PEPCO liabilities crosses Rs400 billion mark

PEPCO liabilities crosses Rs400 billion mark

Tuesday, January 24, 2012: Pakistan Electric Power Company (PEPCO) sinks deeper into debts, as the outstanding liabilities of the government owned firm crossed the Rs400 billion mark.

The aforementioned figures were confirmed by Rasul Khan Mahsud, the managing director of PEPCO and the National Transmission and Dispatch Company (NTDC). The managing director of PEPCO held a press conference in Lahore where he
was joined by members of Pakistan Textile Mills Association, the largest textile lobby in the country.

Though, Mahsud refused to lay an exact figure of the amount due by PEPCO, nonetheless, he admitted that the companies circular debt has crossed Rs400 billion.

Mahsud said, “Yes, it is true that Pepco’s circular debt has crossed Rs400 billion, but I am not in a position to state the exact figures or the gap between receivables and payables.”

Paying a liability of over Rs.400 billion will be a hefty task for even a company with such a magnitude as PEPCO. However, there is a silver lining for the state-owned firm, the companies net receivables from power distribution
companies at the end of December, 2011 stood at Rs375 billion, meaning the gap of Rs25 billion between payments and receipts.

Mahsud signified that not all of the receivables from the power distribution companies may come through, therefore the gap between the two entities may widen to Rs70 billion. Many consumers are refusing to pay the fuel adjustment
surcharge for June and July of 2010, during which the nation’s power plants were forced to produce power with more expensive fuel .

The difference between liabilities and receivables are pretty much interrelated.  All eight of subsidiaries of Pepco have let billions in unpaid bills from customers pile up. As a result of, Pepco cannot pay the power generation
companies, which in turn cannot pay the oil companies, who in turn cannot pay the refineries, which in turn cannot pay the oil marketing companies.

Due to piling debts, Pakistan State Oil (PSO) has already reduced its supply of Oil by 30 % to many power producing companies forcing the energy crisis in the country to get even worse.

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Posted by Wajahat Javed on Jan 25 2012. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry