Power sector budget based on assumptions: PEW
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Ignoring ground realities can result in acute energy crisis
The Pakistan Economy Watch (PEW) on Wednesday said power sector budget is based on assumptions of the policymakers which will not improve situation but result in acute energy crisis compromising GDP growth.
Government has expected a lot from dysfunctional power sector which will prove wrong by the passage of time, it said.
A modest amount of Rs 115 billion has been allocated for Wapda and Pakistan Atomic Energy Commission, subsidy of PEPCO has been reduced by almost Rs 90 billion while nothing has been earmarked for retiring the circular debt assuming that power sector is capable enough to handle it, said Dr. Murtaza Mughal, President PEW.
Circular debt has reached to Rs 300 billion which cannot be handled without intervention of the federal government, he said.
Dr. Murtaza Mughal said that how can power sector start functioning properly in absence of any meaningful reforms, improved transmission and distribution system, capacity building, infrastructure improvement and containing theft as annual losses of this critical sector have reached to Rs 280 billion.
Slashing subsidy and enhancing tariff is being taken as resolution of all the ills of the limping power sector which is a grave mistake, he warned.
He said that government should reduce allocation for Railway which stands t Rs 77 billion and NHA which is 112 billion rupees to pump that money in energy sector as the private sector is ready to investment in motorways.
He said that in the current scenario power companies will have no option but to milk masses to overcome losses and settle circular debt.
Government has been offering exceptionally handsome returns to investors in the energy sector which will boost power prices at an unprecedented level, said Dr. Mughal.
