The Finance Ministry is unlikely to meet the demand of the Water and Power Ministry to provide Rs 45 billion to maintain uninterrupted power supply during the low hydroelectric power supply month of January, Pakistan Today learnt on Saturday.
An official source said if there were no violent street protests during the month, the Finance Ministry might altogether skip the release of any sum other than the monthly subsidy amount of Rs 10 billion. At present, thermal power generation stood at 8,300MW, said the source, and the Finance Ministry felt there was no need to spend an extra Rs 45 billion to bring it up to 9,500MW, which would still require up to 8 hours of load shedding every day.
In the current financial crisis, the government could not provide such a huge sum, as the delay in passing on the monthly fuel price adjustment and hike in power tariff had already piled up Rs 140 billion on the national exchequer, the source said. The Water and Power Ministry has demanded the release of Rs 86 billion to maintain power supply levels at 9,500MW during January. It based its assumption on payment of Rs 30 billion to Pakistan State Oil (PSO) for fuel supply, Rs 32 billion to independent power producers (IPPs) for fuel payment, Rs 19 billion capacity payment to IPPs, Rs 5 billion to gas companies as well as nuclear and hydroelectric power suppliers during the month.
However, the source said the Finance Ministry had finalised details of Rs 240 billion debt swap with the banks, under which debt of IPPs would be accommodated against their receivables from the Pakistan Electric Power Company (PEPCO). The government will lift their debt and transfer to a power-holding company that would later on be shifted to Central Power Purchasing Agency (CPPA). He said the swap would take place by mid-January and would resolve the issue of rehabilitation of credit lines to IPPs from the banks.
Delayed payment from the government to IPPs resulted in depletion of fuel reserves at the plants. The debt swap would remove a major hurdle of the IPPs, as revival of credit lines would enable them to stock fuel reserves. After the resolution of the debt issue, there was no need to provide the hefty sum demanded by the Water and Power Ministry, said the source.
