ISLAMABAD – Contrary to the government’s efforts to play down its failure to resolve the longstanding structural issues, the rising circular debt, with power sector receivables now exceeding Rs590bn, is more severely affecting public life in many ways.
The lack of coordination has led to the putting of 6,600MW of coal-based power projects at the Gadani Power Park on the back burner. So was the case with coal-based power projects at three other locations in Punjab. These have been replaced with a proposal to establish 3,600MW LNG-based power projects in Punjab, for which arrangements have yet to be made and agreements are yet to be signed.
Both water and power and petroleum ministries are being run by officials in grades 20-21 against the grade 22 positions. PSO with Rs1.6trn in annual revenue is also facing crisis. It was being run for 17 months by an acting managing director who was removed along with seven other top executives in the wake of the petrol crisis.
The lower staff of both the ministries remains unclear about the direction of the government. The billing-to-recovery ratio of less than 89pc in the power sector and transmission losses of around 20pc are just a few manifestations of this institutional confidence crisis. The financial gap returns again and again and is filled by increases in the electricity tariff to meet IMF conditionalities.
