Print Print 2023-02-02

IMF team ‘quizzes’ PD’s top brass

  • International Monetary Fund Mission raises questions on the performance of power sector and violation of commitments made in the previous review
Published February 2, 2023

ISLAMABAD: The International Monetary Fund (IMF) Mission has reportedly quizzed top brass of the Power Division for consecutive two days on failing to meet commitments including increase in tariff, poor performance of the sector and restricting subsidies only to vulnerable domestic consumers, well-informed sources told Business Recorder.

The Power Division, comprising Secretary Rashid Mahmood Langrial, Additional Secretaries, Joint Secretary (Power Finance) and other concerned officials held meetings with IMF team in a local hotel, where the visiting Fund team raised questions on the performance of power sector and violation of commitments made in the previous review, saying why promises are made when there is no capacity to meet them, sources added.

The main concern of the Fund was the increase in circular debt, which is now hovering around Rs 2.55 trillion, as the authorities have failed to contain it due to poor performance with regard to reduction in losses (T&D), improvement in recovery and attracting private sector to run Discos, the sources continued.

Dar meets IMF review mission, apprises it of planned power sector reforms

The government is expecting over Rs 900 billion addition to the existing stock of circular debt, raising the stock to over Rs 3.3 trillion because of its failure to recover outstanding receivables of over Rs 1 trillion from private and public sector. Non-implementation on third phase of subsidy reduction also came under discussion. Power Division has already implemented it in two phases.

The sources said, the IMF is insisting on increase in tariff by at least Rs 5 per unit, reduction in subsidy available to domestic consumers except lifeline consumers and withdrawal of subsidy to the five export-oriented sectors announced on 6 October by Finance Minister Ishaq Dar.

According to official documents Pakistani authorities had assured IMF that recovery will be around 94 percent, but in fact it remained less than 90 percent. Transmission and Distribution losses were higher than 17 percent against the commitment of 15.83 percent.

Electricity demand remained depressed at 44 billion units during first quarter of current fiscal year (FY22 at 44.4 percent) whereas the IMF had been given the understanding of 45 billion units.

The authorities have also been quizzed for extending subsidy of Rs 281 billion to K-Electric sans budget allocation, which is increasing circular debt stock.

The IMF has been given assurance that exchange rate would remain around Rs 232/$ which is still on higher side.

Copyright Business Recorder, 2023

Comments

Comments are closed.

Zubair Feb 02, 2023 08:05am
Quiz? Why? They already know everything? Colonial solutions will not work for masses of developing countries!
thumb_up Recommended (0)
Hilarious Feb 02, 2023 09:24am
@Zubair, why do people in this country speak like the world owes them something? We’ve been to them 22 times, we’ve been “independent” for over 75 years now. How about taking on some responsibility for the mess that exists? It’s not because of them, it because of the government and the people of the country. What they don’t know is why Pakistan is a complacent liar, why make promises with no intent to honor them? The reality of Pakistan is that even in the 75 years it has existed people still don’t know how to follow basic traffic rules (let alone anything else) every one in the country feels laws don’t apply to them, that’s they’re better than that, but they love the country all the while paying 0 taxes and evading them, which is a illogical loop.
thumb_up Recommended (0)
Nathan Feb 02, 2023 09:50am
Hope IMF team has the wisdom and will to see through the "fake and con" nature of present government team- they are wanted men and not elected and lack credibility. Since the fiscal year ends soon, it would be wise for IMF to negotiate with an elected government for the success of its program and recommendations! P.S: Hope IMF understands the ground realities of struggling masses of developing countries and does not impose economic models & recommendations devised in developed countries which have led to failures in the past!
thumb_up Recommended (0)
MASOOD RAZA Feb 02, 2023 10:51am
Subsidies be withdrawn from rent seeking export centre ... parking their dollars outside for speculative profts...
thumb_up Recommended (0)
Saif Feb 02, 2023 12:12pm
Kindly use some funds from IMF on providing solar system for agriculture to small land owners in lasbela district, especially in and around winder area, to boost production. It will help to reduce inflation on food products
thumb_up Recommended (0)
Muhammad Ali Feb 02, 2023 12:30pm
Power sector circular debt is due to anti Pakistan IPPs policy adopted by Nawaz & later massive corruption in building those IPPs. Very weak economy of Pakistan could never bear the burden of wrong policies adopted from 1980s & onward. No exit except recovery from those who are responsible for mess created during 1980 till today.
thumb_up Recommended (0)
MR. NASIR GULZAR Feb 02, 2023 04:09pm
seems good omen as now there is someone who is grilling the people at the helm of the affairs otherwise they pretend them as the lord Non accountable to any body
thumb_up Recommended (0)
bonce richard Feb 02, 2023 05:04pm
@Hilarious, Our army and establishments peoples never like that country develops, and they are not sincere for the peoples. Corruption is in their blood every retired general and Prime Minister has property abroad. They only think for themselves there is no freedom to speak against them. Since 1947 we have dictatorship and nothing. We depend on the donation of zakat and fitra although the land of our country is very fertile and a lot of water and natural resources are given by God.
thumb_up Recommended (0)
KhanRA Feb 04, 2023 12:51pm
@Zubair, don’t use nationalism to deflect from the fact that Pakistan’s politicians, and the gullible masses who vote for them, are the root cause. IMF is just shining a mirror to unsustainable economic policies in Pakistan. Is it colonial of them to ask why are don’t pay taxes? Or why we subsidize petroleum for the elites, and give the poor no public transport? Will you also blame IMF for pointing out the obvious fact that PIA is a massive waste of government money? Or that nationalized electric companies have no incentive to reduce losses?
thumb_up Recommended (0)