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Print Print 2023-12-06

Anti-electricity theft, recovery drive a flop?

  • Pakistan’s power sector circular debt stock crosses Rs 2.6 trillion
Published December 6, 2023

ISLAMABAD: Pakistan’s power sector circular debt stock crossed Rs 2.6 trillion by October 31, 2023, showing 13 percent or Rs 75.25 billion per month growth in its flow as anti-theft and recovery drive failed to give results as per expectations.

According to sources, circular debt stock touched Rs 2.310 trillion at the end of FY 2022-23, which has now reached Rs 2.611 trillion during July-October 2023-24 with a growth of Rs 301 billion against growth of Rs 249 billion in same period of 2022-23.

Payables to power producers have reached Rs 1.750 trillion during four months of CFY from Rs 1.434 trillion at the end of FY 2022-23, showing an addition of Rs316 billion. The stock of payables to IPPs was Rs 1.750 trillion during July-October 2023-24.

Power sector woes: caretaker PM Kakar orders immediate action against electricity theft

However, Gencos’ payables to fuel suppliers have declined to Rs96 billion from Rs 111 billion in FY 2022-23 and posted Rs 5 billion growth during July-October 2023-24 from Rs 91 billion in the comparable period of 2022-23. No change was witnessed in Rs 765 billion parked in Power Holding Limited (PHL). PHL parked amount was Rs 793 billion during the same period of 2022-23.

Key reasons for the substantial growth in flow of circular debt are issues of K-Electric (KE), AJ&K, release of subsidies, delay in implementation of QTA adjustments, higher interest payments, rupee dollar parity etc.

The sources said, Rs 389 billion is receivable from KE as on October 2023 - pending due to subsidy dispute between the power utility company and the federal government.

According to sources, the amount of budgeted but unreleased subsidies was recorded at Rs 8 billion during the first four months of current fiscal year against Rs54 billion in the comparable period of 2022-23.

IPPs interest charges on delayed payments of PHL and IPPs recorded at Rs 45 billion in four months of current fiscal year against Rs 54 billion in the same period of 2022-23.The amount of IPPs interest charges on delayed payments was Rs 143 billion during the entire fiscal year 2022-23.

Pending generation cost (QTAs + FCAs) stood at Rs 110 billion against Rs 103 billion during the same period of 2022-23 and Rs 250 billion in FY 2022-23.

Non-payment by K-Electric reached Rs 43 billion in July-October 2023-24 against Rs65 billion during the same period of FY 2022-23.

The sources said Discos’ losses, inefficiency stood at Rs 77 billion during July-October 2023-24 as compared to Rs 65 billion in the same period of 2022-23, showing addition of Rs 16 billion in total circular debt stock.

Discos’ under recoveries reached Rs 165 billion during first four months of 2023-24 as compared to Rs 61 billion during corresponding period of 2022-23; however, their cumulative under recoveries stood at Rs 236 billion as of June 30, 2023. Other adjustments (prior year recovery, etc.) were Rs147 billion during July-October, 2023-24 against Rs 254 billion in July-October 2022-23.

Sharing details on payment through fiscal space, the sources said, in CY 2022-23 PHL principal repayment were negative Rs 35 billion whereas stock payments stood at negative Rs 127 billion totaling to negative Rs 162 billion.

The sources further stated that payables to power producers increased by Rs 5 billion due to withdrawals by FBR in April 2023.

Officials argue that the main reason for the increase in circular debt was slow submission of claims of FCA and QTAs to the Finance Ministry, adding that the current financial year will close at zero growth in flow of circular debt.

Copyright Business Recorder, 2023

Comments

Comments are closed.

KU Dec 06, 2023 10:40am
It's not a flop it was a sham in the first place for public consumption. The demon of corruption is in the veins of our public service and there seems to be no way of getting rid of it or stopping it. And we are made to believe that SIFC and its promises for investment will bring Pakistan out of its misery. Cruel joke it is.
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Mustafa Dec 06, 2023 11:15am
If Muslims of this country are CHOR ... What can anyone do ?
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Khan Dec 06, 2023 11:37am
It was logical that such drives would fail. Why ? because in the whole chain of command everyone is corrupt. From the CEO to the meter reader.
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AJ Dec 06, 2023 12:35pm
@Khan, we need structural reforms. Not everyone is corrupt.
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saif Dec 06, 2023 01:04pm
janab jo govermnt ky mehkmy hain un se aur jo bary bary business man aur jageerdar hain un se wasoolian karain na kis ne rooka ha bas har month humary se hi fuel adjustmnt k naam pr wasooli karni ha kay
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Zahid Ali khan Dec 06, 2023 01:09pm
In other countries they have to catch 5%thief's here 95% thief's not possible here in Pakistan
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Ubaidullah Yousfani Dec 06, 2023 01:50pm
This is the ultimate fate for such a farce drive and is clearly written on the wall simply because of the fact that the very officials of the power companies are conniving this theft.
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Builder Dec 06, 2023 01:58pm
The more pressing issue is contracts with IPP who need payments even if they are not supplying to grid. Until this is resolved, don't expect the debt to go down.
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[email protected] Dec 06, 2023 02:54pm
Yes 100% it is a false or flop operation becoz the Big fish have not been caught.The data of the theft vs theft caught should be presented to nation. The IPP drama still exists like a Ginee need to find a way to relief consumer. Allow more solar energy usage to consumers and all your power system will crash like PTCL as what cell phone technology did it to them
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zaya zaya Dec 06, 2023 05:46pm
No surprises, why would they punish their own...
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Zubair Dec 06, 2023 06:14pm
Wapda supply lines are 60 years old.. secondly the Discos are currupt and there is dummy meter concept they will install two meter one ia real one is dummy if you pay tem Rs 10k per month
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Aam Aadmi Dec 13, 2023 06:11am
Another day has passed. Another piece of bad news.
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