Rs 480bn circular debt clearance takes Senate body by surprise

ISLAMABAD: The Senate’s Standing Committee on Finance, Revenue and Privatisation has showed serious concern over rising power sector circular debt to the tune of Rs 321 billion in just three years and held Ministry of Water and Power responsible for the same.

The meeting, held at the Parliament House on Thursday under the chairmanship of Senator Saleem Mandviwalla, discussed the issue of clearance of Rs 480 billion power sector circular debt “in a haste”.

It was told that the Ministry of Water and Power on June 21, 2013 had sent a summary to the Economic Coordination Committee (ECC) seeking approval for making payments to independent power producers (IPPs). ” The ECC on June 28 gave approval and money was transferred to bank accounts of the IPPs on June 29, 2013,” said the ministry officials.

Committee Chairman Saleem Mandviwala said, “The ministry sent the summary to ECC on June 27, 2013 for clearance of Rs 480 circular debt and on the very next day, the ECC approved the summary and money was transferred to IPPs without any audit.”

Present at the meeting, Senator Mohsin Aziz said that government “had made a world record by clearing Rs 480 billion circular debt in a day”. “The government should adopt this attitude while making refunds to exporters,” he added.

Power Ministry officials informed the committee that the government had signed a memorandum of understanding (MOU) with power companies under which they had agreed to shift power generation plants from furnace oil to gas. However, they said that the power generation companies had refused to do so and moved court over the said issue.

The committee members also challenged the current power tariff rates, claiming there has been multi-fold increase. They were of the view that when per barrel petrol was being purchased at about $138, per unit tariff was just Rs 7 and now when the per barrel price of petrol has reduced to $40, the power tariff has gone up to Rs 12 per unit.

Earlier, the committee deferred discussion on projects of Economic Affairs Division and directed the authorities concerned to come up with detailed information in next meeting.

Among others, the meeting was attended by senators Ilyas Ahmad Bilour, Muhammad Mohsin Khan Leghari, Ayesha Raza Farooq, Nasreen Jalil, Kamil Ali Agha, Mushahidullah Khan, Sardar Fateh Muhammad Muhammad Hassani and Mohsin Aziz.

Senior officials of the Minister of Water and Power, Federal Board of Revenue, Economic Affairs Division and Finance Ministry were also present.


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