the recent increase in circular debt. Giving the details of the sector-wise demand-based payables of circular debt as on Nov 30, he said Rs36.2bn was payable to generation companies running plants on gas and re-liquefied natural gas, Rs83.5bn to oil-based companies, Rs450.5bn to independent power plants, Rs28.6bn to nuclear plants and Rs156.7bn to the National Transmission and Dispatch Company/Wapda.
He said that with the assistance of the Asian Development Bank, the government was going to launch the Advance Metering Infrastructure project in the areas covered by the Lahore Electricity Supply Company and the Islamabad Electricity Supply Company at a cost of $40 million. In the second phase, the project will be extended to the Peshawar Electricity Supply Company, Multan Electricity Supply Company, Hyderabad Electricity Supply Company and other areas with high power theft cases. The second phase of the project will cost $500m.
In response to a question by the committee members, the official said that the power division had launched a drive to bring to book the elements involved in power theft both within the distribution companies and consumers. He added that an indiscriminate operation was being carried out against thieves and so far relevant police stations had been approached to lodge 15,746 FIRs against 21,475 “thieves” and 11,356 of them had been registered.
Mr Ali further said that Pakistan had planned to take the share of renewable energy in the energy mix to 25 per cent by 2025 and to 30pc by 2030.
According to him, at present total installed capacity is 33,836 megawatts (MW) and de-rated capacity 31,006MW. Total hydel power production is 9,730MW and total generation by Gencos is 5,682MW of which 4,177MW is de-rated production. Total capacity of thermal plants run by IPPs is 15,186MW and their de-rated capacity 13,973MW.
Total installed capacity of nuclear plants is 1,345MW and de-rated capacity 1,246. Solar capacity is 400MW, wind 1,185MW and Bagasse-based plants’ installed capacity is 306MW with de-rated capacity of 295MW. Hydel contributes is 27pc of the total installed capacity, LNG 26pc, natural gas 12pc, furnace oil 16pc, coal 9pc and renewable and nuclear 5pc each.
The committee was informed that with an investment of $25bn under the China-Pakistan Economic Corridor (CPEC), power plants of 12,334MW capacity would be completed. The CPEC has 18 priority projects with a capacity of 11,110MW with an investment of $21.7bn and three actively promoted power projects with a capacity of 1,224MW and total investment of $3.3bn.
Published in Dawn, January 2nd, 2019
https://www.dawn.com/news/1455026/circular-debt-has-risen-to-rs14tr-pac-told
ISLAMABAD: Circular debt, which stood at Rs1.14 trillion during the term of the previous government, has now increased to Rs1.4 trillion. The energy sector’s circular debthas reached Rs1,362 billion mark, of which Rs755bn is of the Power Holding Company Limited and Rs607bn of Standby Term Finance Facility loans.
This was said by Power Division Secretary Irfan Ali while briefing the Public Accounts Committee (PAC) on Tuesday at its meeting held in the Parliament House and chaired by opposition leader Shahbaz Sharif.
Take a look: The circularity of circular debt
Circular debt generally arises out of high electricity losses (due to theft and inefficiencies in the distribution system) and inability to recover the total amounts billed to consumers by power companies. This leads to a financial gap because of which the power sector fails to discharge its obligations towards fuel suppliers and banks. This in turn badly affects both the energy and financial sectors.
Over 12,000MW power plants to be completed with $25bn investment in energy sector under CPEC
Mr Ali cited almost all of the above reasons for the recent increase in circular debt. Giving the details of the sector-wise demand-based payables of circular debt as on Nov 30, he said Rs36.2bn was payable to generation companies running plants on gas and re-liquefied natural gas, Rs83.5bn to oil-based companies, Rs450.5bn to independent power plants, Rs28.6bn to nuclear plants and Rs156.7bn to the National Transmission and Dispatch Company/Wapda.
He said that with the assistance of the Asian Development Bank, the government was going to launch the Advance Metering Infrastructure project in the areas covered by the Lahore Electricity Supply Company and the Islamabad Electricity Supply Company at a cost of $40 million. In the second phase, the project will be extended to the Peshawar Electricity Supply Company, Multan Electricity Supply Company, Hyderabad Electricity Supply Company and other areas with high power theft cases. The second phase of the project will cost $500m.
In response to a question by the committee members, the official said that the power division had launched a drive to bring to book the elements involved in power theft both within the distribution companies and consumers. He added that an indiscriminate operation was being carried out against thieves and so far relevant police stations had been approached to lodge 15,746 FIRs against 21,475 “thieves” and 11,356 of them had been registered.
Mr Ali further said that Pakistan had planned to take the share of renewable energy in the energy mix to 25 per cent by 2025 and to 30pc by 2030.
According to him, at present total installed capacity is 33,836 megawatts (MW) and de-rated capacity 31,006MW. Total hydel power production is 9,730MW and total generation by Gencos is 5,682MW of which 4,177MW is de-rated production. Total capacity of thermal plants run by IPPs is 15,186MW and their de-rated capacity 13,973MW.
Total installed capacity of nuclear plants is 1,345MW and de-rated capacity 1,246. Solar capacity is 400MW, wind 1,185MW and Bagasse-based plants’ installed capacity is 306MW with de-rated capacity of 295MW. Hydel contributes is 27pc of the total installed capacity, LNG 26pc, natural gas 12pc, furnace oil 16pc, coal 9pc and renewable and nuclear 5pc each.
The committee was informed that with an investment of $25bn under the China-Pakistan Economic Corridor (CPEC), power plants of 12,334MW capacity would be completed. The CPEC has 18 priority projects with a capacity of 11,110MW with an investment of $21.7bn and three actively promoted power projects with a capacity of 1,224MW and total investment of $3.3bn.
Published in Dawn, January 2nd, 2019
https://www.dawn.com/news/1455026/circular-debt-has-risen-to-rs14tr-pac-told
