'Circular debt soars to Rs807b'

Power minister Omar Ayub says govt develop more wind and solar power projects through competitive bidding

ISLAMABAD: The country's circular debt, payable to the power producers has topped Rs807 billion and the government is introducing measures to improve recovery of dues and outstanding liabilities, Power Minister Omar Ayub Khan told the Senate on Wednesday.

In his written reply during the question hour, the minister said the payment of circular debt depended on collection from electricity distribution companies, based on their recoveries from consumers, which was a continuing process.

"The circular debt payable to Independent power producers (IPPs) as on December 31, 2018 was Rs683,484 million, while the amount payable to fuel suppliers by thermal power plants (Gencos) is Rs124,403 billion," the minister told the house.

Khan said that the government was striving to gradually manage the outstanding amount of circular debt. "The payment of circular debt depends on collection from electricity distribution companies, based on their recoveries from consumers, which is a continuing process," he said.

He added that the government was talking steps to improve the recovery of outstanding liabilities. "An anti-theft campaign has also been launched across the country to control line losses and improve the recovery position, he said.

According to the minister, the current line losses stood at 18.3%, adding that 95% of those line losses were occurred because of 'Kunda' culture [direct hooking from main line]. The minister said the losses were particularly high in Sukkur (36.7%), Peshawar (36.2%) and Hyderabad (29.9%) regions. To curb the menace, he added, ABC [aerial bundled conductors] cables were being installed on which hooking did not work.

Khan said that the agreements to generate electricity from alternate sources were made in 2006 but unfortunately, about a year and a half ago, the alternate sources of energy were abandoned to shift to the liquefied natural gas (LNG).

The minister said the government had decided to develop more wind and solar power projects through competitive bidding in order to avail benefits of decreasing prices through market competition. "We must press for alternate source of energy," he added.

"We want investors to participate and purchase energy to provide it to Balochistan and Gilgit-Baltistan, the minister told the house, adding that 19,000 tube wells in Balochistan were being converted to solar energy.

Elaborating further, the minister said that several steps had been taken by the government through the Alternative Energy Development Board (AEDB) and the Private Power Infrastructure Board (PPIB) in respect of foreign investment in power generation sector.

"The AEDB is pursuing the development of renewable energy-based power generation projects through private sector on IPP mode under the Renewable Energy Policy, 2006," he said. "The government is providing several fiscal and financial incentives to private investors in the Renewable Energy sector."

The incentives, the minister said, included preparation and approval of bankable standard security agreements [Energy Purchase Agreement and Implementation Agreement] for wind, solar and bagasse co-generation power projects.

The government is also conducting a resource assessment of renewable energy resources in Pakistan, while a detailed ground data-based resource assessment of wind, solar and biomass was being carried out through the support of the Energy Sector Management Assistance Programme (ESMAP).

The power minister pointed out the cost of the Nandipur Power Project estimated at Rs22,334.75 million in 2007, but it was revised in 2013 to Rs 58,416.20 million. "The cost incurred so far is Rs57,655 million and currently, the plant is capable of generating 460-480MW of electricity on gas fuel.



The petroleum minister Ghulam Sarwar Khan informed the house that in the past three years, licences were issued to three foreign companies for oil and gas exploration. One company had so far started work, while another company had been issued no-objection certificate. "The results of drilling will come by March."

Religious Affairs minister Nurul Haq Qadri said that there was no provincial quota for Hajj and the balloting was carried out after Hajj applications had been received. "The Punjab IT board carries out balloting as a third party," he added.

The Senate approved an adjournment motion with a majority vote on the delay in announcing the new National Finance Commission (NFC) Award. The motion was presented by Sassui Palejo. The Chairman, Sadiq Sanjrani, said that the meeting on the NFC award would be held soon.

Senator Siraj ul Haq and Mushtaq Ahmed's adjournment motion on the atrocities being committed by the Indian forces against the Kashmiris was rejected. Sanjrani said that the matter had been discussed and resolutions on the issue had also been approved.