News
Saturday, August 20, 2011
PM orders payment of Rs 25bn to oil companies* Circular debts reach Rs 225bn, PEPCO receivables stands at Rs 126 billion against provinces
By Zeeshan Javaid
ISLAMABAD: To curtail the severe power load shedding across the country because of the burden of circular debt, Prime Minister Yousaf Raza Gilani on Friday directed Federal Finance Minister Dr Abdul Hafeez Sheikh to pay Rs 25 billion to Pakistan State Oil and other petroleum companies by September 15.
Chairing a meeting of the committee on energy crisis the Prime Minister’s Secretariat, Gilani directed Sheikh to pay Rs 25 billion to PSO and Independent Power Producers (IPPs) by mid of September enabling them to generate electricity to the maximum capacity so that people don’t have to face prolonged load shedding.
Well-placed sources informed Daily Times that the circular debt of power sector shot up to Rs 225 billion while Pakistan Electric Power Company (PEPCO) receivables stand at Rs 126 billion due against provinces and special areas - like KESC Rs 40 billion, Punjab government Rs 10 billion, Sindh Rs 39 billion, Azad Jammu and Kashmir Rs 9.9 billion, Khyber Pakhtunkhwa government Rs 18 billion and FATA Rs 10 billion.
It was also learnt that oil sector circular debt has reached Rs 300 billion with power sector circular debt at Rs 200 billion, official sources said. Sources further informed that the IPPs had the capacity to generate around 8,000MW power in the country and despite power shortages in the country IPPs are at present generating around 5,400MW.
During the last meeting on energy crisis, the IPPs representative informed the government that in case Rs 150 billion are not paid to them, the IPPs would close down their operations in the near future. This would result in loss of generation capacity of around 4,000MW in the country and there would be serious implications for the economy. It was informed that the IPPs are facing a serious financial crunch and have already crossed their bank credit limits. Currently, total generation in the country is estimated at 14,779MW and demand is at 18,541MW, and in case IPPs are closed this shortfall would increase from 3,762MW to 7,762MW with unprecedented load shedding in the country, sources in the power sector informed Daily Times.
Due to non-payment of power dues, the IPPs have already closed down and the country has lost 2,500MW generation capacity and further closure of IPPs would result in generation reduction from existing 14,779MW to 10,779MW, resulting in massive increase in power load shedding, added the sources.
At least 6,053MW electricity generated by hydel resources, 1,984 from thermal, 6,607 by the IPPs and only 135MW has been generated by Rental Power Plants while 670MW electricity power injected to the Karachi Electric Supply Company The sources in the power sector informed that mismanagement in the public sector is creating difficulties for the IPPs and these units have no option except to close their operations due to non-payment of their dues. Due to non-payment of dues of the IPPs on time, the federal government has paid Rs 26 billion additional interest in the last fiscal year. Gilani directed the committee to immediately resolve the issue of circular debt.
Courtesy www.dailytimes.com.pk