Rs83b surge drives circular debt up
The National Assembly was informed on Monday that the circular debt in the power sector increased by Rs83 billion during the fiscal year 2023-24, bringing the total to Rs2,393 billion
According to a written response from the Ministry of Energy, in fiscal year 2022-23, the circular debt of the power sector rose by Rs57 billion, reaching Rs2.31 trillion, whereas in 2021-22, it saw a reduction of Rs27 billion, totaling Rs2.253 trillion. In 2020-21, the circular debt increased by Rs130 billion, reaching Rs2.28 trillion, and in 2019-20, it surged by Rs538 billion to Rs2.15 trillion.
The Independent Power Producers (IPPs) received Rs979.29 billion in capacity payments from July 2023 to June 2024. The documents state that China Power Hub Generation Company received Rs137 billion, Huaneng Shandong Energy collected Rs113 billion, and Port Qasim Electric Power Company collected Rs120.37 billion under capacity payments from consumers.
Additionally, eight coal-powered IPPs received Rs718 billion, eleven gas-powered IPPs received Rs72.63 billion, three hydropower IPPs received Rs106 billion, and eleven furnace oil-powered IPPs received Rs81.6 billion as capacity payments.
Circular debt refers to a situation in which an entity, typically within the energy or utility sector, is unable to pay its obligations to suppliers, who then cannot pay their own creditors, creating a cycle of unpaid debts. This issue often arises in energy sectors, where government-owned companies, private suppliers, and fuel providers are all interconnected financially.
During the NA sitting, Speaker Ayaz Sadiq clarified his interview with a private TV channel, stating that an English newspaper had published his words out of context.
Members raised objections regarding the absence of ministers, and PPP's Nabeel Gabol revealed that an important bill would be introduced in the National Assembly on Friday.
The speaker informed the house that today was a significant day in the Senate, as ministers were present there at the invitation of the Senate chairman. He then adjourned the session for 40 minutes. After the break, former NA speaker Asad Qaiser raised objections regarding the approval process of the 26th Constitutional Amendment, waving photos of PTI members who supported the bill, saying that it was approved due to these "turncoats" and questioning its legitimacy.
PPP's Abdul Qadir Patel countered Asad Qaiser's remarks, asking if those who voted for former Senate chairman Sadiq Sanjrani in the past were not also "turncoats."
During Patel's speech, PTI's Sher Afzal Marwat pointed out a lack of quorum. Upon counting, the quorum was met. However, no agenda items could be discussed in the rest of the sitting, and the deputy speaker adjourned the meeting until today (Tuesday) at 11 am.