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Due to poor economic conditions transmission and distribution T&D losses in power sector, circular debt in the last five years increased to Rs 711 billion.
According to USAID report for the Causes and Impacts of Power Sector Circular Debt in Pakistan in 2008 circular debt was Rs161.21 billion that increased to Rs235.65 billion in 2009. Similarly, circular debt in 2010 increased to Rs 365.66 billion and in 2011 this amount swelled to Rs 537.53 billion. During current fiscal year circular debt increased to Rs 872.41 billion.
Report revealed that poor revenue collection from the distribution companies in 2012 added Rs 86.90 billion into the circular debt while another amount of Rs72 billion added due to poor recoveries by HESCO, PESCO, SESCO and QESCO.
USAID report further stated that Rs197 billion are outstanding by private consumers under electricity bills which is major reason of current circular debt. Report said that during fiscal year 2011-12 Peshawar electric supply company limited (PESCO) have to receive Rs51 billion from its consumers while Hyderabad electric supply company limited (HESCO) has to receive Rs44 billion from consumers. Similarly, Quetta electric supply company limited (QESCO)’s liabilities are Rs48 billion, Lahore electric supply company limited (QESCO) Rs23 billion and Gujranwala electric supply company limited (GESCO) Rs5 billion.
Faisalabad electric supply company (FESCO) remained failed to collect Rs7 billion from its consumers and Islamabad electric supply company limited (IESCO) have liabilities of Rs2 billion with its consumers. USAID report informed that MEPCO consumers have not paid Rs14 billion in electricity bills and this amount is major element in circular debt.