The chimera of circular debt retirement

The chimera of circular  debt retirement

Lahore High Court (LHC) Chief Justice (CJ) Umar Atta Bandial has directed the ministry of water and power to present an audit report on the Rs 480 billion distributed among Independent Power Producers (IPPs) by the present regime in a bid to retire the circular debt. The order is accompanied by the condition that the audit should have been conducted by the auditor general of Pakistan and a private auditor. The CJ has also asked about the government’s measures regarding power theft, with a remark that ostensibly the government has done nothing to control it. Previously the Supreme Court (SC) had also asked the government to provide the audit report. Since speculation was rife that the money had been doled out to cronies of the government, the issue needed an immediate response. However, to the chagrin of many and keeping to its delaying tactics, the government never presented the audit report for scrutiny. Now that the issue has landed in the LHC, one hopes that the government would produce the report at the earliest. Interestingly, the government has never denied having conducted the audit. Then what is keeping it from bringing it to light is anybody’s guess. The court was hearing a petition against load shedding and an application challenging the recent increase in power theft. The petitioner has claimed that in spite of paying off the circular debt, the pattern of load shedding has not changed. It has remained the same as it was before the debt was paid. The claim is spot on.

Not only has load shedding worsened, the circular debt too has resurfaced to the tune of Rs 194 billion as estimated on January 16, 2014. The receivables of the power sector against the provincial and AJK governments stand at Rs 499 billion. The inability of the distribution companies to recover outstanding amounts from electricity users in the goverments and curtail line losses has resulted in this massive reaccumulation of circular debt. It shows that the government has resorted to only cosmetic measures to address the problem. Without curing the root cause of the recurring debt, the problem would persist. And it has. The government is paying from its pocket (taxpayers money) for something that is owed first by itself and those who are allowed, either through negligence or consciously, to pilfer electricity. The government, which includes the Pakistan army and the SC, are known electricity defaulters. And since their power is never cut off, they do not mind enjoying with impunity the accumulated sin of sending down misery on the common man, who not only pays for his own consumption but for those as well whom he had sent to represent his cause in the Assemblies. *