ISLAMABAD: The Power Division has reportedly decided to shift the presentation of the power sector’s Circular Debt (CD) report to the Cabinet Committee on Energy (CCoE) on a quarterly basis, instead of the current monthly submission.
The country’s power sector circular debt has reached approximately Rs 2.5 trillion, driven largely by the underperformance of Power Distribution Companies (Discos). These companies are incurring losses greater than those allowed by the National Electric Power Regulatory Authority (NEPRA), and all efforts—both formal and informal—to curb these losses have been ineffective due to widespread corruption within Discos, weak governance, and collusion between Disco staff and power thieves.
According to sources, the CCoE had approved a monthly reporting format for circular debt on March 27, 2020. This format required detailed information on billing, collection, and circular debt within the power sector, including subsidies. In line with this directive, the Power Division has been submitting monthly circular debt reports to the CCoE.
However, the Power Division has now recommended that the reports provide a more detailed and analytical assessment of circular debt, including an exploration of the underlying factors contributing to its growth. The division argues that due to data limitations, providing such an in-depth analysis on a monthly basis is not feasible. Instead, they suggest that a quarterly report would allow for a more comprehensive review of circular debt, enabling better strategic decisions based on broader trends.
Sources also revealed that the Power Division has pointed to the International Monetary Fund (IMF) as support for this change, noting that the IMF’s review framework is based on quarterly circular debt reporting.
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