ISLAMABAD: Revolving debt of Chinese power projects set up under CPEC has reached an all-time high of Rs 493 billion, with a three-quarter increase in these debts recorded in the last seven months.
By the end of January, the loans of Chinese power generation and transmission projects have reached 493 billion rupees, while in June last year these loans were at the level of 214 billion rupees, thus during the last seven months these loans have increased by 77 percent. , the Chinese government has been pressing repeatedly through diplomatic channels for these payments and this issue has reached the verge of having negative effects on Pakistan-China economic relations.
It should be noted that last month, China made $600 million in trade debt conditional on payments of Chinese power plant liabilities.
It may be recalled that the Pakistani authorities had agreed that Pakistan would establish a revolving fund and deposit 21 percent of the invoices submitted by the power companies into it, but the authorities have failed to do so, leading to an alarming increase in revolving debt. Instead of establishing a fund, Pakistan has opened a Pakistan Energy Revolving Account of 48 billion rupees per year in the State Bank, from which 4 billion rupees can be withdrawn per month.
Sources say that the government has sanctioned the payment of only Rs 4 billion, which shows the government’s lack of seriousness in solving the problem.
According to a report, out of 493 billion rupees, Pakistan has to pay 97 billion rupees to the Sahiwal Power Plant powered by imported coal, 82 billion to the Hub Power Project, 80 billion to the Port Qasim Power Plant and 79 billion to the Tharcoal Project. The government has been pressing repeatedly through diplomatic channels for these payments, and the issue has come to the brink of adversely affecting Pakistan-China economic relations.
