Circular debt rose by Rs260b this year, panel told

Power division officials say K-Electric a defaulter of Rs61b

ISLAMABAD:

The power division on Thursday informed a Senate panel that the circular debt had increased by Rs260 billion this year and K-Electric was a defaulter of Rs61 billion.

A meeting of the Senate Standing Committee on Power was held presided over by its chairman, Senator Saifullah Abro.

Senator Talha Mahmood, a member of the body, said that he was surprised by the statistics on the circular debt.

Chairman Abro said that we were unable to manage one company that had been privatised so far. “It is being heard that more companies are also being privatised,” he added.

K-Electric CEO Moonis Alvi replied that his power company’s receivable dues stood at over Rs300 billion. “The federal government has to pay us Rs280 billion,” he added.

“We are also ready for arbitration on dues. We will accept the decision and the government will also have to accept it.” The chairman of the committee expressed his frustration over the non-provision of privatisation agreement with the K-Electric.

He complained that the power division was not cooperating with the panel on the issue.

“We have the power purchase agreement but not the privatisation deal,” he lamented.

The power division additional secretary said his department did not have the privatisation agreement signed with K Electric.

He added that the agreement was with the Privatisation Commission.

The K-Electric CEO said they too did not have a copy of the deal.

Abro responded that the panel would seek the details of all agreements with independent power producers and K-Electric.

Also read: Circular debt drops Rs189b in 10 months

Senator Talha Mahmood pointed out that power outages were taking place countrywide and that issued had not been discussed so far.

The chairman of the committee said all companies should provide the number of deaths due to electrocution in the year as well details of how many civilians were affected by accidents.

He also sought the details of compensation to the heirs of those who had died.

The Pakistan Information Commission had recently announced its decision that the privatisation deal with K-Electric could not be made public because of a “confidentiality” clause in the agreement.

It expressed its "helplessness" as the country could suffer a huge financial loss if the pact was made public.

However, the commission directed the privatisation ministry to maintain a balance in the agreements between the commercial interests of private companies and the public.

The privatisation ministry conceded before the commission that the details of the confidentiality clause in the agreement could result in large financial penalties for the country in case it was made public.

A three-member bench, headed by Chief Information Commissioner Muhammad Azam and comprising Fawad Malik and Zahid Abdullah, made the decision.

The commission has forwarded its decision to the secretaries to the prime minister and privatisation ministry.