Circular debt againCircular debt again

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ONE of the first actions taken by the PML-N government after  assuming the power in 2013 as to clear Rs 480 billion circular debt in the power sector in one go, which greatly helped improve the power supply situation but nothing concrete was done on the ground ever since to end this vicious cycle. This is the reason that today circular debt has again accumulated to the level paid off four years ago.  Chairing a meeting on energy related issues on Wednesday, Prime Minister Shahid Khaqan Abbassi directed the authorities concerned to jointly work out revalidation of individual factors contributing to the circular debt, focus on improving efficiencies and out of the box solutions for resolving the issue. We understand one of the main issues resulting in the re-emergence of circular debt is the government’s inability to collect bills which then results in non-payment of amount to the power generating companies who in turn have their supply of power cut off by oil and gas suppliers. In our view, this is the biggest problem of the energy sector, which is affecting the lives of both domestic and industrial consumers.  As the incumbent Prime Minister himself is looking after the affairs of the newly carved out energy ministry, therefore, the out of box solution that he is talking about should also come from him and the ministry. But it should not be in the form of extorting money from the consumers by inflating the power bills, which already are highest when compared with other regional countries. Increase in bills on the one hand will add to the woes of the domestic consumers and on the other hand increase the production cost of our industries. Therefore the solution is not very complex but very simple and i.e. to ensure one hundred percent collection of bills including those from the public sector departments besides bringing to book to those involved in power pilferage. Then there is also need to improve power transmission system in order to reduce line losses. These steps we understand will greatly help the government to address the problem more efficiently.