The Cabinet Committee on Energy (CCoE) today (Wednesday) would discuss revised Circular Debit Management Plan (CDMP) prepared by the Power Division.
According to the sources, the Finance Ministry said, the Power Division should use realistic assumption to see the impact on stock and flow of circular debt and accordingly, further mitigation measures may be proposed, if required.
The country’s circular debt has touched Rs2.5 trillion due to some deviations in the measures agreed with the lenders.
The Power Division had sent revised CDMP to the Cabinet Division for onward submission before the CCoE. The Cabinet Division, however, asked the Power Division to seek comments from the Finance Division before sending it to the CCoE for consideration and approval.
The sources said that the Finance Division has examined the plan where financial obligations of revised CDMP may be fulfilled by this Division under the following contents of the CDMP.
The Finance Division supports the revised CDMP subject to the following issues concerning the fiscal complication.
On subsidies, the Finance Division is of the view that the provision of electricity to the AJK will be made on bulk rate, which has already been approved by the ECC/Cabinet March 20, 2019, which may be implemented within 30 days after approval of the Revised CDMP.
After implementation, this will reduce the subsidy more than Rs50 billion annually.
The CCoE would also discuss Circular Debt Reports for November 2021 and December 2021 and monthly report of Power Plants Operated Out of Merit (Primarily for Security Constraints Economic Dispatched). The CCoE would discuss implantation Status of Master Agreements and the PPA Amendments with Wind IPPs and seat of Arbitration for Arbitration Proceedings with the IPPs under 2002 Power Policy.
The meeting would also discuss approval of Railway Traction Tariff for Karachi Circular Railways (KCR).