Rising circular debt to badly hit production activities: Islamabad Chamber of Commerce and Industry

Islamabad, January 09, 2015 (PPI-OT): Islamabad Chamber of Commerce and Industry has shown great concern over the rising circular debt that has again swelled to Rs.280 billion and called upon the government to take urgent measures to address this serious issue as left unattended it would badly hit production activities and would send the economy into further slump.

Muzammil Hussain Sabri, President, Islamabad Chamber of Commerce and Industry said that due to the persistent energy crisis, industry was already operating far below its actual capacity and the rising circular debt would give rise to load shedding and cause further reduction in production activities leading to drop in exports and slowdown in economic activities.

He said the main cause of swelling circular debt was poor recovery of electricity bills due to which receivables have risen to Rs.576 billion. He said owing to poor recovery of electricity bills by DISCOs, the power system was sustaining huge annual loss of Rs.100 billion and if this worsening situation was not arrested, the whole power system would paralyze.

He said China has promised to invest more than $33 billion in Pakistan’s energy sector to generate more than 16000MW of electricity, but was afraid that without urgent and drastic overhauling, the present crumbling power infrastructure would not be able to sustain additional power load.

Muhammad Shakeel Munir, Senior Vice President ICCI criticized the inefficient performance of power transmission and distribution system which was incurring huge losses of up to 20 to 25 percent on account of poor infrastructure, mismanagement and power theft.

He said the nine electricity distribution companies suffered line and administrative losses of more than 16 billion units during 2013-14 and cost national economy a staggering financial loss of Rs.211 billion. This state of affairs calls for urgent measures to remedy the situation.

Muhammad Ashfaq Chatha, Vice President ICCI said that power load shedding was again on the rise due to which business activities were suffering and people were facing great problems. He urged that government should increase power generation on top priority basis by utilizing alternative sources of energy including hydro, solar and wind to provide electricity at affordable rates.

He stressed that government should remove all impediments in the way of speedy generation of electricity so that with the improvement in power supply, business and industry could flourish and contribute more effectively in the fast revival of the economy.

For more information, contact:
Khalid Chaudhry
Islamabad Chamber of Commerce and Industry (ICCI)
Chamber House, Aiwan-e-Sanat-o-Tijarat Road,
Mauve Area, G-8/1,
Islamabad, Pakistan
Tel: +9251 225 0526, 2253145, 8432676
Fax: +9251 225 2950
Email: icci@brain.net.pk
Website: www.icci.com.pk