Featured Circular debt increased to Rs 2150 billion from Rs 1612 billion in 2018-19, Senate body told

[muhammadhafeezmalik]

Circular debt increased to Rs 2150 billion from Rs 1612 billion in 2018-19, Senate body told


The Senate Standing Committee on Power was Thursday informed that the PTI government added Rs 45 billion per month to the circular debt during fiscal year 2019-20.

On 30th June, 2020, the circular debt had increased to Rs 2150 billion from Rs 1612 billion in 2018-19, official of the Power Division said while briefing the Senate Standing Committee on Power here. The Committee was briefed regarding alleged removal of domestic meters of small farmers for running mono motors on single phase domestic connections by GEPCO. Points of public importance regarding exact figure of circular debt, transparency in PESCO recruitment process were considered as well.

The committee, which met with Senator Fida Muhammad in chair, was further informed that in fiscal year 2018-19 the total circular debt was Rs 1612 billion which has reached Rs 2150 billion during the previous fiscal year. A total of 532 billion in 2019-20 (or an average Rs 44.33 billion) per month were added to the circular debt. It is worth mentioning here that the PML (N) government, in its last year of its tenure 2017-18, had added Rs25.583 billion per month the circular debt. During PTI first year in office (August 2018 to June 2019) around Rs430 billion were added to the circular debt at the average of Rs41 billion per month. In the second year of the incumbent government in office, total of Rs532 billion were added to the circular debt at the average of Rs44.33 billion per month.


The committee was also informed that due to coronavirus and bad performance of the power distribution companies, the Discos have failed to collect Rs 240 billion electricity dues. The committee was informed by the CPPA officials that during the previous fiscal year wind power was generated at Rs 29 per unit while solar was generated at Rs 25 per unit. Senator Nauman Wazir said that the burden of the inefficiencies of the Discos should not be transferred to power consumers. Senator Siraj-ul-Haq said that first it needs to be determined whether Discos are services bodies or business institutions. He said from going through the available facts and figures it seems that Discos have failed. He said that by imposing taxes on the electricity the tariff has been increased for the farmers. The Prime Minister of Pakistan used to say that they will provide electricity to the farmers at Rs 5.35 per unit.

Senator Nauman Wazir said that the cheapest electricity is being produced in KP while the lowest rates are being charged from the consumers of KE. Senator Siraj asked, “Why the power tariff is not uniform for all the power distribution companies?” An official of Power Division informed that the rate is uniform in the entire country but since KE had gone to the court therefore the rates of KE were lower than the rest of the country.


Taking up point of public importance regarding transparency in the recruitment process of meter readers and linemen by PESCO; the Committee was informed that the testing agency had not provided a carbon copy of the answer sheet to candidates. During the current recruitment phase, companies were instructed to finalise the hiring by an independent testing agency after a competitive process as per PPRA Rules in consultation with Ministry of Energy (Power Division). The Committee formed an informal committee to review the matter in detail.

While being briefed about the alleged removal of domestic meters of small farmers for running mono motors on single phase domestic meters for irrigation, the Committee was informed that certain consumers have got connections under domestic tariff for their Deras but they are running single phase mono motors and tube wells up to 4-8 KW for irrigation of their lands. The use of mono motor for agricultural purposes on domestic meters is a violation of tariff against which connection was applied and granted. As per SOPs, consumers have to apply for agricultural connections. The Committee directed that this matter will be taken up in detail in the next meeting and that until then all connections must be restored. It was also stressed that Agricultural policy must be revised and made more farmer-friendly. CEO GEPCO was summoned in the next meeting.

PTI govt added Rs45b per month to circular debt during FY2019-20

ISLAMABAD-The Senate Standing Committee on Power was Thursday informed that the PTI government added Rs 45 billion per month to the circular debt during fiscal

nation.com.pk

 

[ziaulislam]

time is running out to fix the system..

1. govt needs to negotiate with IPPs this would reduce the current bill by 300-500 billion
2. abolish tube wells subsidy and give loans from tube wells to convert to solar
3. rapidly add solar power which is cheap and can help reduce the bill
4. sell distribution companies and LNG plants, this will bring a trillion rupees of revenue
5. abolish subsidies above 50 units,along with IPPs deal and lower LNG prices we might get away with it
i think the above measures would mean govt would be able to tackle this problem in 3-5 years..but it has lost key time, govt first piroity should be negotiate with IPPs, bring in cheap solar power and privitize LNG plants & distribution companies of islamabad, lahore and karachi to get some money out

 

[volatile]

1. govt needs to negotiate with IPPs this would reduce the current bill by 300-500 billion
2. abolish tube wells subsidy and give loans from tube wells to convert to solar
3. rapidly add solar power which is cheap and can help reduce the bill
4. sell distribution companies and LNG plants, this will bring a trillion rupees of revenue
5. abolish subsidies above 50 units,along with IPPs deal and lower LNG prices we might get away with it
i think the above measures would mean govt would be able to tackle this problem in 3-5 years..but it has lost key time, govt first piroity should be negotiate with IPPs, bring in cheap solar power and privitize LNG plants & distribution companies of islamabad, lahore and karachi to get some money out

These are all in correct .circular debt was and is increase/ing due to Govt running high cost electric station which utlizes Diesel/Furnace oil having efficiency of 20% and cost per KWH around 20/25 Rs/KWH .Second reason is collection from Disco`s which is now 96% from 80% .Alhumdulilah PESCO on top of that .So why govt produced electricity from expensive power plants as they failed to order LNG .So This is all man mad crisis

 

[muhammadhafeezmalik]

time is running out to fix the system..

1. govt needs to negotiate with IPPs this would reduce the current bill by 300-500 billion
2. abolish tube wells subsidy and give loans from tube wells to convert to solar
3. rapidly add solar power which is cheap and can help reduce the bill
4. sell distribution companies and LNG plants, this will bring a trillion rupees of revenue
5. abolish subsidies above 50 units,along with IPPs deal and lower LNG prices we might get away with it
i think the above measures would mean govt would be able to tackle this problem in 3-5 years..but it has lost key time, govt first piroity should be negotiate with IPPs, bring in cheap solar power and privitize LNG plants & distribution companies of islamabad, lahore and karachi to get some money out

I agree most of the points. Government should negotiate with IPPs but it would not reduce the current bill by 300-500 billion. As the agreement with IPPs which were installed in 90s like KAPCO and HUBCO have completed the 30 years of assistance, so now Pakistan is now no longer bound to pay them capacity charges. Yes, the IPPs established under the Policy of 2002 should be re-negotiated but the recent LNG & Coal fired IPPs are government owned entities are working perfectly, the capacity charges are going to government itself, the government can payback it to the consumer, no re-negotiating is needed.

Abolish tube wells subsidy and give them one time payment to convert tube wells to solar especially in Baluchistan, Pakistan was paying 23b in 2017 as subsidies or payment for non-paid bills of 30000 tube-wells in Baluchistan. After 18th amendment agriculture is now provincial subject so The Punjab government has been providing farmers with solar-powered tube-wells on 80 per cent subsidy since 2013-14. Besides, it had also been working, with the help of foreign funding, to replace conventional tube-wells with those that run on solar power.

Subsidies should come an end but price of electricity should come down by changing the energy mix. We should say good-bye to furnace-oil and diesel based power plants.

 

[ziaulislam]

I agree most of the points. Government should negotiate with IPPs but it would not reduce the current bill by 300-500 billion. As the agreement with IPPs which were installed in 90s like KAPCO and HUBCO have completed the 30 years of assistance, so now Pakistan is now no longer bound to pay them capacity charges. Yes, the IPPs established under the Policy of 2002 should be re-negotiated but the recent LNG & Coal fired IPPs are government owned entities are working perfectly, the capacity charges are going to government itself, the government can payback it to the consumer, no re-negotiating is needed.

Abolish tube wells subsidy and give them one time payment to convert tube wells to solar especially in Baluchistan, Pakistan was paying 23b in 2017 as subsidies or payment for non-paid bills of 30000 tube-wells in Baluchistan. After 18th amendment agriculture is now provincial subject so The Punjab government has been providing farmers with solar-powered tube-wells on 80 per cent subsidy since 2013-14. Besides, it had also been working, with the help of foreign funding, to replace conventional tube-wells with those that run on solar power.

Subsidies should come an end but price of electricity should come down by changing the energy mix. We should say good-bye to furnace-oil and diesel based power plants.

We encouraging a disaster ...subsidies in agriculture should end..solar is now so cheap that cost of panels will be equal to a year or two of subsidies

 

[BRAVO_]

few points are not practical..already we have highest electricity per unit prices in the region... majority of public earning too low or they below poverty line any further pressure will bring civil unrest... majority of population depend on agriculture .. in india they are facilitating public for tubewells electricity to increase productivity and we are in opposit direction on the other hand our population is increasing at full speed resulting less agriculture land day by day ... main causes of circular debts are line losses even in some areas people dont bother to pay bills while kundas are common in sindh and elsewhere therefore need an efficent supply system in this regard... yes agreed govt should negotiate with IPPs and thats what they are doing but govt can only negotiate if the second party file a case similar to Karkey case in ICJ i am sure decesion would not be much different because previous govt did their best to collapes pakistani economy

 

[HaMoTZeMaS]

I agree most of the points. Government should negotiate with IPPs but it would not reduce the current bill by 300-500 billion. As the agreement with IPPs which were installed in 90s like KAPCO and HUBCO have completed the 30 years of assistance, so now Pakistan is now no longer bound to pay them capacity charges. Yes, the IPPs established under the Policy of 2002 should be re-negotiated but the recent LNG & Coal fired IPPs are government owned entities are working perfectly, the capacity charges are going to government itself, the government can payback it to the consumer, no re-negotiating is needed.

Abolish tube wells subsidy and give them one time payment to convert tube wells to solar especially in Baluchistan, Pakistan was paying 23b in 2017 as subsidies or payment for non-paid bills of 30000 tube-wells in Baluchistan. After 18th amendment agriculture is now provincial subject so The Punjab government has been providing farmers with solar-powered tube-wells on 80 per cent subsidy since 2013-14. Besides, it had also been working, with the help of foreign funding, to replace conventional tube-wells with those that run on solar power.

Subsidies should come an end but price of electricity should come down by changing the energy mix. We should say good-bye to furnace-oil and diesel based power plants.

Have (Had) anyone (Mr.You) tried to tell this to our beloved Mr Nawaz and Mr Zardari?

No.. Right ?

 

[muhammadhafeezmalik]

Have (Had) anyone (Mr.You) tried to tell this to our beloved Mr Nawaz and Mr Zardari?

No.. Right ?

All these suggestions were discussed during their tenures, some were implemented too.

 

[The Accountant]

These are all in correct .circular debt was and is increase/ing due to Govt running high cost electric station which utlizes Diesel/Furnace oil having efficiency of 20% and cost per KWH around 20/25 Rs/KWH .Second reason is collection from Disco`s which is now 96% from 80% .Alhumdulilah PESCO on top of that .So why govt produced electricity from expensive power plants as they failed to order LNG .So This is all man mad crisis

Basis of your allegation? If you are right then this should be looked into but please dont refer me to news article as most of the time they dont know the technical details.

Furthermore, these numbers are for 2018-19, LNG issue was I guess in 2019-20 but I could be wrong. SO share the details.

I would also like you to comment on solar and wind cost of Rs. 25 and 29 whereas in India is now as low as Rs. 2.44 per unit which is PKR 5.44 per unit. Who is responsible for this mess?

 

[volatile]

asis of your allegation? If you are right then this should be looked into but please dont refer me to news article as most of the time they dont know the technical details.

Furthermore, these numbers are for 2018-19, LNG issue was I guess in 2019-20 but I could be wrong. SO share the details.

I would also like you to comment on solar and wind cost of Rs. 25 and 29 whereas in India is now as low as Rs. 2.44 per unit which is PKR 5.44 per unit. Who is responsible for this mess?

lol bro .You always negate the facts .There are many links to miss ordering of LNG

Energy Update - News, Updates related to Power, Nuclear, Solar, Renewable Energy in Pakistan

We keep you up-to-date with latest news and updates related to Energy Resources in Pakistan, inluding Renewable Energy, Solar Energy, Nuclear Energy & much more.

www.energyupdate.com.pk

COVID-19: Qatar to supply three, not five, LNG cargoes a month to Pakistan

ISLAMABAD: In an unusual development, Qatar has extended major solace to Pakistan by reducing the LNG supply to three cargoes from five in a month as was demanded by PTI government as the country...

www.thenews.com.pk

Pakistan cuts April LNG shipments amid growing risks to South Asian gas demand

Pakistan has cut its April LNG cargo deliveries as the country's coronavirus lockdown eats into domestic natural gas consumption, while Bangladesh could be the next country in South Asia to push back

www.spglobal.com

PTI govt likely to shelve tender for LNG purchase | The Express Tribune

Power producers refuse to lift imported gas due to economic merit order

tribune.com.pk

“The world’s cheapest power plants are closed and electricity is being produced through most expensive fuel, causing a daily loss of Rs1 billion to the national exchequer,”

when the PTI government came to power, there was no shortage of electricity and gas in the country. He alleged that the government was generating some 4,200 megawatts of electricity through furnace oil, which was considered to be the most expensive way of producing electricity.

The PO issued to Khussro`s , Dawoods power plant over cheaper LNG plants

For circular debt

Pakistan's circular debt rising by Rs21b per month: ADB | The Express Tribune

Bank’s estimate counters govt’s claim of reducing circular debt to Rs12b a month

tribune.com.pk

 

[ziaulislam]

These are all in correct .circular debt was and is increase/ing due to Govt running high cost electric station which utlizes Diesel/Furnace oil having efficiency of 20% and cost per KWH around 20/25 Rs/KWH .Second reason is collection from Disco`s which is now 96% from 80% .Alhumdulilah PESCO on top of that .So why govt produced electricity from expensive power plants as they failed to order LNG .So This is all man mad crisis

Furnace oil is made by domestic scrap refineries and if they arent able to sell it the whole system will be disrupted

Hence you need refinery as well..

Pakistan problems are decades in making expectations are to fix them in magical time or we will bring the people who made the problem lol..what kinda idiots are we

 

[volatile]

partially true but in 2015 they were clear given complete information that furnace oil will not be required in coming years and they need to upgrade with catalytic converters which refineries dint do (another mafia).
as globally furnace oil power plants are shutting down due to inefficiencies as well as higher costs .It was better to shut down these refineries which are in efficient and causing these losses .As even fuel these produced is substandard causing massive losses to newer technologies as well as investments

Furnace oil is made by domestic scrap refineries and if they arent able to sell it the whole system will be disrupted

Hence you need refinery as well..

Pakistan problems are decades in making expectations are to fix them in magical time or we will bring the people who made the problem lol..what kinda idiots are we

 

[RoadRunner401]

The poor governance - like low recovery of monthly bills and high power theft - has given birth to the complicated ‘circular debt’. This has continued to compromise working capital at power production, transmission, distributions and oil and gas supplying firms.

Moreover, the non-stop addition of new production plants despite stagnant demand for years has continued to inflate ‘capacity payment’ to the standby plants. This is another huge financial burden and a grave cause of making power expensive for the end-consumers.

The high inefficiencies of distribution companies (like Quesco and Pesco) are contributing 60% towards the ever-growing circular debt, which is estimated to reach Rs4 trillion by 2025

I am willing to bet the majority of workers in these corporations are unqualified political and military personals and this is where the majority will walk away whistling....

 

[Pandora]

Our transmission system bleeds 20-30% of electricity and then there are those upstanding Pakistanis who are involved in electricity theft. Back in our ancestral village there used to be a Chaudry who owned a coal mine through which he made millions every month but still he used to steal electricity.

 

[The Accountant]

lol bro .You always negate the facts .There are many links to miss ordering of LNG

Energy Update - News, Updates related to Power, Nuclear, Solar, Renewable Energy in Pakistan

We keep you up-to-date with latest news and updates related to Energy Resources in Pakistan, inluding Renewable Energy, Solar Energy, Nuclear Energy & much more.

www.energyupdate.com.pk

COVID-19: Qatar to supply three, not five, LNG cargoes a month to Pakistan

ISLAMABAD: In an unusual development, Qatar has extended major solace to Pakistan by reducing the LNG supply to three cargoes from five in a month as was demanded by PTI government as the country...

www.thenews.com.pk

Pakistan cuts April LNG shipments amid growing risks to South Asian gas demand

Pakistan has cut its April LNG cargo deliveries as the country's coronavirus lockdown eats into domestic natural gas consumption, while Bangladesh could be the next country in South Asia to push back

www.spglobal.com

PTI govt likely to shelve tender for LNG purchase | The Express Tribune

Power producers refuse to lift imported gas due to economic merit order

tribune.com.pk

“The world’s cheapest power plants are closed and electricity is being produced through most expensive fuel, causing a daily loss of Rs1 billion to the national exchequer,”

when the PTI government came to power, there was no shortage of electricity and gas in the country. He alleged that the government was generating some 4,200 megawatts of electricity through furnace oil, which was considered to be the most expensive way of producing electricity.

The PO issued to Khussro`s , Dawoods power plant over cheaper LNG plants

For circular debt

Pakistan's circular debt rising by Rs21b per month: ADB | The Express Tribune

Bank’s estimate counters govt’s claim of reducing circular debt to Rs12b a month

tribune.com.pk

I am not negating anything infact i am saying that if ur allegations are right then it is a serious issue.

Brother but as i afraid u are comparing lng shortage news 2019-20 with electricity expense of 2018-19.

I am not against critisizing PTI on performance but we should raise right issues with right data to make a difference. However, if i am critisizing PTI it does not mean that i am going to approve PMLN as i strongly believe that this mess is a result of PMLN and PPP.

The biggest example is purchase of solar electricity at 25 rupee per unit vs 5.5 rupee by india during similar timelines.

So if pti is doing something wrong then i will critisize them but as a financial expert i am giving a professional opinion that financial management of pti is much better infact financial decision of pmln were to destroy economy of Pakistan.