Circular debt again

ACCORDING to media reports power sector circular debt has, for the first time, spilled massively over into entire fuel supply chain, choking ports, refineries and down to railway bogies and tanker lorries. Though there are encouraging reports that fuel storages are full to the capacity but the power sector is struggling to cope with the issue of non-payment.
Independent Power Producers are once again complaining of non-payment and according to their claims payment of dues have reached Rs 414b and payment owed to WAPDA on account of power generation is in addition to this. The IPPs are threatening to call sovereign guarantees given by Government of Pakistan, which would amount to virtual default. This state of affairs should be unacceptable as it has emerged at a time when government is laying emphasis on generation of more and more electricity and for this purpose encouraging local and foreign entrepreneurs to invest in hydel, thermal, solar and wind power projects. These efforts are bearing fruits and today the national grid is receiving more and more power after an interval of few months and, as per government claims, the menace of load-shedding would be over by 2018. However, what is use of adding more power when we are unable to pay producers for whatever reasons. The Water and Power Ministry is headed by two vibrant and vocal PML (N) leaders — Federal Minister Khawaja Muhammad Asif and Minister of State Abid Sher Ali and therefore, one fails to understand why they are not paying attention to major issues that could undermine the entire progress and achievements of the sector made during last four years. Finance Minister Ishaq Dar was appreciated by almost all concerned for clearing IPPs dues but it seems that was a one-time solution and authorities concerned are clueless how to address the malaise on sustainable basis. We believe that corruption, theft, leakage and defaults are some of the main reasons for this regrettable state of affairs and things would not change if no attention were paid to address them. We have also observed that honest consumers are made to pay for corruption of the officials of power companies, rampant theft and default by influential individuals and government departments. The Prime Minister might intervene to safeguard interests of honest consumers and improve conditions in the power sector if we are serious to enter into a revolutionary phase of industrialisation.

Share this post

    scroll to top