LCCI seeks measures to control circular debt

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Salim Ahmed

Lahore

The Lahore Chamber of Commerce & Industry (LCCI) Saturday expressed grave concern over record circular debt and expressed and feared of dire consequences in the days to come if issue is not controlled.
In a statement, the LCCI President Malik Tahir Javaid, Senior Vice President Khawaja Khawar Rashid, Vice President Zeshan Khalil and Executive Committee Members said recently a report revealed that circular debt in Pakistan has become the biggest threat for the power sector of Pakistan.
“Why circular debt is not controlled at initial stage and what concerned authorities are doing”, the LCCI office-bearers questioned and said that huge amount of circular debt will result in huge reduction in power generation that would hit all segments whether it is trade, industry, agriculture or masses.
The LCCI office-bearers said that concerned departments have always chosen easy way to allow power distribution companies to charge from consumers heavy system losses. They said that it caused huge damage to the trade and industry therefore business community will not accept this unjustified method or increase in power tariff anymore. They also urged NEPRA not to facilitate and encourage the defaulters by writing-offs and putting whole burden on the shoulders of consumers.
The LCCI office-bearers said that repeated increases in power tariff are not solution to power sector problems but the government would have to address inefficiencies in the system. They said that NEPRA is continuously adding up a staggering amount as circular debt due to inefficiency in collection of electricity dues and its failure to stop power theft.
“These inefficiencies are actually an unjust tax on honest power consumers. The industrial sector as a whole pays its dues in-time and there is no line losses/theft in most of the industrial estates and industrial estates in Lahore are one example.” They said that power sector planners should take cue from the efficient distribution companies (Discos) where line losses are at the lowest. They said that the business community is shocked that instead of taking measures to control line losses and enhance cheap power generation up to capacity, policies were being evolved to add to the miseries of traders.
They said unimpressive growth of exports sector is indeed an eye opener and a wake-up call for the policy makers. They said that Pakistan had already lost a number of international markets and the proposed increase in power tariff would make local goods uncompetitive.
The LCCI office-bearers also demanded of the government to shift power generation from costly thermal means to cheap hydel resources. They said that some three decades ago the energy mix of Pakistan was roughly 70% from hydel resources and 30% from others. This proportion has almost reversed. Expensive Energy Mix is causing more problems for us.
The high price of energy adversely affects the export competitiveness of country as it takes major share in the production cost. The business community will be much relieved if per unit price of electricity is brought down because that would make our products more competitive in international market.
They said that unlike Pakistan, neighboring countries took right steps at appropriate times while building a number of small and large size dams in the same period of time. We kept hoping against hope and relying mostly on thermal based power plants. Resultantly, we are suffering as a nation on account of not being able to generate sufficient and cheap electricity.

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