In order to avoid further energy crisis, Pakistan government has assured Pakistan State Oil, PSO that it will shortly pay off the debts of the two leading power producers.
When PSO stopped the fuel supply to HUBCO and KAPCO after its warning, the shortfall of electricity in the country worsened and forced the government to resolve the non-payment issue. After a series of consultations, between Raja Pervez Ashraf, Minister for Water and Power, Syed Naveed Qamar, Petroleum Minister and Finance Secretary Salman Siddique that HUBCO and KAPCO need a bridge loan to pay off utilities. The two power companies were almost producing 2000MW on a regular basis.
These letter of credits include Rs38.7 billion from Pakistan Electric Power Company (Pepco), Rs36.6 billion from Hubco and Rs17.6 billion from Kapco.
Fuel supplies to these companies were resumed after the payment of RS. 1billion by each.
PSO sources have said, “Hubco and Kapco have to bear the burden of Rs3.8 billion and Rs2.1 billion as financial charges for delayed payments against oil supplies. Whereas Pepco also owes over Rs38 billion for oil but its supplies could not be disrupted ‘because of national interest’.”
Tahir Basharat Cheema, Pepco managing-director talking to the journalists at today said, “the chief adjuster has been asked by the government to deduct Sindh government’s Rs22 billion and adjust it against Pepco’s receivables. Punjab and AJK governments also owe over Rs3 billion each to the Pepco. The Sindh government’s demand for independent arbitration was not justified because its power bills were verified at four different stages by the relevant officials of the provincial government. The issue stood settled and the federal adjuster would accordingly make accounting from adjustments.”
PSO had reportedly complained the federal government as these power companies despite of holding back more than Rs.50 billion to them, are engaged in handing out dividends to the shareholders. In case of the intervention of Securities Exchange Commission of Pakistan both HABCO and PEPCO can be penalized for the payments of dividends to shareholders while being default in contractual payments.
Rana Asad Amin, has been appointed as an additional secretary of the finance ministry, ‘to make book adjustments in the accounts of provincial governments and power companies.’ He will adjust further payments to PSO by deducting provincial electricity bills from the provincial bills and adjusting them towards HABCO and PEPCO.
In order avoid financial obligations internationally inter corporate circular debt will be scaled down in a meeting held on Thursday.