KARACHI: The circular debt increased by 23 per cent to Rs 633 billion by the end of June 30, 2015, revealed a National Electric Power Regulatory Authority (Nepra) report.
According to the Nepra’s State of Industry Report 2015, the circular debt is still a major issue confronting the power sector and receivables of the distribution sector increased by more than Rs120 billion during 2014-15, of which increase of Rs75 billion was due to the private sector.
The increased circular debt included dues of Rs43.97 billion that were to be paid by K-Electric.
Moreover, the high T&D losses of distribution companies (DISCOs) also contributed to the debt. “The authority had set an average loss target of 15.29% for 2014-15, whereas losses of DISCOs remained at around 18.73%.”
Based on the notified end-consumer tariff of June 10, 2015, the report said, if DISCOs failed to show any improvement, the impact of missing the T&D loss target would result in an annual gap of Rs41 billion.
The recoveries from agriculture connections were also a major contributor to the debt. “This cannot be resolved until provincial governments lend active support to DISCOs,” it said.
