Crippling power outages: Cabinet body meets today to offer a remedy

ZAHEER ABBASI

ISLAMABAD: Prime Minister Yousuf Raza Gilani will chair the meeting of the Cabinet Committee on Energy today (Thursday) to discuss and find a way to lessen the crippling power outages in the country.

Sources said Finance Minister Hafeez Sheikh, chairman of the Cabinet Committee on Energy along with members of the committee Minister for Water and Power, Syed Naveed Qamar, Deputy Chairman Planning Commission Dr Nadeem ul Haq and Secretary Petroleum would brief the Prime Minister about outstanding dues against the provinces, various departments as well as line losses leading to severe load shedding for the last few days, triggering violent protests.

A meeting of the Cabinet Committee on Energy was held with Finance Minister Dr Hafeez Sheikh in the chair to discuss the situation and finalize presentation to be made to the Prime Minister on the issue. The official privy to the meeting said that various aspects leading to energy shortage in the country, and supply of gas to Gencos, receivables from the provinces, timely payment to Gencos and the fuel price adjustments were taken up. The meeting was informed that Rs77 billion have been stuck up on account of fuel adjustment price and over Rs300 billion against Sindh government. The committee also discussed electricity arrears against other provincial governments and evolve a strategy for regular payment of electricity dues.

The inter-ministerial committee would also brief the Premier about the implementation status of the recommendations finalized by the energy committee after weeks’ long deliberation with all the stakeholders and subsequently approved by the Cabinet meeting on October 12, 2011 to resolve the problem of circular debt, one of the major reasons for power outages in the country.

An official said the Cabinet Committee on Energy remained unsuccessful in implementing the measures approved by the Cabinet in letter and spirit for a host of reasons. As a result energy crisis continues to paralyze social life, production and economic growth and consequently escalating the fiscal deficit by dolling out huge amount from the budget for administrative, distribution and transmission inefficiencies of distribution companies. The recommendations have been approved by the Cabinet meeting some six month ago but the political support required for their implementation was not provided.

The official attributed the lack of political ‘will’ across the political divide major difficulty in resolving the energy crisis. He also quoted high-ups of various distribution companies complaining that provincial governments and local administration was not helpful in taking action against the people involved in power theft. An official of the Planning Commission said that power theft has been going on unchecked because of ‘dishonest staff’ of distribution companies who were also complicit in covering up their theft.

Sources said the power sector recovery plan finalized by the Cabinet Committee on Energy identified that the collection of Pepco system was 88% of the total billing, which means that Rs12 out of Rs100 billed were not being recovered. The non-recovery of 12 per cent billing has been costing Rs65 billion annually to the budget which the committee failed to rectify.

The committee also identified the KESC another challenge to the power sector as well as to the federal budget as annual cost of subsidy to the KESC was Rs66 billion on the budget.

The committee reportedly itemized delay in payment of tariff differential subsidy, non collection of the billed amount, higher electricity losses than allowed by National Electric Power Regulatory Authority (Nepra) and late surcharge payment as major factors contributing to piling up of circular debt.

The committee was directed by the Cabinet to put in place required measures including administrative changes in Discos to improve their efficiency to resolve the problem of circular debt. However, the half-hearted implementation of the envisaged measures for political consideration failed to yield positive results and the problem of circular debt, according to an official of Planning Commission, continues to creep up.

As a result, he said the government has to frequently inject liquidity for keeping the power plants in motion for supply of electricity to the people.