| GEO Business|
| Circular debt: PSO to be paid Rs41.4bn|
| Updated at: 2101 PST, Tuesday, June 15, 2010|
ISLAMABAD: Prime Minister Syed Yousuf Raza Gilani on Tuesday urged all the stakeholders to honour their commitments made during the energy summit and pay their outstanding dues of electricity to help reduce the circular debt.
The prime minister was chairing a special meeting held here at the Prime Minister's House to review the circular debt situation arising out of the pending payments to PSO (Pakistan State Oil).
PM Gilani directed the concerned ministries and organizations for closer coordination among all the stakeholders, including the provincial governments within the next few days to resolve the circular debt issue before it leads to any crisis.
The circular debt, he said, be regularly monitored on daily basis and the dues/claims of different organizations including, provincial governments be settled.
The prime minister decided to provide an immediate financial relief to the PSO amounting to Rs. 41.4 billion. The Ministry of Finance would arrange an amount of Rs. 31.4 billion while PEPCO would pay Rs. 10 billion.
Earlier, the Minister for Petroleum and Natural Resources briefed the meeting about gravity of the situation arising out of delay in payments to PSO by various power companies.
The Minister for Water and Power apprised the meeting of delay in payments by the provincial governments as per commitments made during the energy conference.
He also informed of the recoveries made by PEPCO so far from various organizations. He further opined that the issue of circular debt can only be resolved when the gap between the cost of production and the price of electricity is eliminated.
The Minister for Finance assured that the amount due against the Federal Government as per the Energy Summit decision would be cleared within the next few days.
Tahir Basharat Cheema, MD, PEPCO informed that PEPCO would be able to partially clear the PSO's bills from the recoveries made so far and likely to be made till the end of this month.
The meeting was also attended by Minister of State for Finance and Economic Affairs Ms Hina Rabbani Khar, Secretary Finance, Secretary Water and Power and Additional Secretary Petroleum and Natural Resources.