ICCI urges govt to control rising circular debt


ICCI members warn of economy slump due to rising power load shedding because of riding circular debt

The Islamabad Chamber of Commerce and Industry (ICCI) has shown great concern over the rising circular debt that has again swelled to Rs 280 billion and has called upon the government to take urgent measures to address this serious issue.

“If this issue is left unattended, it would badly hit production activities and would send the economy further into a slump,” said ICCO President Muzammil Hussain Sabri, adding that due to the persistent energy crisis, industries are already operating far below their capacity.

“The rising circular debt would give rise to load shedding and cause further decline in production activities, leading to drop in exports and a slowdown in economic activities,” said the president.

He said the main cause of swelling circular debt was poor recovery of electricity bills due to which receivables have risen to Rs 576 billion. He said that owing to poor recovery of electricity bills by the distribution companies (DISCOs), the power system was sustaining huge annual loss of Rs 100 billion and if this worsening situation was not controlled, the whole power system would be paralysed.

He said that China has promised to invest more than $33 billion in Pakistan’s energy sector to generate more than 16,000 megawatts of electricity but was afraid that without urgent and drastic overhauling, the present crumbling power infrastructure would not be able to sustain additional power load.

ICCI Senior Vice President Shakeel Munir criticised the inefficient performance of power transmission and distribution systems which was incurring losses of up to 20 to 25 percent on account of poor infrastructure, mismanagement and power theft. He said that 9 electricity distribution companies suffered line and administrative losses of more than 16 billion units during 2013-2014 and cost the national economy “a staggering financial loss of Rs 211 billion”. This state of affairs calls for urgent measures to remedy the situation, he said.

ICCI Vice President Ashfaq Chatha said that power load shedding was again on the rise due to which business activities were suffering and people were facing great problems. He urged that government to increase power generation on top priority basis by utilising alternative sources of energy including hydro, solar and wind to provide electricity at affordable rates. He stressed that the government remove all impediments in the way of speedy generation of electricity so that with the improvement in power supply, business and industry could flourish and contribute more effectively in the fast revival of the economy.