Cabinet to try to resolve differences between Power Division and NEPRA

ISLAMABAD: The federal cabinet will meet today to settle the war of words that has been going on between the Power Division and the National Electric Power Regulatory Authority (NEPRA).

The Power Division, which falls under the ministry of energy, insists that the country’s power sector is on an upward trajectory, since the PTI came to power. However, NEPRA is skeptical of the claim. It asserts that the situation has gone from bad to worse, particularly regarding circular debt.

The deadlock will now be tabled in front of the federal cabinet today, after one federal minister and two advisors to the prime minister could not resolve the dispute.

Secretary Power Irfan Ali told Geo.tv that he firmly stands by his “performance figures”, although he admitted that some days back the ministry of energy had launched a campaign against power theft in the country. The initiative, he adds, faced opposition from “some powerful mafia”.

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“But we will continue our struggle to nab the mafia in the power sector,” Ali said.

The NEPRA and the Power Division have been squabbling for several days now, over what the latter claims to have done to arrest the steadily climbing circular debt, check line losses and control power theft.

On the other hand, the regulator is skeptical of the division’s positive outlook and instead paints an alarming picture. It demands that an emergency be declared at the highest political level to stop the power sector from reaching to a point of no return.

Things came to head when the NEPRA chief informed the prime minister that the total circular debt in the country, as of December 31, 2019, stood at Rs1.8 trillion, and had further increased to Rs 1.9 trillion by end of January 2020.

In the detailed briefing to Prime Minister Imran Khan, NEPRA explained that the Rs492 billion circular debt piled up so far also included Rs325 billion due to inefficiency of the power companies, including Rs132 billion under recoveries (90%), Rs150 billion mark-up on delayed payments, Rs33 billion due to inability of power companies to meet 15.7% target for losses (actual losses stand at 17.7%) and Rs10 billion due to inefficient generation.

The premier was also informed that the monthly increase in circular debt touched the lowest ebb of Rs3.25 billion in June 2016. But it has since been rising steadily with an average build up amounting to Rs10.8 billion by June 2017, shooting up to Rs25.58 billion by June 2018 and further rising to Rs 41 billion by June 2019.

However, it had slightly reduced to Rs39.67 billion in December 2019, before going up again to Rs42.42 billion in the month of January 2020.

These figures were in sharp contrast to what Minister for Power Omar Ayub Khan had claimed on a number of occasions. He is of the opinion that the growth rate of circular debt had been brought down from Rs35 billion to Rs15 billion a month.

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When the differences first emerged, the prime minister had asked his advisor on finance and revenue, Dr Abdul Hafeez Shaikh, to mediate between the division and NEPRA.

A meeting was convened by the Adviser but it ended in vain.

Later, the Minister for Planning Asad Umar, the prime minister’s advisor on petroleum and the head of the prime minister’s task force on energy also tried to smooth out difference, but nothing could be worked out.