Stakeholders to find solution to circular debt tomorrow

iSLAMABAD: Despite a national holiday the ministry of finance will hold a meeting of power sector stakeholders in Karachi on Saturday (Feb 27) to finalise measures for the reduction of circular debt and seek long-term solution to this problem, a ministry official told Dawn on Thursday.

The meeting has been convened by outgoing Finance Minister Shaukat Tarin who wants to settle the lingering issue of circular debt before leaving his portfolio, the official added.The main agenda of the meeting is to find a long-term solution to settle the circular debt which has created serious financial problems for the power and petroleum sectors.The official said that the meeting would finalise reduction package of circular debt by around Rs40 billion as the finance minister had taken serious note of resurgence in the circular debt despite various government efforts to settle it.The industry sources said that the circular debt had surged to Rs135 billion, while the official of finance ministry said that the exorbitant figure was due to duplication of figures and the actual debt stood at Rs108 billion

The real circular debt was Rs80 billion and the Rs28 billion was the credit payments to PSO by the electricity generation companies, the officials said.The Saturday meeting is expected to settle Rs6 billion disputed billings between the Sindh government and the KESC, tariff issues worth Rs5 billion between KESC and PEPCO is also expected to be settled.The official said that the issue of delayed recoveries worth Rs8 billion by PEPCO from its private consumers would be discussed.The meeting is expected to discuss modes for financing of Rs20 billion. This includes issuance of Rs5 billion term finance certificates by the banks for PEPCO, the official said.Meanwhile, talking to media here on Thursday Mr Tarin said that PEPCO role should be reduced as a holding company and the operational matters should be controlled by the eight electricity distribution companies.He said that due to centralised structure, PEPCO cannot improve recovery and its receivables from private sector have increased by Rs15 billion in few months.The other measures to reduce the circular debt would be clearance of old dues between the government departments and PEPCO apart from introduction of cash component to improve financial standing of power sector.