For $300m, ADB promised new surcharges on electricity
Pakistan has given written assurances to the Asian Development Bank that it will impose new surcharges on electricity consumers, including a circular debt reduction surcharge, in return for a $300-million loan, a development tantamount to punishing consumers for the government’s poor governance.
The application of surcharges starting from 2019 are expected to reduce the stock of circular debt from Rs375 billion to Rs240 billion in two years, and the combination of full cost-recovery tariff and surcharges could bring it down to Rs65 billion by the end of fiscal year 2021, wrote Ishaq Dar.
The government also wants that electricity consumers should bear the brunt of its failure to timely pay the cost of power generation to the Independent Power Producers. The IPPs have filed appeals in the courts to invoke the sovereign guarantees.
Published in The Express Tribune, 8th July, 2017