Meeting called to resolve issue

Government convened a meeting with representatives of power and oil companies to resolve inter-corporate debt issue.

KARACHI: The government has convened a meeting with representatives of power and oil sector companies to resolve the uncontrollable inter-corporate debt issue.

“The deliberations may be held either on Tuesday night or on Wednesday. Officials of oil marketing companies, refineries, power producers and other stakeholders will be present during the discussions,” disclosed a source on Tuesday.

According to reports, inter-corporate debt has crossed Rs300 billion and that has affected a whole chain of organisations, from refineries to oil marketing companies and power producers.

Constrained by a severe lack of finances, refineries are operating much below their capacity while oil marketing companies have been unable to pay the refineries and international oil suppliers.

In May, the government had organised an energy summit in Islamabad to tackle the runaway inter-corporate debt issue, where a string of steps were agreed upon to deal with the problem. However, after a passage of four months, the problem still persists.

Earlier, the government set up a holding company and transferred Rs301 billion of corporate debt to it. It is reportedly paying Rs40 billion annual interest on it.

Published in The Express Tribune, September 15^th, 2010.