Dismissing reports, Power Division says circular debt stands at Rs1,782bn

• The report in certain media sections that circular debt has reached Rs1.9-Rs2 trillion is factually incorrect, said spokesperson of Power Division.

Power Division has dismissed reports that power sector circular debt has reached Rs1.9-Rs2 trillion, terming it ‘factually incorrect.’

In a statement, the power division said that the total circular debt as per definition by December 2019 stood at Rs978 billion, owed to both public & private generators, while liabilities of PHPL payable to banks for loans taken in the past to pay generators stood at Rs804bn, resulting in total liabilities of Rs1,782bn.

“The report in certain media sections that circular debt has reached Rs1.9-Rs2 trillion is factually incorrect,” said spokesperson of Power Division.

The spokesperson while commenting on current status of power sector circular debt, total liabilities and receivables said that circular debt at the beginning of September 2018 when the current PTI government took office, was Rs1.33 trillion, and was increasing at a rate of Rs38bn a month.

“With the measures taken by the govt, encapsulated in the Circular Debt Capping Plan, the Power Sector has considerably reduced the rate of increase to approximately Rs. 12-15 billion per month,” the statement reads.

The spokesperson said that various measures including tariff rationalization, recovery drives, anti-theft campaign and system modernization were initiated. Due to these measures, the addition to circular debt is expected to be reduced to Rs130billion in 2019-2020 compared to the target of Rs130bn in the circular debt capping plan.

For the first time in the history of power sector, the sector has mobilised totally to fight against loss theft and corruption. This is not a weekly campaign but has been sustained for more than a year. The spokesperson expressed optimism to achieve the targets given in the Circular Debt Capping Plan.