THE power sector circular debt continues to surge as it has swelled to almost Rs1.9 trillion with payables hitting Rs.990 billion mark and loans and liabilities parked in PHPL (Power Holding Private Limited) standing at Rs.800 billion. The increase meant the incumbent government has piled up Rs.800 billion in the circular debt belying its claims of scaling down the monthly inflow in the circular debt from Rs.38 billion to Rs.12 billion.
The successive governments and rival political parties have been indulging in blame game as far as reasons and circumstances leading to accumulation of circular debt are concerned but regrettably none of them took genuine measures to curb the menace, which is used as a pretext by the authorities concerned to put more burden on consumers by way of frequent upward revision in electricity price. The circular debt stood at one trillion rupees when the PML(N) government left and it has now reached 1.9 trillion, which should be a source for concern for policy and decision makers. It is often said that the debt is increasing as the full cost of generation is not being recovered from the consumers. However, the real causes of increased cost of generation are not touched and instead the easy approach of passing on the burden to the consumer is followed by every government. There is massive electricity theft and apart from individuals, industrial and commercial sectors as well as some institutions are also involved in the crime. Then there are many ministries and departments of the federal and provincial governments that do not pay their bills. It is also known to all that the entire transmission and distribution system is dilapidated resulting into huge line losses. It is because of all this that despite a shift away from costly thermal power generation, which should have led to overall reduction in the cost of generation, the circular debt is increasing. The challenge would remain there until and unless theft is eliminated, defaulters are made to pay and the obsolete system is replaced with efficient one.
