AGL 5.51 Increased By ▲ 0.11 (2.04%)
ANL 8.49 Decreased By ▼ -0.30 (-3.41%)
AVN 75.73 Decreased By ▼ -0.43 (-0.56%)
BOP 5.21 Increased By ▲ 0.04 (0.77%)
CNERGY 4.42 Decreased By ▼ -0.06 (-1.34%)
EFERT 81.53 Increased By ▲ 0.43 (0.53%)
EPCL 49.54 Increased By ▲ 0.54 (1.1%)
FCCL 12.68 Decreased By ▼ -0.02 (-0.16%)
FFL 5.52 Decreased By ▼ -0.07 (-1.25%)
FLYNG 6.74 Decreased By ▼ -0.24 (-3.44%)
FNEL 4.64 Increased By ▲ 0.01 (0.22%)
GGGL 8.45 Decreased By ▼ -0.14 (-1.63%)
GGL 13.85 Decreased By ▼ -0.21 (-1.49%)
HUMNL 6.03 Increased By ▲ 0.53 (9.64%)
KEL 2.56 Decreased By ▼ -0.04 (-1.54%)
LOTCHEM 27.62 Decreased By ▼ -0.09 (-0.32%)
MLCF 23.75 Increased By ▲ 0.07 (0.3%)
OGDC 71.22 Decreased By ▼ -0.23 (-0.32%)
PAEL 15.16 Decreased By ▼ -0.04 (-0.26%)
PIBTL 4.87 Decreased By ▼ -0.04 (-0.81%)
PRL 15.86 Increased By ▲ 0.06 (0.38%)
SILK 1.09 Increased By ▲ 0.04 (3.81%)
TELE 8.84 Decreased By ▼ -0.15 (-1.67%)
TPL 7.08 Decreased By ▼ -0.08 (-1.12%)
TPLP 19.20 Decreased By ▼ -0.02 (-0.1%)
TREET 20.87 Decreased By ▼ -0.27 (-1.28%)
TRG 136.73 Decreased By ▼ -0.02 (-0.01%)
UNITY 16.54 Decreased By ▼ -0.26 (-1.55%)
WAVES 9.16 Increased By ▲ 0.06 (0.66%)
WTL 1.34 Decreased By ▼ -0.03 (-2.19%)
BR100 4,158 Decreased By -27.7 (-0.66%)
BR30 15,339 Decreased By -127.2 (-0.82%)
KSE100 41,652 Decreased By -167.7 (-0.4%)
KSE30 15,380 Decreased By -68.1 (-0.44%)
Follow us

ISLAMABAD: The country’s power sector’s circular debt is reportedly touching Rs 2.6 trillion mark at present against Rs 2.252 trillion on June 30, 2022, posting a growth of Rs 303 billion in just the first four months of FY 2022-23, well informed sources told Business Recorder.

The main reason for the average monthly growth of Rs 75.75 billion in circular debt is the increase in base tariff, FCAs, and QTAs, less recovery by power Distribution Companies (Discos) especially in South Punjab, interior Sindh, Balochistan, some parts of KP and spillover of FCAs, the sources added.

The volume of circular debt, as per its definition was Rs 1.730 trillion but after addition of Rs 825 billion loans on the books of Power Holding Private Limited (PHPL) taken on behalf of Discos, total amount of circular debt stood at Rs 2.555 trillion.

KE’s payables are another main reason for a substantial growth in the circular debt.

According to sources, the incumbent government has already paid about Rs 200 billion to the power sector companies in recent months to minimise the level of circular debt, but it is still showing an abnormal growth.

Rs500bn addition to circular debt: Power Division holds Nepra responsible

The sources further stated that circular debt grew by Rs 185 billion during the first quarter of FY 2022-23 as compared to Rs 99 billion during the corresponding period of FY 2021-22. The total growth in circular debt was Rs 284 billion during the first four months of current fiscal year, excluding PHPL.

Another factor in the rise in the volume of circular debt is massive outstanding receivables of power Distribution Companies, despite recovery targets of over 100 per cent.

According to National Electric Power Regulatory Authority (Nepra), receivables of the DISCOs is one of the major issues highlighted by the regulator in the State of Industry Report (SIRs), determinations, etc., for the past several years. During FY 2020-21, the receivable amount of DISCOs including KE was around Rs. 1.398 trillion, whereas during the FY 2021-22 the receivable amount was Rs. 1.6804 trillion, showing an increase of Rs. 282.2 billion.

During FY 2021-22, the allowed T&D losses for the DISCOs were 13.41% whereas actual losses were 17.13%. Due to the difference of 3.72%, the financial loss on this account has been worked out at around Rs. 113 billion. In addition, Nepra determines the revenue requirement on 100% receivables.

During FY 2021-22 the receivable amount in terms of percentage was around 90.51% thus incurring the loss of Rs. 230 billion of the billed amounts. The overall impact on account of additional T&D losses and less recovery works out at Rs. 343 billion which contributes to the accumulation of circular debt.

The sources said that Power Division has revised its Circular Debt Management Plan (CDMP) in light of effects of floods on the economy including GDP growth estimates.

Copyright Business Recorder, 2022

Comments

Comments are closed.

Waheed ud din Nov 03, 2022 12:47pm
Why dont political leadership of govt. And PTI join hands to bring down system losses to minimum.
thumb_up Recommended (0)
Muhammed Nov 03, 2022 02:01pm
Miserably low investment inT& D system & rampant corruption prevailing in DISCOS are the main causes of mounting losses.
thumb_up Recommended (0)
Zee Nov 03, 2022 09:15pm
I dont know why are they still funding the tax money to these miserable companies, govt should sold them out asap. Get rid of these. This is insane getting bills and tax from people and then spend those tax on the miserable companies.
thumb_up Recommended (0)

Power sector: Circular debt touching Rs2.6trn mark

Pakistan seeking $4.2bn from Saudi Arabia: reports

Will take action if terrorists regroup in Afghanistan: US State Department

Arshad Sharif killing: SC directs JIT to submit progress report every two weeks

Saudi lays on lavish welcome as China's Xi heralds 'new era' in relations

IHC bars FIA from arresting Suleman Shehbaz upon return from UK

Rupee continues to depreciate, settles at 224.37 against US dollar

Roshan Digital Account: monthly inflow lowest since Dec 2020, clocks in at $141mn in Nov

Saif-ur-Rehman appointed Karachi administrator

Another audio, purportedly of Bushra Bibi discussing ‘sale of watches’, surfaces

Modi’s party set for landslide election win in India’s Gujarat state