The government’s inability to reconcile power sector receivables may drag the sector into serious financial problems and increase the duration of loadshedding beyond the current level of 8 to 10 hours. Sources said Pepco’s rising outstandings against public sector remained one of the major agenda items of the last finance secretaries’ meeting. The Finance Ministry has reportedly asked provincial finance secretaries to hold meetings with Pepco and Disco officials for early reconciliation of dues against public sector.
Total Pepco receivables against public and private sector may have crossed Rs400 billion with Rs165 billion against public sector and over Rs230 billion against private sector.
When contacted, Finance Ministry spokesman said: “we are providing subsidy to powersector as and when required by the Ministry of Water and Power.” He said the actual figures of inter-circular debt can only be known to the Ministry of Water and Power. Another concern for the economic managers is the likely increase of $2 billion in oil import bill following the government decision to suspend gas supply to CNG sector during three to four months of winter.
Sources in the Finance Ministry said estimates of oil imports were based on additional requirements due to an increase in demand. They said the country’s oil import bill stood at $14.917 billion in 2012-13 with import of 19.209 million tons during the last fiscal year. He acknowledged that availability of furnace oil to the power plants would be essential to maintain the electricity shortfall to current level of 2,600MW and loadshedding between 8 to 10 hours.
The official attributed 2,600 MW shortfall to reduced hydel generation following canal closure and diversion of 85 mmcfd power plants gas to the industry. The Ministry of Water and Power has sought Rs30 billion from the Finance Ministry to meet the oil import demand for one month of canal closure. The hydel generation has reportedly dipped to 1,320 MW a couple of days back and is expected to decline further in coming days with routine canal closures at this time of the year. The Independent Power Producers (IPPs) are producing 5,650 MW and thermal power plants 1,430 MW. The total power generation in the country fell to 8,400 MW against the total demand of 11,000 MW, reflecting a shortfall of 2,600 MW.
According to a senior official, low-efficiency of power plants cost Rs 20 billion annually. He said the average efficiency of 60 percent power plants is 30 to 35 percent, which is considered very low. The transmission and distribution efficiencies also cost Rs 70 billion annually. Line losses of 20-22 percent are considerably higher compared to 16 to 17 percent allowed by National Electric Power Regulatory Authority (Nepra).