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Event Title: The meeting of the Senate Special Committee on Circular Debt was held here in Parliament House under Charimanship of Senator Shibli Faraz.

Event Date: 2018-08-01

The meeting of the Senate Special Committee on Circular Debt was held here in Parliament House under Charimanship of Senator Shibli Faraz. The meeting was attended by Senator Dr. Jehanzaib Jamaldini, Senator Behramand Khan Tangi, Senator Usman Khan Kakar, Senator Sajjad Hussain Turi, Senator  Mir Kabeer Ahmed Muhammad Shahi, Senator Moulana  Atta-ur-Rehman, Senator Ayesha Raza Farooq and senior officers of the Power Division, NTDC, QESCO,  HESCO, SEPCO and PESCO.

While addressing the issues related to circular debt which is PKR 566 billion in the country, Convenor Committee, Senator Shibli Faraz, was of the view that it is imperative that both the government and the people of Pakistan be sensitized about the issue. This problem, he asserted must be addressed on war footing. 

Waseem Mukhtar, Additional Secretary Power Division, briefed the Committee about the overall situation of the Energy Sector in Pakistan and discussed remedial measures to be taken to reduce circular debt. He asserted that for any progress to be made it was imperative that policies be reframed especially with regards to DISCOs. He asserted that boards must comprise professionals that have no associated interests.  He further informed the Committee that every Discos had their own planning wing and that they should come up with new ideas and solutions to ease the situation.

According to Managing Director NTDC, Zafar Abbas, making any progress in terms of energy transmission has become impossible as it entails huge costs.  He said, however, that in view of growing demand a plan has been put in place to upgrade transmission lines. 

According to Joint Secretary Power Division, Zaigham Ishaq Khan in November as per decision the Cabinet Division load-shedding rota was rescheduled.  It was revealed that the government instructed that electricity must be supplied to all areas without suspension regardless of their recovery status.    This caused an increase in line losses that overburdened the power sector in Pakistan and also caused an increase in circular debt.

While discussing circular debt at the DISCOs level, it was observed that Banu, DI Khan, Charsadda and the Khyber Circle were most notorious in terms of electricity theft.  The percentage of recovery in these areas was less than 30 percent. Malakand Division was a top bill paying area.  According to PESCO officials, the company suffered total losses worth PKR 38 billion. 

According to HESCO officials total annual line losses entailed PKR 27 billion. The percentage for Company losses was 30.7 percent.  While discussing Balochistan and losses incurred in the province, Senator Usman Khan Kakar was of the view that the energy crisis in the province can only be resolved by resorting to Solar Energy. In the financial year 2017- 18 QESCO suffered losses worth PKR18.7 billion.

According to SEPCO officials company losses entailed 9.5 billion whereas recovery was 60 percent.  Convenor Committee, Senator Faraz pointed out that delay in the Patrind Project entailed losses worth USD 2 Crore due to capacity charges.

While discussing the Right of Way and its intricacies, Convenor Committee Senator Faraz asserted that law making must be undertaken so that a mechanism is in place for further action. 

Convenor Committee, Senator Faraz instructed the Power Division to provide the Committee with province wise details (Industrial/Domestic/Commercial) of running defaulters.  He asserted that the Committee’s target was to deal with the menace of circular debt. Convenor Committee, Senator Faraz showed displeasure at the lack of out of the box solutions of DISCOs for the issues that plagued them. He asserted that the Committee expected their planning wings to be more proactive.