The Government has paid out about Rs. 400 billion as part of the outstanding circular debt to reduce the energy crisis confronting the country. This is good. However as Mr. Burki points out this has caused the fiscal deficit to rise to unsustainable levels. Secondly, since the unit capital cost of installing a one Megawatt oil fired power plant is around US$400,000 to US$500,000 this amount would have financed the installation of between 8000 to 10000 mega watts of oil fired power capacity. This is essentially equal to almost all the of the oil fired power plants in Pakistan put up by the IPPs. Now in lay man terms if the remaining amount on your home mortgage exceeds the value of your house despite payments being made for years, then one option is just to walk away and sell the mortgage on the open market at a fraction of the cost. I have two questions, first was the option of walking away explored and if so why was it rejected. Second, and this is more important, have these pay outs been audited to ensure that these payments are accurate and really outstanding dues.
Posted on: Mon, 12 Aug 2013 00:50:41 +0000
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