News
Thursday, August 11, 2011
Energy committee mulls options to settle circular debt* Decides to invite Independent Power Producers to discuss roadmap for clearance of their Rs 150 billion dues against PEPCO
By Sajid Chaudhry
ISLAMABAD: The second meeting of High Level Energy Committee on Wednesday proposed five ways to permanently eliminate circular debt.
According to a senior official, the five ways proposed were increasing power tariff through the imposition of a surcharge, implementation of tariff determination decisions by NEPRA, increasing power tariff from Rs 1.83 per Kwh to Rs2 per Kwh, allowing PEPCO to adjust late payment surcharge to IPPs as an expense and additional supply to KESC.
The meeting was chaired by Finance Minister Hafeez Shaikh, who also decided to meet with Independent Power Producers (IPPs) today (Thursday), to discuss the immediate clearance of dues amounting to Rs 150 million against PEPCO to avoid the closure of IPPs due to lack of funds.
The meeting was informed that circular debt was rising due to the non-increase in power tariff in the month of July, non-implementation of tariff determination decisions made by NEPRA, subsidy to KESC, non-recovery of receivables and unjustified line losses in many distribution companies of PEPCO, the official added. It has also decided to invite heads of the major loss-making DISCOs to explain the reasons behind high losses and theft in generation, transmission and distribution.
It has been agreed that a plan for the permanent settlement of circular debt, clearance of IPPs’ dues and meeting financing needs would be finalised and formal approval would be sought from the prime minister to ensure proper implementation of the plan in the country, explained the official.
Hafeez Shaikh informed reporters that payments to IPPs and elimination for circular debt with financing needs of the power sector are being discussed to enable the private and public sector to cater o the requirements of the country.
Federal Minister for Water and Power Syed Naveed Qamar, after the meeting, said that financial issues, circular debt, receivables of power sector and payments needed to be made to IPPs and that tariff issues had been discussed in the meeting to develop the power sector on a sustainable level. He said that the government wanted to develop a plan mapping out the development of the power sector on a meeting short, medium and long-term basis.
Finance Secretary Waqar Masood Khan said that issues like circular debt, receivables of power sector, efficiency and other issues had been discussed in the meeting to set priorities for the resolution of issues. On a question of issuance of bonds and TFCs for the settlement of circular debt, he said that TFCs and bonds were only a temporary solution. He said that they wanted to root out circular debt once for all and prevent its return in the future.
Courtesy www.dailytimes.com.pk