Power sector and Caretaker: what lies behind those dark curtains?

Where the political carcass of the country eagerly needs a caretaker government, those who are unanimously selected need to bear one thing in mind amongst others: the energy sector baggage that will tag along.
For one, those at the rudder will have to deal with the financial constraints brimming with the circular debt which has crossed Rs450 billion. The entanglement left behind by the government that had the longest time to tackle with it - the five year tenure - is costing the power sector fortunes for years now.
Besides, with the caretaker government taking its position, the rise in the long due power tariff is inevitable. On an average the power tariffs have inched up by 15-20 percent annually for the four-year period FY09-FY12 and have remained stagnant since the beginning of FY13.
In an attempt not to shoo away the prospective voters, the governments pressure on Nepra is evident. The interim setup should be ready to decide how to tackle this unpopular measure where Discos have long proposed a raise by Rs2 per unit.
Regardless of the timings, the tariff rise is also unavoidable because of the whopping rate at which the subsidies to the sector have eaten up the finances. Subsidies to the power sector for the four-year period from FY09 till FY12 exceed one trillion rupees, which is approximately three times the total budgeted amount and are inadequately targeted.
Basically, the power sector is inflicted with three types of losses apart from the strain on the cash flows from the ongoing circular debt nuisance. The inefficiencies of Gencos, system and mechanical losses in the transmission process, and the distribution losses of Discos like theft, pilferage and meter tempering. These T&D losses of around 20 percent fare poorly against the international standards of around 6-7 percent.
With such high T&D losses, inefficiencies and excruciating subsidies, the promise of power sector reforms seems superficial and remains unfulfilled to date. The responsibility on the interim setups shoulders will be tremendous, and common sense suggests that circular debt resolution should be on the first few rungs of the priority ladder.