KARACHI - Karachi Electric Supply Company has demanded that an immediate adjustment mechanism should be enforced to put an end to its circular debt. The Provincial and Federal Government owe KESC Rs76 billion, which can easily be used to adjust the amount payable by KESC to SSGC and NTDC, since it being a lot less than what the GoP owes to the utility.According to the statement, the government although might be in principle agreement to make these adjustments to end the confusion but had not yet taken any concrete steps or action. The delay in these settlements is not only creating cash flow issues but is also unfortunately leading to its functionaries’ and state owned entities to project a wrong impression of KESC’s payables in the media, which are not only quite misguiding and harmful but are also defamatory reference to the power company’s credibility. KESC said that fiscal statistics/payables by KESC are incorrectly overstated and inflated when projected at various levels including media, NEPRA hearings and in the country’s top elected bodies. By virtue of the Power Purchase Agreement, the Government had already accepted to adjust KESC’s payables to NTDC, against the Tariff Differential Claim payable by the Government to KESC, where the receivables by KESC are higher than its payables. KESC has also offered and demanded a number of times that the Ministry of Finance should directly pay SSGC, the Rs. 18 Billion owed by the Karachi Water & Sewerage Board (KWSB). This being the easiest route to ease partly the circular debt pressure, since SSGC & KWSB are both state owned entities. However, for some unknown and strange reasons, further puzzlement was opted by delaying this action unnecessarily and this fact had also not been mentioned from the Government side while mentioning KESC’s payables but only a one-sided picture was presented to public that was causing further misunderstanding and a negative impact. Hence making it a baseless and unfounded notion to suggest that the State-run gas and electricity companies were facing a financial crunch due to KESC; making it a factually incorrect statement.KESC said that the total amount payable by KESC to SSGC was Rs28 billion and not Rs39 or 41 billion, as being claimed and grossly overstated by the SSGC. Since September 2008, KESC had paid an accumulated amount of Rs. 96 Billion to SSGC against gas purchases.On the other hand, during the past four years, KESC had paid a total amount of Rs142 billion to NTDC against purchase of electricity worth Rs.131 billion. KESC’s current payable to NTDC was Rs.39 Billion, while Rs46 Billion had to be received by KESC from Ministry of Finance on account of Tariff Differential. Under the Power Purchase agreement, NTDC was supposed to be directly paid by the Ministry of Finance on behalf of KESC.KESC expressed hope that reflection of true payable and receivable amounts and an early adjustment of all these amounts against each other would certainly dispel the myth and also help in deflating the ever ballooning circular debt bubble. What is also required is for the Government departments and State-run entities exhibit responsibility and to refrain from incorrect sensationalism and take real action to clarify the fiscal anomaly.