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Pakistan Industrial and Traders Associations Front for cut in Public Sector Development Programme to overcome Circular Debt

Lahore, April 25, 2013 (PPI-OT): Pakistan Industrial and Traders Associations Front (PIAF) has called for a drastic cut in Public Sector Development Programme to overcome energy sector Circular Debt that has crossed the staggering figure of Rs870 billion.

In a statement issued here, the PIAF Chairman Malik Tahir Javaid said that the amount represents about four per cent of GDP, and if circular debt continued unabated, will increasingly constrain the availability of electricity and further slow down economic activity.

“We consider that some expenditure including defence budget are absolutely necessary but all unnecessary funds should be diverted to eliminate circular debt once for all. Only a consolidated energy strategy would work.”

He said that the private sector understands that poor governance, delayed recoveries and pilferage are the reasons for fast increase in the circular debt therefore the government should use iron hand to control the factor and if it needs some assistance from the private sector it would readily extend maximum cooperation.

He suggested that the government should undertake specific policies and programmes to improve the governance and performance of energy sector entities to decrease costs, increase cash flow, and ensure operational and financial integrity of the sector.

Malik Tahir Javaid said that it is very unfortunate that the government had failed to initiate improvements in the legal framework to curb theft of electricity had a strict action been taken in the past the trade and industry would have been in a bit better position to contribute to economic recovery.

“The federal government also has been lax in passing appropriate legislation to curb electricity thefts, promote energy conservation, increase commercial transparency, strengthen regulatory entities, and promote an open and competitive energy market.”

He said at present thermal power plants are operating 40 to 50 per cent power generation capacity, which would further drop due to non-payment of dues.

He said that Pakistan was going against international practices with respect to energy mix as no mega hydel project had been started after Ghazi Brotha Hydropwer Project. “We have to re-fix our priorities and concentrate on coal as the developing countries are giving preference to coal fired power plants.

Tahir Javaid Malik said that the electricity shortage has hit the industry hard as the manufacturing cost of industrial goods has gone manifold, reducing the profit margins. Besides, the frequent interruptions in the supply of electricity have impeded the productions, making it difficult for the businessmen to meet production targets.

“The industrialists are finding it hard to meet the deadline of dispatching the orders that had been booked by them as the production had been affected due to the erratic power supply. The frequent outages are not only making the people jobless, but also leading to machinery failures.”

For more information, Contact:
Pakistan Industrial and Traders Associations Front
110/s Kot Lakhpat Industrial Estate
Lahore, Pakistan
Phone: (92) 42 5123522
Fax: (92) 42 5123522
Email: Info@piaf.pk

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