Defaulters get continuous power supply

The power distribution companies have failed to cut supply of their potential defaulters, who owe them an enormous sum of Rs98 billion. Instead, these defaulters are getting nonstop power supply.

An executive of the Ministry of Water and Power told that power companies are expected to cut supply of defaulters, which are overdue by two months.

“But the defaulters are getting electricity even after receiving disconnection notices,” he said.

The Ministry of Water and Power has submitted a review to the finance ministry, requesting the release of Rs138 billion to fuel supplier Pakistan State Oil (PSO). According to the Ministry of Water and Power, these funds will guarantee the uninterrupted
oil supply.

The officials have told that many power plants have been closed as PSO has cut back power supply by 30 per cent because of failure to pay the dues.

The official told that, “This amount is part of the Rs160 billion loaned by commercial banks and approved by the Economic Coordination Committee (ECC) on January 20.”

According to the arrangement, power companies are supposed to recuperate cost of this finance by imposing tariffs on final consumers.

A source told Express Tribune that if the above requested loan is sanctioned, power production is expected to grow by 3,000 megawatts. He further added that if the circular debt issue was not taken care of, then the situation would start getting poorer after
just two months, when the climate will get warmer.

“The amount outstanding against running defaulters stood at Rs80 billion in September 2011, which rose to Rs98 billion in December,” the spokesperson for Water and Power Ministry said.

According to the documents submitted with the ECC on January 20, the Central Power Purchasing Agency (CPPA) needed to make a payment of Rs404.44 billion to oil and gas suppliers along with the power distributors. Despite the fact that government compensated
Rs 1.04 trillion in the past few years but the circular debt has continued to grow.

“About Rs30.5 billion is added to the circular debt every month due to power sector’s inefficiency,” the official added.