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Rs 480bn circular debt clearance takes Senate body by surprise

ISLAMABAD: The Senate’s Standing Committee on Finance, Revenue and Privatisation has showed serious concern over rising power sector circular debt to the tune of Rs 321 billion in just three years and held Ministry of Water and Power responsible for the same.

The meeting, held at the Parliament House on Thursday under the chairmanship of Senator Saleem Mandviwalla, discussed the issue of clearance of Rs 480 billion power sector circular debt “in a haste”.

It was told that the Ministry of Water and Power on June 21, 2013 had sent a summary to the Economic Coordination Committee (ECC) seeking approval for making payments to independent power producers (IPPs). ” The ECC on June 28 gave approval and money was transferred to bank accounts of the IPPs on June 29, 2013,” said the ministry officials.

Committee Chairman Saleem Mandviwala said, “The ministry sent the summary to ECC on June 27, 2013 for clearance of Rs 480 circular debt and on the very next day, the ECC approved the summary and money was transferred to IPPs without any audit.”

Present at the meeting, Senator Mohsin Aziz said that government “had made a world record by clearing Rs 480 billion circular debt in a day”. “The government should adopt this attitude while making refunds to exporters,” he added.