Pakistan Electric Power Company in dire straits, debt exceeds Rs300 billion

According to a top official of the Water and Power Ministry, in Pakistan inter-corporate debt had ballooned to Rs300 billion and authorities are considering penalising the Karachi Electric Supply Company (KESC), the biggest defaulter.

Secretary water and power, Shahid Rafi, told the Public Accounts Committee during a meeting on Wedneday that the Pakistan Electric Power Company (Pepco) was again in serious trouble with inter-corporate debt exceeding Rs300 billion.

This is in addition to the Rs301 billion that the government had parked in a holding company and was paying Rs40 billion annual interest on it. In practical terms the cumulative debt had surged to Rs600 billion blocking the entire electricity generation and distribution system.

Rafi added that the biggest defaulters needed to be brought to justice and he would request the National Electric Power Regulatory Authority (Nepra), the power sector watchdog to revoke KESC's licence and charge sheet it. He added that if KESC consumers were not paying their bills it was not Pepco's fault.

According to Pepco managing director, Tahir Basharat Cheema, KESC owed Rs49 billion to it and though the Karachi city government, Karachi Water and Sewerage Board and local bodies had to pay Rs21 billion to KESC, it did not mean that the power supplier would be exempted from payment of its dues he added.

He added hat the Sindh government owed Rs26 billion to Pepco, the AJK government's arrears stood at Rs3.2 billion with military cantonments to pay Rs1 billion. Also the Ministry of Defence Production owed Rs1 billion, Khyber-Pakhtunkhwa owed Rs1.5 billion while the Balochistan government owed Rs12 billion and Punjab government had to pay Rs9.8 billion.