During the eleven-month period, electricity distribution companies (DISCOs) contributed Rs 374 billion in circular debt, including losses and inefficiencies, without recovering bills, adding up to 95% of the overall debt total of Rs 394 billion. stock
Losses and inefficiencies of DISCOs stood at Rs 125 billion, while low bill recoveries added Rs 249 billion in July-May 2022-23.
A breakdown of circular debt additions also shows that while Rs 87 billion has been attributed to interest payments to power generators for delayed payments, the government currently owes the generators Rs 1.77 trillion.
Additionally, Rs 58 billion in circular debt has been added due to interest payments to banks on Rs 765 billion parked in a power holding company.
To address this issue, the government has imposed a debt servicing surcharge of Rs 3.23 per unit, which is bearing the inefficiency cost of power consumers.
Further, 171 billion was included in circular debt due to delay in recovery of generation cost through quarterly and monthly fuel charge adjustment. K-Electric’s non-payment added an additional Rs 57 billion to its debt stock.
