ISLAMABAD: The Senate was informed on Friday that K-Electric was operating without any formal agreement since 2015 and the accumulated payables against the country had climbed to Rs490 billion till December 31, 2022.

Minister for Power Khurram Dastgir Khan told the house during the question hour that efforts were under way to resolve payment issues with K-Electric and a new agreement was expected to be signed in the next few weeks.

He said with a view to resolving various issues between the government and K-Electric, including the recovery of pending amount, the Prime Minister Office has set up a task force under the chairmanship of PML-N leader Shahid Khaqan Abbasi.

“Once the task force finalises its recommendations for recovery of pending dues, the same will be adopted after approval of the federal cabinet accordingly,” he said, adding that dues against K-Electric had started accumulating since 2015.

Oil shipments from Russia may start from April, says Musadik

In reply to another question, Mr Khan said the government was providing electricity to five export-oriented sectors at Rs19.99 per unit to boost the country’s exports. He said the government was taking steps to generate low-cost electricity in the country.

The minister said the government had abolished sales tax on solar panels and it was introducing solar projects as alternative to fossil fuels in energy production.

The minister said the federal government buildings were being solarised and micro-solar grids were being introduced in rural areas to provide low-cost electricity to the masses.

Oil import from Russia

In reply to a question about import of oil from Russia, the Minister of State for Petroleum Musadik Malik said commercial terms would be finalised by the end of March. He said soon after that the country would start importing oil from Russia and the first oil shipment was expected to arrive in April.

He said the contract with Russia for import of oil would help the country meet its 20 per cent crude oil import requirements. Answering a supplementary question, he said import of oil from Iran would be difficult due to US and European countries’ sanctions against Tehran. He said some trade was going on with Iran on barter basis.

The Minister of State for Law and Justice, Shahadat Awan, informed the house that work on Diamer Basha dam, Mohmand dam, Tarbela 5th extension, Harpo hydropower project and Attabad Lake hydropower projects was on track and assured the house that these projects would be completed in time.

He said that after completion, these power projects would generate 6918MW electricity. He said these dams would also boost agriculture production by bringing more land under irrigation.

Decline in FDI

The government and the opposition traded barbs after Parlia­mentary Affairs Mini­ster Murtaza Javed Abbasi informed the house that the net foreign direct investment (FDI) had decr­eased by 58.7 per cent

during the current financial year (July-December) as compared to corresponding peri­od of 2021-22.

The minister said the net FDI had decreased to $460.9 million from $1,114.8m as compared to corresponding period 2021-22. Quoting from the State Bank of Pakistan (SBP) data of 2021-22, he

said the net FDI stood at $1,867.8m, which was 2.6pc higher than the amount of $1,820.8m in 2020-21.

In February 2022, the FDI decreased 33.7pc to $90.8m from $137.0m and the net FDI during July-October 2022 decreased to 45.5pc to $396.0m from $726.5m.

Highlighting major reasons for the FDI decline, he said they include Covid-19 pandemic, high cost of doing business in the country; macroeconomic pressures such as the current account and balance of payment deficit; and disruption of food supply and energy prices due to the war in Ukraine.

PTI Senator Faisal Javed said the reasons stated by the minister for the sharp decline in FDI were not acceptable.

He said althought the government had claimed Covid-19 was one of the reasons for decrease in the FDI, an upward trend had started during the pandemic. “This is an issue of trust deficit.”

Murtaza Javed Abbasi bla­med the PTI government’s policies for the decline in FDI.

Published in Dawn, February 4th, 2023