PPP wants circular debt payments made public

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The Pakistan People’s Party (PPP) on Saturday reiterated its call for making public the details of the Rs 480 billion payment made to settle the circular debt.

Senator Farhatullah Babar stated that merely information about the amount paid to each power producer was meaningless unless the critical information about the oil supplied, the power produced and the capacity utilised by each power producer was also provided.

Following public criticism, the Ministry of Finance announced on July 23 that “details of payment of Rs 480 billion to settle the circular debt of Rs 503 billion were now available on the official site of the ministry”.

The figures of payments made to each producer did not remove the suspicion that billions had been paid to power producers for electricity that was never produced and to oil suppliers for shipments that were never made, said Babar in a statement issued from the PPP’s media office.

Doubts still lingered because payments had been made to the private power producers and other entities in the energy sector without carrying out third party pre-audit by independent technical and professional accounting bodies, he said, demanding that all facts be laid bare.

The reports of over Rs 50 billion overpayments and internal differences of opinion within the Finance Ministry were disturbing and called for thorough investigation, he said.

Babar also referred to the claim that Pakistan Electric Power Company (PEPCO) provided reconciled accounts to the Ministry of Water and Power which then forwarded them to the Finance Ministry apparently to remove suspicions of any underhand deal.

He said even if this procedure had been adopted it was a faulty procedure without carrying out independent financial and technical audit. Allowing the private producers of electricity and the power purchaser to sit together behind closed doors and decide amongst them an issue for which the price was ultimately paid by the general public looked like a ‘muk-muka’. An ordinary citizen could not be blamed if he saw it as an underhand deal involving vested interests at public expense, he said.

He said according to media reports the Asian Development Bank insisted and succeeded in auditing the payments made to power producers as part of the recent agreement with the International Monetary Fund (IMF).

If these reports were correct it was necessary that the circular debt payments be subjected to a comprehensive third party audit, he said.

He said that the 18th Amendment had specifically inserted Article 19 A in the constitution which stated that every citizen shall have the right to access of information in all matters of public importance. Complete information pertaining to the payments made to private power producers was a matter of great public importance and must be made public. Doubts will linger as long as there is secrecy surrounding it, he said.

Babar said reports about banks being open on the last Saturday of June despite a weekly holiday to make the payments before closing of the last financial year on June 30, also raised questions.

He said some power producers were also unofficial advisers on energy and were interested only in the payment of unpaid bills instead of structural reforms.

The government was unable to address critical issues, including the gap between power generation cost and sale, losses due to theft and in transmission and distribution, as was evident from its inability to reach a consensus in the Council of Common Interest (CCI) meeting on Tuesday.

As a result the circular debt would re-emerge to haunt the nation because of the few who had worked only for their own vested interests, he said.