Circular debt markup includes in consumers bills as surcharges

Islamabad Politics Report/Moazzam Raza Tabassam: The Senate Special Committee on Circular Debt held a meeting on Tuesday to discuss the situation that has been caused due to increasing Circular Debt and scope of the alternative and renewable energy sector.

Convened by Senator Shibli Faraz; the meeting was attended by Senator Bahramand Khan Tangi, Senator Dr. Sikandar Ali Mandhro and senior officers of the Ministry of Finance, Power Division, NEPRA, QESCO , KAPCO. Representatives of energy companies operating in the private sector as well as from the alternative and renewable energy sector attended the meeting as well.

The Committee was briefed by Senior JS Finance Division that Circular Debt of PKR 514 billion had accumulated until December 2017. He further informed the Committee that 290 billion was for the Energy Sector, 105 billion was capacity charge and the rest were miscellaneous charges. The markup, he revealed, had been adjusted in consumer tariff which is billed as surcharge to the consumer.  Convenor Committee, Senator Faraz showed displeasure about the fact that the consumer was being burdened.   He also enquired about whether any checks and balances were in place while approving funds. 

Senior JS Finance while responding to this question said that the Ministry of Finance oversees the matter and approvals are made only after reviewing all details. 

The Committee was briefed that in the past year PKR 118 billion were provided for subsidy on electricity.  Currently a subsidy of PKR 150 billion will be provided for electricity consumers that consume 100 to 300 units. 

CEO QESCO Balochistan, briefed the Committee and revealed that 1000 megawatts of electricity is being supplied to Balochistan against a requirement of 1800 megawatts.  He further stated that the main reason for an increase in circular debt was that agriculturists fail to pay a fixed bill amount of PKR 10,000, which was PKR 4000 previously.  He also informed the Committee that the total ceiling was PKR 75000 out of which 60 percent was paid by the Provincial Government and 40 percent was paid by the Federal Government. 

While discussing the issue of subsidies, Convenor Committee, Senator Faraz directed that subsidy should be provided to small farmers and a system should be put in place to facilitate them. 

While discussing the plight of the Alternative Energy Renewable Sector as well as energy related private sector companies, Convener Committee Senator Faraz showed displeasure that despite issues in the power sector these entities are not being encouraged or facilitated.  He directed that in order to deal with the energy crisis in the country it was imperative that alternative energy sources may be promoted.  He further directed that a 20 year plan may be submitted to the Committee with details of demand and supply. 

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