ISLAMABAD: The new government will be facing the challenge of making the power sector economically viable by dealing with circular debt, improving transmission and distribution system and changing fuel mix for generating the electricity at affordable price.

Sources in the Finance Ministry stated that elements which contributed to buildup of circular debt by end-June 2018 were: 18.3 percent losses against the target of 16.3 percent with financial impact of Rs 187.1 billion; (ii) 90.07 percent recovery of billed amount against the target of 100 percent, having financial impact of Rs 190.6 billion; (iii) non-payment of subsidies including Rs 14.2 billion for FATA, Rs 54.44 billion for AJ&K and Rs 33.4 billion for industrial sector; (iv) and outstanding Rs 86.26 billion against KE. They added that all these elements contributed to increase the circular debt to Rs 566 billion during the last five years from 2013-2018.

Sources while sharing details of Rs Rs187.1 billion losses breakup revealed that financial impact of excessive losses in the fiscal year 2013-14 was Rs 39.332 billion followed by Rs 54.569 billion in subsequent fiscal year with losses increasing from 3.3 percent to 4.5 percent. However impact of excessive losses was Rs 31.865 billion in fiscal year 2015-16, Rs 33. 961 billion in fiscal year 2016-17 and Rs 29.387 billion in 2017-18 fiscal year.

Published in Business Recorder, 5th August, 2018

https://epaper.brecorder.com/2018/08/04/5-page/731462-news.html