March 18 , 2017

Balochistan, Fata, AJK power arrears causing Rs393 bn circular debt

Senate body told Neelum-Jhelum project completed;
one unit to start generation of 240MW in Feb 2018

ISLAMABAD: The Ministry of Water and Power Thursday underlined that the National Electric Power Regulatory Authority (Nepra)’s ‘deficient tariff’ and the power arrears against Balochistan, Fata and AJ&K were major instrumentals behind ballooning power sector’s circular debt.

While briefing the senate subcommittee on Water and Power that met here with Senator Nauman Wazir in the chair, Secretary Water and Power Younus Dagha said that unless the 100 percent recovery from power consumers is made, the government shall not be able to fully get control over circular debt issue.

Secretary said that Nepra wants to bill the power consumers on the line of California-like system, which is impossible in Pakistan. Nepra’s deficient tariff (the tariff which does not meet the cost of generation) was contributing to increasing circular debt. So far, due to this tariff Rs150 billion have been added to the country’s power circular debt.

The ministry of water and power on his part has been making and made strong efforts to streamline the system, controlling leakages from the system and proper utilization of resources. Resultantly, ministry has saved huge Rs116 billion from going waste. He further said that for the first time in country’s history the power companies’ losses have been brought down to 17.9 percent from earlier 20 percent.

He said, had the Nepra given factual and efficient tariff, there would have been no issue of circular debt. He also said that non-payment of dues by the Balochistan government; Fata and Azad Jammu and Kashmir (AJ&J) were also one of the instrumentals in increasing circular debt. Regarding power arrears, he said that Balochistan has to pay Rs106 billion, AJ&K Rs75 billion and FATA to pay the Rs29 billion to the center.

The committee also expressed serious concern over the government’s failure in implementation of the ‘energy mix planning’ project that was with the Planning commission for the last four years. The ministry replied that the project is under process and in next six months it will be finalized.

Regarding Nandipur Power Plant, the committee noted that it seems that the ministry of law and justice (during last government) was responsible for delay in completion of the Plant, its cost overrun and inability to generate power from it with full capacity.

The project file remained unattended with the ministry of law and justice for almost four years, but after the Supreme Court’s order it was moved for further action.

The committee said that for the loss of around Rs113 billion in Nandipur power plants, the then law minister and law secretary was responsible. Nauman Wazir termed four-year delay in completion of Nandipur power plant as ‘criminal’ which increased the cost of the project. The committee also called Senator Babar Awan and the then law secretary in the next meeting of the committee to be held on March 20. It should be asked from them that why they toll four long years on giving legal advice on the project, Wazir said.

Senator Nauman Wazir said that the Independent Power Producers Advisory Council (IPPAC) claim that the circular debt is Rs414 billion, secretary termed their claim as untrue and said it is around Rs393 billion. The advertisements appeared in national dailies by the IPPs was bringing a bad name for the country.

Project director of 969 megawatts Neelum-Jhelum Hydropower Project informed that 91 percent work on the project has been completed. From its one unit, 240MWs of power will start generating in Feb 2018. Due to delay, the civil work of Rs90 billion has been increased to Rs165 billion.



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