ISLAMABAD: Pakistan has assured International Monetary Fund that it does not plan to allocate additional budget to settle Rs 493 billion dues of Chinese power plants. Global lender is also questioning efficacy of power sector’s anti-theft campaign.

IMF inquired about government’s decision on allocation of funds for Chinese power plants over and above budgeted amount of Rs 48 billion for this fiscal year, said officials of Ministry of Energy.

They added that IMF was informed there was no plan to approve additional funds for retiring outstanding debt of Chinese power plants. Outstanding dues of power projects of China-Pakistan Economic Corridor alarmingly increased to record Rs 493 billion or $ 1.8 billion as of end January.

Amount was Rs 214 billion or 77 percent higher than June last year. Sources said IMF appeared sceptical about long-term success of government’s anti-theft campaign and military’s involvement in monitoring performance of power distribution companies.

Energy Ministry officials said IMF believes anti-theft campaign can work only in short term and government needs to focus on digital monitoring of power distribution network. IMF was informed that circular debt increased by Rs 378 billion during first half, jumping to Rs 545 billion by end March.

Energy Ministry explained government had to seek price increase due to using expensive fuels during winter for electricity generation. High-speed diesel, furnace oil, and imported gas were used due to faulty policy of allocating cheaper local gas to other sources. Sources said IMF has also sought fresh timeline for ending agriculture tube-well subsidies in Balochistan.

Government also faced questions about record Rs 7 per unit increase in electricity prices in March due to Energy Ministry’s faulty policy of using expensive imported fuels, according to sources.

Fund is sceptical about government’s claim of restricting losses due to non-recovery of bills to Rs 263 billion in this fiscal year, as amount has already almost reached Rs 200 billion in just seven months.

This has serious implications for restricting overall circular debt to Rs 2.31 trillion by June this year.

Published in The Daily National Courier, March, 18 2024

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