Sindh energy relief: Uncalled for

The Sindh government has been duly credited for its mostly proactive response to the coronavirus. The federal government has attracted due criticism on not taking a consultative and inclusive approach in dealing with the pandemic response. Politicking has continued in the times of coronavirus. Been so used to taking the lead, the Sindh government has presented a draft to the Governor, which will become an Ordinance soon, effective from April 2020.

Among many other relief measures, the provincial government has proposed exemption to partial relief in utility bills. Consumers billed for up to 260 electricity units, will not be required to pay for the power. Only one-fourth will be required to be paid for units between 250-360, with only those above 450 units be required to pay to the fullest.

Sindh has three power distribution companies – two of which Sukkur (Sepco) and Hyderabad (Hesco) are owned and run by federal government. The other one is K-Electric (KE), a private entity, which caters to 20 million. Remember that 78 percent of power consumers fall under the category of 0-300 units – which essentially means that almost the entirety of consumers in Sepco, Hesco and KE, will not be paying for April consumption – should the draft become an Ordinance.

This takes out around 2.2 billion units, most of which will go unpaid. In monetary terms, that is a jolt of Rs26 billion for a month alone. One wonders which provision in the constitution gives Sindh government the right to trespass into what is strictly a federal domain. Expect the federal government to disregard the provincial announcement, and what will follow is mistrust and miscommunication.

It is worth mentioning that Sepco and Hesco are already on the high end of the transmission and distribution losses, with the lowest recovery. The step, in isolation will certainly create more panic and add to the fiscal burden and losses – some of which will have to be borne by other discos, in the form of tariff equalization, whenever the next tariff decision is taken. The Sindh government would do well to clear Rs50 billion of dues to KE alone – instead of further burdening – and more importantly created an unwarranted rift with the federation in such sensitive times.