PEPCO receives Rs30 billion

KESC says all outstanding dues payable to PEPCO cleared.

KARACHI:

The federal finance ministry on Friday paid Rs30 billion to Pakistan Electric Power Company (Pepco) to settle outstanding dues of the Karachi Electric Supply Company (KESC).

KESC spokesperson Aamir Abbasi told The Express Tribune that “all outstanding dues payable to Pepco by KESC have been cleared as a result of this payment.”

“The government compensates KESC through consumer subsidies, so the company can sell electricity to consumers at a rate lower than the overall cost of generation and distribution,” explained Abbasi.

He added that KESC had requested the federal government to directly pay the amount to Pepco in order to reduce the quantum of inter-corporate debt in the power sector. He termed the development “a landmark achievement in overcoming the circular debt.”

KESC has also asked the Sindh government to clear dues between Sui Southern Gas Company (SSGC) and KESC in a similar manner. “Currently, the Karachi Water and Sewerage Board (KWSB) owes about Rs13 billion, while the City District Government Karachi (CDGK) owes about Rs4 billion to KESC,” added Abbasi.

Pepco is expected to in turn make payments against its outstanding payables to Pakistan State Oil (PSO) for purchases of furnace oil. A PSO official said that the company has not yet received any payments, but has been assured by Pepco that Rs30 billion will be disbursed next week.

Published in The Express Tribune, March 5^th, 2011.