Circular debt will be reduced to 8 billion from 38 billion by June 2020

Jahangir Tareen spoke about the detailed plan in his recent television appearance.

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  • PML-N’s strategy added Rs450bn to the circular debt; Jahangir Tareen tells Kamran Khan.
  • The circular debt rate at present is Rs38bn per month that would be reduced to Rs26bn by the end of the ongoing fiscal month, says Tareen.
  • Crackdown on power theft has recovered 80billion rupees since October last 2018, he further says.

 

Why there is zero load-shedding at Sehr and Iftar times?

The PTI-led government had launched a drive against power theft and recovered an amount of 80billion rupees. Chairman Task Force, Secretary, and the Power Minister had worked in collaboration and considerable improvements can be seen in the energy sector of Pakistan, says Jahangir Tareen in reply to a question by Kamran Khan.

“Of these 80billion rupees that have been collected from the irregularities in the power sector, 58billion alone is recovered by power theft. We will increase this amount up to 90billion rupees by the end of this fiscal year”, claims Tareen.

What is the circular debt?

Technically, circular debt is the non-payment by the power purchaser for the generation of electricity. This non-payment can be due to several reasons. These include inefficiency in distribution companies, distribution losses, and theft. Actually, the government provides subsidy to the consumers of electricity. The subsidy that is not performance-based adds to the circular debt crisis.

How circular debt rises?

Low payments by the distribution companies give rise to the low payments to the generators of the electricity. If electricity generators are underpaid then they’ll neglect to pay their fuel suppliers and exacerbates the circular debt.

The condition of circular debt in Pakistan

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Dealing with Circular Debt – Business Recorder (2018)

 

The circular debt which was rising by an amount of 38billion rupees every month is reduced to 26billion rupees. This gruesome amount will further decrease to 8 billion rupees by the end of June 2020 and a consistent plan has been made for timely action and monitoring of debt payments, tells Jahangir Tarin to Kamran Khan of Dunya News Channel.

By the end of the next fiscal year, a regular increase in the circular debt which continued to rise in the last three decades will be brought to zero, he added.


Also See: Iran Offered Cheap Electricity To Pakistan


Crackdown on Power theft

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“The power theft was continued in every nook and corner of the country. A massive crackdown was initiated against defaulters and the theft of electricity indiscriminately. This crackdown will go on without any distinctions”, says Tareen, while describing the PTI government’s progress in the energy sector of the country.

He quoted an example of the most recent action that has been taken against a group of about 30 people in Lahore. These people were involved in power theft. He further added that we have set a target to collect 100billion rupees from the defaulters of electricity.

The private sector is still indebted to pay an amount of 470billion rupees. This amount will hopefully be recovered by June 2020, says Pakistani business magnate Jahangir Khan Tarin.

“There were some bottlenecks and issues in the efficiency of the power sector due to which 300 Megawatts of electricity was still a loss but we’ve removed these problems of electricity losses. This has resulted in the hundred per cent transmission of produced electricity to the consumers and this is probably the reason why there is no load-shedding in the Sehr and Iftar times. There is about 80 per cent of electricity feeders which are providing 100 per cent of the produced amount. This figure will exceed 99 per cent by June 2020” – Tareen says while further elaborating the performance of the new government.

 

Induction of smart meters in Pakistan

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Pakistan has plans to introduce smart meters and the task is said to be completed in collaboration with foreign companies.

 

A plan has already been launched to introduce the smart metering system all across Pakistan within the next four years. Smart meters will eliminate the manual readings and would be efficient enough to automatically detect power theft. A similar system is being installed in the transformers.

 


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