STAFF REPORT KHI: The entire circular debt system has plagued the entire system as banks, PSO, OGDCL, PPL, POL and refineries are all on the verge of collapse, a corporate lawyer and energy expert associated with some foreign investors in the local power sector has said.
“Short-sightedness of experts and the government is not only restricted to the power sector, but also the entire economy is stuck with it,” Intezar Mehdi said adding, “Ill-consequences of bad energy and petroleum policy, or the lack of a holistic view has now been termed as circular debt.”
The electricity prices charged from the end-consumers and its recovery had been the victim of government’s incompetence and is influenced by the government ofPakistan’s whims, compulsions and political calculus. As a result, National Transmission and Dispatch Company (NTDC) is unable to recover full cost recovery and surplus, he said.
About the main reason of non-recovery, Mehdi said that one of the reasons for non-recovery is the non-payment of bills by the customers. However, he said, a huge chunk could not be recovered due to misreporting, disguised losses and theft, masqueraded as inflated bills.
Mehdi said that there is no consistent gas supply for the four gas and diesel-based IPPs at Muridke, Balloki, Qadirabad and Sheikhupura, which got gas on rotational basis. The alternative, diesel firing, is apparently worse as the incremental cash loss is higher, hence, more circular debt, he said.