Financial system at risk

ISLAMABAD: The unsustainable power sector circular debt has reportedly put the country’s financial system at risk as Finance Ministry has refused to extend budgetary support citing financial constrains, sources close to Secretary Finance told Business Recorder.

According to Secretary Power Division, Yousuf Naseem Khokhar, power sector circular debt was around Rs 570 billion last month in addition to Rs 452.33 billion PHPL current debt, totalling Rs 1.02233 trillion.

“It is a very difficult situation. With such a huge circular debt, financial system of the country cannot be run,” observed Prime Minister, Shahid Khaqan Abbasi while presiding over a meeting of the Economic Coordination Committee (ECC) of the Cabinet.

This amount is over and above Rs 480 billion paid to the power sector companies, gas companies and PSO which has now landed in National Accountability (NAB) for investigation. Power Division has handed over the entire record of Rs 480 billion circular debt paid by the former Finance Minister Ishaq Dar. The Auditor General of Pakistan had termed the payment of circular debt illegal.

Published in Business Recorder, 7th May, 2018