Circular debt shaking foundations of economy: Zahid Hussain

KARACHI: President Pakistan Businessmen and Intellectuals Forum and All Karachi Industrial Alliance’s (FPCCI) Businessmen Panel Sr. Vice Chairman, Mian Zahid Hussain has said failed state-run companies continue to damage the country.

He said the matter should be resolved otherwise, the economy will never take off and the country will remain dependent on loans for survival.

Hussain further said masses have to pay trillion to keep these dysfunctional units running and keep jobs of the incompetent and corrupt.

The veteran business leader said that World Bank in a recent report indicated that the power sector gobbled up 45 billion dollars in a decade and that cost of power production is 25 percent higher in Pakistan as compared to regional countries because of wrong power purchase agreements.

He noted actual losses of the power sector may be double than the cited figure and the circular debt has increased to 2.2 trillion rupees despite the tall claims of ministers.

He said that dysfunctional power distribution companies were a gift to people of Pakistan by former Prime Minister Shaukat Aziz which has become a drag on the economy as their average losses are around 17.7 percent.

The business leader noted that the technical and commercial losses of the distribution companies are running in billions which the government also pays billions in fine to IPPs due to late payments.

The policy of generating power from costly imported fuel has also dented masses and the economy significantly, he said, adding that power tariff should be adjusted according to ground realities and losses should be reduced by increasing transparency otherwise the power sector will bankrupt the country.