The government’s drive against power theft and for recoveries of the electricity dues have started yielding positive results, as it has helped to reduce the mounting circular debt by Rs 52 billion in a few months.
The PML-N government had initiated drive against power theft to recover the outstanding dues from public as well as private consumers. The latest Finance Ministry’s document ‘Rejoinder to PTI’s White Paper’ has revealed, “The circular debt build up has been curtailed by the government by improving recoveries to 89.1%, bringing down line losses to 18.6%, at source deduction by budget adjustor office and improving monitoring of feeders”.
The document showed that mounting circular debt has been brought down to Rs 244 billion from the level of Rs 296 billion. The circular debt had reemerged after once government cleared it at Rs 480 billion after coming into power in 2013. However, the debt had once again started increasing mainly due to the poor revenue collection and higher power line losses. The circular debt had reached to the level of Rs 296 billion.
“The government has successfully managed to bring the losses down. The losses have been reduced from 19% to 18.6% in one year. Recovery of power sector has increased from 87.2% to 89.1%”, stated the Finance Ministry’s document.
Finance Minister Senator Ishaq Dar a few days refused to clear the circular debt, as he made it clear that debt would be eliminated with the improved power recoveries, which crossed the level of Rs 500 billion. The total receivables currently stand at Rs 513 billion.  “This will not be a prudent decision that Finance Ministry clears the circular debt, as it is an issue of power the dues recoveries which should be collected”, said Ishaq Dar while addressing a press conference last week. The power dues of the National Transmission and Despatch Company (NTDC) have reached Rs 500 billion, which should be collected from the consumers including private and public sector departments, he added.
According to another Finance Ministry’s documents, the break-up of circular debt of when it touched the level of Rs 270 billion revealed that carry forward of previous year 2012-13 was Rs 81 billion, non-recovery of DISCOs are Rs 79 billion, non-payment of KESC is Rs 11 billion, subsidies due from government are Rs 48 billion, mark-up liability is Rs 44 billion and others are Rs 7 billion.
It is worth mentioning here that PML-N government had cleared the circular debt within 45 days after coming into power on June 5, 2013. The government had completed settlement of power sector circular debt in two phases. In the first phase Rs.342 billion was settled on 28th June 2013. In the second phase, a non-cash settlement of Rs.138 billion was completed on 21st July 2013.