AGP terms payment of Rs 480 billion under circular debt illegal


Says this is the biggest mega corruption scandal of the PML-N government; Report details illegal payments made to power companies;

The Auditor General of Pakistan (AGP) has termed the payment of Rs 480 billion made to power companies in the form of circular debt as un-transparent and illegal calling it the biggest mega corruption scandal of the Pakistan Muslim League-Nawaz (PML-N) government, the news agency Online claimed on Thursday.

The news agency reported that the AGP had dispatched the complete audit report to the president of Pakistan regarding the payment of Rs 480 billion.

According to the news agency, which claimed to have obtained a copy of the report, Nawaz government made a payment of Rs 342 billion to PEPCO in the form of circular debt prior to the audit, which was illegal. The government paid Rs 32 billion extra to the company under late payment which was also illegal. According to the report, government committed severe irregularities while making payment of Rs 25 billion to companies under non-cash settlement.

“The PML-N government has paid Rs 270 million to power companies without deduction of withholding tax on their profits and paid Rs 85 million extra to power companies under terrif regime while violating the decisions of the Economic Cooperation Council (ECC). Almost Rs 33 billion were paid under these power projects, which were out of order for the last several years and unable to generate power”, the report added.

The report further says that illegal payment of Rs 29 billion was made in connection with the purchase and supply of gas because these companies did not purchase gas from the concerned production companies. The government gave Rs 19 billion to these power companies in connection with the General Sales Tax (GST), while Rs 3 billion extra was paid to these power companies to enhance the capacity building.

The report reveals that the government paid Rs 3 billion extra to North Power Generation Company against the company’s claim.

The news agency said that the AGP asked the government to establish financial discipline in the greater interest of the country and for resolving the issue of circular debt on permanent basis. The AGP also directed the government not to pay extra money in the name of late payment and to ensure recovery from power companies under liquid loss.

The AGP further said that performance of power companies should be monitored before payments in future.


  1. Many illegal denying people rights affairs are being conducted by present regime which are causing loss to public resources . AGP terming payments of Rs480 billion under circular debt illegal is not incident for the first time and no action has been taken against responsible persons . It is responsibility of ruling regime to clarify about malpractices .

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