Circular Debt: Govt burdened power consumers with Rs180 bn


ISLAMABAD: The government had borrowed Rs180 billion to finance the circular debt. It is recovering this amount from the power consumers in the form of surcharges in electricity bills. This was Finance Ministry on Tuesday informed the Senate Special Committee on Circular Debt.

Chair of Committee, Senator Shibli Faraz of PTI said that the government never encouraged alternate energy sources. Also, there was no support to private sector install such plants.

He said that the government had deliberately discouraged this sector, as to exploit the costly sources of energy.


Joint Secretary of Power Division Zargham said that there is no ban on power generation from alternative sources and anybody can do business in this sector.

CEO of the Alternative Energy Development Board (AEDB) Amjad Awan said that total supply of electricity to national grid from alternative energy sources-based is around 1036MWs. Solar PV power projects are generating 430MWs and the Quaid-e-Azam Solar Power Plant is also successful and is generating electricity.

He added licenses of 132.4MWs capacity for 16 Bagas-based power plants, tariff and generation have been obtained.

Awan said that regarding power generation from alternate sources, the masses have not been sensitized nor awareness campaign had been launched by the government.

Shibli Faraz said to control power shortfall and circular debt, it is necessary to convert these tube wells to solar system and also do effective monitoring of water table.

ALSO READ: Power supply repaying Rs180b borrowed by Government

Share of Balochistan in Circular Debt

The CEO of Quetta Electric Supply Company (QESCO) while briefing the committee said that agricultures consumers of QESCO consume 74.14 percent electricity. He further said that water table in QESCO jurisdiction has dropped from 300 feet to 850 feet, due to which the agriculture tube wells owners have increased the capacity of electricity pumps.

There are 327000 agriculture tube wells under Qesco which is also one of then strumentals in lowering the water table.

He said that Balochistan government is not paying our dues. The provincial government has paid only Rs3.4 million out of Rs12.5 million arrears. He further said that the ceiling of agriculture tube well bills is Rs75000, of which the owner only pays Rs10000. The provincial and federal governments share remaining amount by ration of 60:40, respectively. This also adds up to circular debt.

Earlier the farmers were paying 4000 rupees and after its increase to 10000, mostly farmers are not paying bills. He further said that up-gradation of four grid stations is complete.

He further said that supply of electricity to Balochistan is only 1000MWs against demand of 1800MWs. Domestic and industrial consumption is 230MWs, while remaining is for tube wells.

Joint Secretary Zargham said that we have sent PC-I to the Planning Commission for converting 10000 agriculture tube wells in Balochistan from grid electricity to solar system.

Power Subsidy

Last year, the government had paid around Rs118 billion as power subsidy. For this year [2018] it would be Rs150 billion. This subsidy is being provided to agriculture tube wells and to those domestic consumers who consume less than 300 units. For agriculture tube wells in Balochistan, nine billion rupees of subsidy would be provided.

Senator Bahramand Khan Tangi said that still there is 22 hours power outage in his constituency despite 90 percent people are paying their bills. Shabqadar grid station is lying closed, he said.

Senator Bahramand Khan Tangi, Senator Dr. Sikandar Ali Mandhro, senior officers of the Ministry of Finance, Power Division, NEPRA, QESCO and KAPCO were present in the meeting. Representatives of energy companies operating in the private sector as well as from the alternative and renewable energy sector also attended the meeting.

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