ECC defers circular debt payment to IPPs

April 8, 2021

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The Economic Coordination Committee (ECC) of the Federal Government has postponed the decision to pay the first tranche of circular debt payment to Independent Power Producers.

However, the committee approved a 25 percent reduction in manpower of Pakistan International Airline (approximately 3,500 employees) which is expected to cost roughly Rs. 13 billion.

According to the newspaper Dawn, the ECC meeting, chaired by the Federal Minister of Finance, Revenues and Industry and Production Hammad Azhar, also approved the dismissal of employees of power generating companies (Gencos) who had surpluses after the closure of power plants. 1900 MW but its No decision has been made on pensions and benefits.

Officials from the Energy division said they had completed all paperwork for the first payment of 85 billion rupees of the 4.3 trillion rupees owed by IPPs under the Tariff negotiation process.

He said that the ECC had not considered the summary of the energy division in which the National Accountability Bureau (NAB) had clarified that its investigation was not an impediment to the payment that is a routine procedure of the Ministry of Energy.

Officials said Finance Ministry officials were unwilling to take the blame, while the Energy Division insisted that the tariff negotiations were conducted by a government team and through an implementation committee made up of various ministers, thus that a joint decision must be made.

On the other hand, the Cabinet Economic Coordination Committee also seemed unwilling to make any decisions due to NAB’s involvement and wanted a clean note from the bureau.

It should be recalled that, according to the agreement reached by the government on February 28, the payment of approximately 85 billion rupees to 19 IPPs could not be made despite the expiration of the deadline.