Power sector: secretary explains non-cash adjustment of circular debt

Non-cash adjustment of Rs 138 billion circular debt refers to settlement of energy sub-sectoral dues to each other, Secretary Finance Dr Waqar Masood clarified. Talking to Business Recorder, Dr Masood said that part of the outstanding dues to WAPDA by government ministries/departments were settled through non-cash adjustments.
Another official, requested anonymity, revealed that loans procured by the federal government from external sources for Wapda that have yet to be cleared by Wapda though they have been cleared by the government, have also been adjusted to the tune of Rs 90 billion; while similar loans by NTDC/GENCOs to the tune of Rs 25 billion to the government have also been adjusted. Ministry of Water and Power shared details of circular debt settlement with Senate Standing Committee on Finance and maintained that while settling pending circular debt a Rs 138 billion non-cash adjustment was also made.
The committee was informed that of the total Rs 480 billion settlement of circular debt, Rs 341 billion was cash payment and Rs 138.151 billion was non-cash adjustment. Cash adjustment was Rs 270 billion to the Independent Power Producers (IPPs) and Rs 71.6 billion to Sui Northern Gas Pipeline Limited (SNGPL), Sui Southern Gas Pipeline Limited (SSGC), Mari Gas as well as Pakistan Petroleum Limited (PPL) and Pakistan State Oil. Non-cash adjustment was made between government entities and Wapda, NTDC/Gencos/Chashma and power producers.