The debt has started piling up again due to delay in power tariff increase. PHOTO: FILE
With voices growing against the lack of relief in load-shedding despite clearing of circular debt, the federal government on Tuesday released details of Rs480.1 billion in payments to IPPs and state-owned entities in a bid to address transparency concerns.
The government took the decision after Pakistan Peoples Party (PPP) alleged misappropriation in circular debt payments. The move follows the government’s own decision to order an audit of the transactions.
According to the finance ministry, it undertook an exercise to clear Rs503.1 billion in circular debt by May 31. Out of the total circular debt, the ministry paid Rs480.1 billion in cash, bonds and book adjustments, while Rs22.9 billion withheld on account of liquidated damages owed by IPPs to the government.
Circular debt has remained one of the key bottlenecks in improving electricity production in the country. The ministry had sought to clear the circular debt in an attempt to decrease crippling load shedding. However, despite the Rs480.1 billion in adjustments, the circular debt has started piling up again due to delay in power tariff increase and controlling electricity theft.
According to finance ministry officials, the details of the adjustments reveal that of the Rs480.1 billion, an amount of Rs341.9 billion was the cash transaction, including bonds, while Rs138.2 billion was in book adjustments, described as non-cash transaction. A total of Rs161.3 billion were paid in cash to IPPs, Rs56.3 billion in Pakistan Investment Bonds (PIB) to Oil and Gas Development Corporation (OGDC), Rs23.4 billion in PIBs to Pakistan Petroleum Limited (PPL) and Rs81.3 billion to Pakistan State Oil (PSO) in cash and PIBs.
Under non cash adjustments, the government settled Rs90.1 billion in dues of Wapda on account of hydel generation, Rs10.3 billion of National Transmission and Dispatch Company (NTDC), Rs14.9 billion of power generation companies and Rs22.9 billion of the nuclear power plants.
Details of gross payments to IPPs reveal that while Rs161.3 billion were paid in cash, the total amount settled against IPPs was Rs270.3 billion, with the rest against government entities, according to the ministry of finance. The government paid Rs75 billion to Hub power plant, Rs41.4 billion to Kapco, Rs7 billion to AES Pakgen, Rs 4.6 billion to AES Lalpir, Rs3.5 billion to KEL power plant, Rs9.9 billion to Liberty plant, Rs19.3 billion to Uch plant, Rs8.7 billion to Rousch power plant, Rs5.1 billion to Fauji plant, Rs2.5 billion to Habibullah plant, Rs270 million to Altern plant, Rs19.4 billon to AGL power, Rs17.4 billion to the Hubco Narowal plant, Rs5.4 billion to Atlas plant, Rs7.1 billion to Nishat power, Rs6.9 billion to Nishat Chunian power plant, Rs6.8 billion to Liberty Tech plant, Rs1.3 billion to Orient Plant, Rs4.9 billion to Saif power plant, Rs4.2 billion to Sapphire electric plant, Rs2.5 billion to Halmore plant, Rs8.9 billion to Engro plant, Rs7.1 billion to Foundation plant, Rs1.2 billion to Shydo power and Rs105 million to Lariab plant. In addition to that Rs19 billion were paid to SNGPL, Rs3.5 billion to SSGC, Rs 9.3 billion to Mari Gas, Rs13.8 billion to PPL and Rs19.8 billion to PSO.
While the finance ministry has made payments on the basis of certified accounts provided by the ministry of water and power, sources revealed that overpayments had been made to some IPPs on account of fake oil supplies and fake electricity generation.
Published in The Express Tribune, July 24th, 2013.
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