sparklingway
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I have time and again tried to explain to many people that the "biggest" reason behind the power crisis is the circular debt that has been swelling since 2002. This article from the News notes down all figures in a single short columnn.
Shaukat Tarins parting act: resolve circular debt issue
By Khalid Mustafa
ISLAMABAD: Outgoing Finance Minister Shaukat Tarin has vowed to resolve, once for all, the monstrous issue of circular debt, which has again reared its ugly head and mortgaged the whole energy sector, in his last meeting as finance minister to be held on February 27.
We informally discussed the issue in detail on Wednesday, but the crucial meeting will take place on February 27, he told The News in an exclusive talk. I assure you that the issue would be resolved once for all, he declared.
In real terms the circular debt has swelled to Rs108 billion which mainly includes non-payment of Rs42 billion by KESC, Rs21 billion by the government of Sindh and Rs15-16 billion from commercial consumers to the Pakistan Electric Power Company (Pepco).
The sources said that the secretary water and power, secretary finance, KESC top management and representatives of the government of Sindh and other concerned officials will attend the meeting to be held in Karachi.
This would be the last meeting of Tarin as finance minister. He will step down on February 28 since his resignation has been accepted by Prime Minister Yousuf Raza Gilani. One can gauge the appalling situation emerging out of the increasing circular debt from the fact that the UAE government, which has 40 per cent share in the Pak-Arab Refinery Company (Parco), has started feeling the heat and has indicated that it would not initiate work on the proposed $5 billion refinery at the Khalifa point near Hub in Balochistan unless and until the circular debt issue gets resolved.
Pakistan State Oil owes Parco Rs27 billion. Parco has borrowed Rs39 billion to make itself operational with Rs450 million being paid as interest. Now it has become incapable of running the refinery. In the proposed Khalifa refinery, Parcos equity would be $390 million and in the current situation it is not possible for the refinery to generate equity for Khalifa refinery.
Meanwhile, the PSOs outstanding amount has swelled to Rs103 billion, mainly owed by the power sector. The PSO has also stopped the jet fuel supply to the Pakistan International Airlines (PIA), as its cheque of Rs1.86 billion has bounced. The Pakistan State Oil (PSO) owes refineries some Rs67 billion.
The sources said that the government has indicated that it would not let PSO default and would arrange a sizeable amount for it. A decision to this effect is expected in the February 27 meeting.
Shaukat Tarins parting act: resolve circular debt issue
By Khalid Mustafa
ISLAMABAD: Outgoing Finance Minister Shaukat Tarin has vowed to resolve, once for all, the monstrous issue of circular debt, which has again reared its ugly head and mortgaged the whole energy sector, in his last meeting as finance minister to be held on February 27.
We informally discussed the issue in detail on Wednesday, but the crucial meeting will take place on February 27, he told The News in an exclusive talk. I assure you that the issue would be resolved once for all, he declared.
In real terms the circular debt has swelled to Rs108 billion which mainly includes non-payment of Rs42 billion by KESC, Rs21 billion by the government of Sindh and Rs15-16 billion from commercial consumers to the Pakistan Electric Power Company (Pepco).
The sources said that the secretary water and power, secretary finance, KESC top management and representatives of the government of Sindh and other concerned officials will attend the meeting to be held in Karachi.
This would be the last meeting of Tarin as finance minister. He will step down on February 28 since his resignation has been accepted by Prime Minister Yousuf Raza Gilani. One can gauge the appalling situation emerging out of the increasing circular debt from the fact that the UAE government, which has 40 per cent share in the Pak-Arab Refinery Company (Parco), has started feeling the heat and has indicated that it would not initiate work on the proposed $5 billion refinery at the Khalifa point near Hub in Balochistan unless and until the circular debt issue gets resolved.
Pakistan State Oil owes Parco Rs27 billion. Parco has borrowed Rs39 billion to make itself operational with Rs450 million being paid as interest. Now it has become incapable of running the refinery. In the proposed Khalifa refinery, Parcos equity would be $390 million and in the current situation it is not possible for the refinery to generate equity for Khalifa refinery.
Meanwhile, the PSOs outstanding amount has swelled to Rs103 billion, mainly owed by the power sector. The PSO has also stopped the jet fuel supply to the Pakistan International Airlines (PIA), as its cheque of Rs1.86 billion has bounced. The Pakistan State Oil (PSO) owes refineries some Rs67 billion.
The sources said that the government has indicated that it would not let PSO default and would arrange a sizeable amount for it. A decision to this effect is expected in the February 27 meeting.
