KESC claims Rs 77b in circular debt still owed by govt


The Karachi Electric Supply Company (KESC) refuted the government’s claim that the latter had paid its entire circular debt, stating that the federal and provincial governments were yet to clear the total outstanding dues of Rs 77 billion owed to the KESC.

KESC representatives pointed out that the government had not yet taken any decisions to either adjust the government dues against the KESC’s dues payable to public sector power and fuel providers, nor paid the outstanding amount directly to the KESC to enable it to clear its dues itself. In this situation it was incorrect to claim that the issue of circular debt had been completely settled, they added.

While referring to the latest government statement that it had disbursed the outstanding amount of Rs 480 billion to independent power producers (IPP) and other power sector entities, the KESC representatives said that the federal government owed the former a total of Rs 68 billion as at July 22. This included tariff differential claims amounting to Rs 36.7 billion while the remaining amount belonged to general sales tax (GST) refunds and unpaid power bills against various federal departments and bodies.

Moreover, the Sindh Government had to pay a total of Rs 9 billion to the KESC. This included outstanding power bills amounting to Rs 6.1 billion owed by Karachi’s gity government and Rs 2.3 billion owed by other provincial departments and bodies.

The KESC representatives also pointed out that even if the government decided to adjust its dues against its current liabilities of Rs 56 billion, the government would still have to pay a net outstanding amount of Rs 21 billion to the KESC. This, they added, was not mentioned in the details provided by the federal finance ministry while describing the circular debt.

The KESC urged the government to take an immediate decision over the huge amount of outstanding dues which had been causing great difficulties in terms managing load shedding in the holy month of Ramadan for the utility provider.