March 08, 2017
President Pakistan Businessmen and Intellectuals Forum (PBIF), President AKIA, Senior Vice Chairman of the Businessmen Panel of FPCCI and former Provincial Minister Mian Zahid Hussain on Wednesday asked the government to settle circular debt which has become a threat to the economy.
Power sector continue to improve while power companies have started generating profits but the sector is still far from self-sustaining, he said.
Mian Zahid Hussain said that according to the official figures, that circular debt has surpassed Rs 370 billion while power producers have to pay 228 billion rupees to PSO.
Total PSO receivables have crossed the limit of Rs 280 billion pushing the company into severe problems, he added.
The business leader said that government should clear the dues of private power producers otherwise they will not be able to clear PSO dues resulting in a crisis that will not only hurt economy but also send a negative signal to the investors.
Last year government earmarked Rs 137.6 billion for power sector subsidy but additional Rs 60 billion were spent. This year Rs 95.4 billion have been allocated which has been consumed.
Power sector losses including theft stands at Rs 200 billion per annum but nothing has been allocated for it in the last two budgets which is amazing.
The President PBIF noted that ratio of recovery has improved from 88 percent to 93 percent, transmission and distribution losses have come down from 19 percent to 17.8 percent and power generation companies are reporting profit which is good but the power sector is not self-sufficing therefore government should intervene.