ISLAMABAD: The International Monetary Fund (IMF) Mission has reportedly questioned the top brass of the Power Division for two days in a row over failing to uphold pledges, including an increase in tariff, the sector’s poor performance, and limiting subsidies to just helpless home consumers.
The Power Division, comprising Secretary Rashid Mahmood Langrial, Additional Secretaries, Joint Secretary (Power Finance) and other concerned officials held meetings with IMF team in a local hotel, where the visiting Fund team raised questions on the performance of power sector and violation of commitments made in the previous review, saying why promises are made when there is no capacity to meet them, Business Recorder reported on Thursday.
According to the paper, the authorities’ inability to control the spiraling circular debt—which is presently hovering around Rs 2.55 trillion—was caused by their subpar efforts to cut losses (T&D), boost recovery, and entice the private sector to operate discos.
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Due to its failure to collect over Rs 1 trillion in outstanding receivables from the commercial and public sectors, the government anticipates an increase of over Rs 900 billion to the current stock of circular debt, bringing the total to over Rs 3.3 trillion. Discussion also included not implementing the third round of subsidy reduction. It has already been put into effect by Power Division in two stages.
The International Monetary Fund (IMF) has rejected the circular debt management plan (CDMP) presented by the government and asked the authorities to raise the electricity tariff in order to restrict the additional subsidy at Rs335 billion for the current fiscal year.
The sources said, the IMF is insisting on increase in tariff by at least Rs 5 per unit, reduction in subsidy available to domestic consumers except lifeline consumers and withdrawal of subsidy to the five export-oriented sectors announced on 6 October by Finance Minister Ishaq Dar.
According to official documents Pakistani authorities had assured IMF that recovery will be around 94 percent, but in fact it remained less than 90 percent. Transmission and Distribution losses were higher than 17 percent against the commitment of 15.83 percent.
