ARTICLE PRESENTATION ³WHY THE FREE MARKET MUST REPLACE STOPGAP MEASURES´ BY: THE EXPRESS TRIBUNE

PRESENTED BY: MASHAL KHALID ID: 8602

It is a situation in which string of debtors and creditors exist, in a way that final net creditor is indebted to the final creditor. Every member is both a creditor and debtor.

PROBLEMS RISING TO CIRCULAR DEBT

y Power producers have stopped running on full

capacity due to default in payment by consumers.
y Corporate sector entities not being in complaince

with terms set.
y Government and several agencies do not make

payments in time.

Oil refineries and Importers (eg.Kuwait Petroleum Company, Parco, Bosicor) Oil companies and refineries PARCO (Crude Oil) & PSO (Furnace Oil) Power Generation Companies Electricity Distribution Companies KESC & PEPCO Customer

SOLUTIONS

y Swap the circular debt with new bonds, federal

government guarantee or loans.
y State Bank injecting money into the system to save it

from choke up.
y Residing the problem of outstanding bills of different

public entities.

y Theft of electricity and loss should be reduced from

40% to as less as possible.
y The 3 major stakeholders in the power sector PSO,

PEPCO and IPPs should make genuine effort to keep their accounts free of outstanding bills as much as possible.

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