(March 08-2023)
Chairman of National Business Group Pakistan, President Pakistan Businessmen and Intellectuals Forum, and All Karachi Industrial Alliance, and former provincial minister Mian Zahid Hussain on Wednesday said it is impossible to achieve a satisfactory growth rate in the presence of circular debt and failed state-run companies.
Circulating debt has increased over Rs2.6 trillion while the losses of failed state-owned companies have reached Rs1879 billion rupees which have made it necessary to get rid of them, he said.
Mian Zahid Hussain said that these companies are siphoning off foreign debt and taxpayers’ money for decades.
Talking to the business community, the veteran business leader said that the IMF’s emphasis on reforms in the energy sector is welcome but insufficient.
Instead of continuously increasing the price of electricity, the price of electricity can be reduced by 3 rupees per unit by controlling theft, eliminating line losses, and improving bill collection.
He said that the K-Electric team has reduced losses by 50%. Now this institution is investing 484 billion rupees till 2030 to get 30% of electricity from renewable sources. If K-Electric can reduce its losses and improve quality, why can’t other power companies reduce their losses, he questioned.
The business leader noted that the current framework of almost all power sector companies discourages efficiency and load shedding continues despite excess generation.
The performance of state-owned distribution companies is weak, they have failed to meet targets related to power transmission and distribution losses, recovery of bills, investment, and public safety.
According to a report, on their poor performance from 2016 to 2020, the national treasury suffered a total loss of 13 trillion 55 billion rupees, while every day five to six thousand megawatts of electricity is stolen or wasted.
The main reason for the failures is the delay in privatization and continuous bailouts by the government which hinder the system improvement.
In order to eliminate the circular debt, there is a need to generate more electricity from Thar coal, which will reduce the import bill by billions of dollars while also providing employment to the people.
Admirable work is being done in this regard and it needs to be accelerated while encouraging local and foreign investors is the need of the hour.
Mian Zahid Hussain said that many efforts have been made in the past decades to revive the failed government companies, which have not yielded any results, so further efforts will prove to be a waste of time and capital, the only solution to this problem is the privatization of these companies.
