ISLAMABAD: The Federal Minister for Planning, Development, and Special Initiatives, Asad Umar Tuesday said the circular debt build up for the period of July-April this fiscal year has been reduced by Rs189 billion (42 percent) as compared to the previous year.
The minister said that Pakistan’s circular debt build up during July-April this fiscal year was recorded at Rs260 billion against Rs449 billion reported in the same period last year, witnessing a significant decline of Rs189 billion.
“Circular debt build up July-April this fiscal year is 260 billion vs 449 billion same period last year, a reduction of 189 billion. The full year circular debt build up this year is expected to be more than 100 billion LESS than the circular debt build in pml-n last year of govt!,” the minister said in a series of Twitter posts, on Tuesday.
"The full year circular debt build up this year is expected to be more than 100 billion less than the circular debt build in Pakistan Muslim League-Nawaz (PML-N) last year of government," he added. Umar further stated that the "huge improvement" in the circular debt build up as compared to the last year of the Pakistan Muslim League-Nawaz (PML-N) government was "achieved despite massive increase in capacity payments caused by decisions committed by PML-N govt. PMIK govt. improving performance and clearing mess inherited from PMLN in every sector."
"This improvement in energy sector performance and slow down in build up of circular debt has been the result of sustained hard work, analytical data based decision making and willingness to break the nexus between decision makers and powerful elite," he maintained.
Earlier, this month, it was reported that the China-Pakistan Economic Corridor (CPEC) power projects were also hit by the circular debt and that the government has not been able to clear Rs188 billion due payments in breach of a bilateral energy framework agreement.
Although the outstanding payments are only 18.4 percent of the billed amount, it has started affecting the financing models of the Chinese sponsors of the Independent Power Producers (IPPs), set up under the CPEC agreement. It is also reported that Pakistan had so far paid Rs832 billion on account of power purchase price to the Chinese IPPs. The Central Power Purchase Agency Guaranteed (CPPA-G) could not clear Rs188 billion worth dues.
Copyright Business Recorder, 2021