F.P. Report
ISLAMABAD: The Pakistan Industrial and Traders Associations Front (PIAF) has stressed the need for overhauling the power sector through some drastic measures as the total cost of inefficiencies in the power sector is continued to rise, crossing Rs2.6 trillion by Oct 31, 2023, showing 13 percent or Rs 75.25 billion per month growth in its flow, indicating that anti-theft drive failed to give results.
PIAF Chairman Faheemur Rehman Saigol, referring to the latest data, observed that circular debt stock touched Rs2.310 trillion at the end of FY 2022-23, which has now reached Rs2.611 trillion during July-October 2023-24 with a growth of Rs301 billion against growth of Rs249 billion in same period of 2022-23.
Faheem Saigol said that the Discos’ losses, inefficiency stood at Rs77 billion during July-October 2023-24 as compared to Rs 65 billion in the same period of 2022-23, showing addition of Rs 16 billion in total circular debt stock.
He said that in present scenario the energy efficiency and conservation are key measures used by countries across the globe to mitigate associated risks. However, in the case of Pakistan, both energy efficiency and conservation were generally treated as alien concepts.
Faheem Saigol noted that there was an urgent need for up-gradation of energy efficiency and conservation standards and strict enforcement, besides replacement of inefficient appliances and consumer awareness for responsible use of energy were other key areas which should be identified for action as a national priority. He estimated that a dollar outflow of around $ 1.25 billion could be potentially saved annually through implementation of efficiency and conservation measures.
The PIAF Chairman pointed out that the line losses ran as high as 9 percent over and above the percentage allowed by NEPRA. He informed that theft and line losses should be addressed through advanced metering and cabling.
Payables to power producers have reached Rs1.750 trillion during four months of CFY from Rs 1.434 trillion at the end of FY 2022-23, showing an addition of Rs316 billion. The stock of payables to IPPs was Rs 1.750 trillion during July-October 2023-24.
However, Gencos’ payables to fuel suppliers have declined to Rs96 billion from Rs 111 billion in FY 2022-23 and posted Rs 5 billion growth during July-October 2023-24 from Rs 91 billion in the comparable period of 2022-23. No change was witnessed in Rs 765 billion parked in Power Holding Limited (PHL). PHL parked amount was Rs 793 billion during the same period of 2022-23.
Key reasons for the substantial growth in flow of circular debt are issues of K-Electric (KE), AJ&K, release of subsidies, delay in implementation of QTA adjustments, higher interest payments, rupee dollar parity etc.
The sources said, Rs 389 billion is receivable from KE as on October 2023 – pending due to subsidy dispute between the power utility company and the federal government.
He said that the amount of budgeted but unreleased subsidies was recorded at Rs 8 billion during the first four months of current fiscal year against Rs54 billion in the comparable period of 2022-23.
IPPs interest charges on delayed payments of PHL and IPPs recorded at Rs 45 billion in four months of current fiscal year against Rs 54 billion in the same period of 2022-23.The amount of IPPs interest charges on delayed payments was Rs 143 billion during the entire fiscal year 2022-23.
Pending generation cost (QTAs + FCAs) stood at Rs 110 billion against Rs 103 billion during the same period of 2022-23 and Rs 250 billion in FY 2022-23.
Non-payment by K-Electric reached Rs 43 billion in July-October 2023-24 against Rs65 billion during the same period of FY 2022-23.
Discos’ under recoveries reached Rs 165 billion during first four months of 2023-24 as compared to Rs 61 billion during corresponding period of 2022-23; however, their cumulative under recoveries stood at Rs 236 billion as of June 30, 2023. Other adjustments (prior year recovery, etc.) were Rs147 billion during July-October, 2023-24 against Rs 254 billion in July-October 2022-23.
Sharing details on payment through fiscal space, he said, in CY 2022-23 PHL principal repayment were negative Rs 35 billion whereas stock payments stood at negative Rs 127 billion totaling to negative Rs 162 billion. He further stated that payables to power producers increased by Rs5 billion due to withdrawals by FBR in April 2023.
