ECC hailed for forming body to clear circular debt

He appreciated the recent decision of cut in power tariff for Small and medium-sized enterprises

LAHORE (Dunya News) – Federation of Pakistan Chambers of Commerce and Industry (FPCCI) on Saturday hailed Economic Coordination Committee (ECC) fo constituting a body comprising all stakeholders to prepare a proposal on modalities for clearing circular debt in the power sector.

FPCCI President Mian Anjum Nisar told media that formation of a committee by the ECC is a right step in the right direction, adding that growing circular debt is a continued threat for the government s recent move of cut in power tariff for SMEs (Small and Medium Enterprises).

He appreciated the recent decision of cut in power tariff for Small and medium-sized enterprises (SMEs); elimination of peak-hour charges from industrial electricity tariffs; 50 per cent discount on consumption of additional units for B1, B2 B3 connections and 25 per cent discount on additional consumptions for industrial connections for 3 years.

He said that it will boost productivity, lower costs, encourage manufacturing, enhance exports and generate employment. "We express confidence in government policies and assure to continue to work with it for the prosperity and economic development of the nation," he added.

The power sector circular debt issue may be considered holistically and a solution may be worked out to resolve the issue without escalating electricity cost.

Past trend of increasing tariff to control circular debt has totally failed, he argued and called for taking drastic measures and adopting holistic approach in tackling the problems in the sector to address power consumers  vulnerability.

He called for power sector reforms, considering the matter of over billing, technical losses, transmission issues, proposal on decentralization of the sector, promotion of off grid solutions, incentives for renewable energy solutions and capacity payments to the independent power producers. He added that if the government failed to take immediate measures the power sector is likely to choke up due to heavy outstanding dues.

Mian Anjum Nisar said that the overall power sector reforms can be included closing down of inefficient IPPs, re-negotiations with the IPPs, bringing reforms in govt-owned power producing plants, improving efficiency and reducing costs of Wapda plants, besides converting the agriculture tube wells in Balochistan to solar in collaboration with the provincial government to reduce the cost.

"We have to resolve the circular debt issue by revamping the entire power sector, including tariff setting, efficiencies of power generating units, supply chain network and payment recoveries. If this is not done, the future of energy sector would remain at stake," he concluded.