ISLAMABAD - The government had to face tough questions from the main opposition party, Pakistan People’s Party, in the Senate ON Wednesday when it was asked about the sources of generation of Rs 500 billion to clear the circular debt.

The questions were raised from the opposition benches during the question hour session and the entire time of the session got consumed for the answer of the single question on the issue raised by Senator Sughra Imam. The opposition benches also sought details of the names of board of directors of those companies whom payments were made to clear the circular debt.

Senator Sughra Imam had raised a question to Finance Minister Ishaq Dar asking the government about the sources of generation of Rs 500 billion for the payment of circular debt. At last, the question was deferred due to the absence of Dar.

State Minister for Commerce, Textile and Privatization Khurram Dastagir on behalf of the finance minister informed the House that all the payments related to the government expenditure were made through the Federal Consolidated Fund. Specific funds were available in the fund.

However, Senator Sughra Imam was not ready to accept the answer and questioned from where Rs 342 billion was generated to pay the companies to clear circular debt as no such big amount was available in the fiscal 2013-2014. She asked as to how such big amount was generated within three or four weeks and said the details should be made public. Senator Saeed Ghani suspected that perhaps Rs 122 billion lying with the finance ministry for the welfare of labourers were consumed to clear the circular debt.

Senator Farhatullah Babar said that no third party audit had been carried out in the whole process and payments had been made to the IPPs as demanded and settled by the finance ministry. It was of critical importance to carry out audit of the fuel supplied, the power produced in relation to the fuel supplied and plant utilization capacity of each power plant before accepting their claims he said.

The state minister replied that finance ministry should give a complete answer about the third party independent audit for which the senator might ask a fresh question. He also clarified that Ministry of Finance had made payment after verification by Pepco of the claims of IPPs but no third party audit had been carried out.

Leader of the House Raja Zafarul Haq said that the matter was not complex in the nature while Sughra Imam said that the matter should be referred to the Senate Standing Committee on Finance. Raja Zafar said that the details would be provided to the House about the names of the board of directors of those IPPs (independent power producers) whom payments were made.

Earlier, Finance Minister Senator Ishaq Dar in his written reply informed the Senate that all payments relating to government expenditure were made through the Federal Consolidated Fund that consisted of revenue receipts, loans and recovery of loans. No specific revenue receipt or loan can be linked for any specific payment, he said. He further said that for payment of power sector circular debt, three kinds of transactions were carried out, issuance of five years Pakistan Investment Bonds, deduction at source against government receipts or recovery of loans and cash payment out of the federal consolidated fund.

He further said no specific borrowing from banks was made for this purpose.