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LAHORE: Defaulters of 10 distribution companies (Discos) owed Rs 1.6 trillion countrywide due to uninspiring recovery efforts by their managements. The colossal amount if added to the current circular debt of Rs 2.4 trillion makes up a hefty percentage of the national GDP.

The latest state of industry report, issued by National Electric Power Regulatory Authority (Nepra), has pointed out that the receivables of Discos have reached Rs 1.4 trillion on 30th June 2021. However, Pakistan Electric Power Company (Pepco) sources, requesting anonymity, said it has spiraled to 1.6 trillion in five months of current fiscal year.

It is worth noting that the federal government departments owed Rs 17 billion to Discos, followed by Rs 89 billion by the Azad Jammu & Kashmir government, Rs 188 billion by provincial government departments and agencies, Rs 39 billion by domestic consumers in federally administered tribal areas, Rs 354 billion by agricultural tube wells in Balochistan, Rs 1.07 trillion by private entities in the country, Rs 4 billion by Independent Power Producers, and Rs 224 billion by K-Electric.

Discos have interestingly shown an improvement of 8 percent in recovery, as the ratio stood at 97 percent in June 21 against 88 percent in June 20. However, sources said Discos have hidden their inefficiencies behind the phenomenon of percentage while avoiding reporting recovery in figure terms. They further said that the accounting method of Discos avoids differentiating recovery of current bills from recovery out of recurring defaults. Therefore, the recovery percentage shows improvement due to the mixing of two heads but the actual situation becomes bleak when actual recovery against consumers is examined minutely.

It may be noted that Discos like Iesco, Gepco, Lesco and Fesco carry two percent loss in revenue collection while the losses of Mepco, Sepco, Hesco, Qesco, and Pesco range in between 28 percent to 39 percent. As a consequence, the earlier stock of the arrears towards defaulters increases by the day and which has reached the present figure of Rs 1.6 trillion.

Sources said majority of Discos are not serious in launching serious recovery campaigns. So much so, the task forces against power theft were earlier also found inclined towards making headlines by registering FIRs and issuing detection bills to defaulters who get bail from courts and deal with field staff within no time. None of the Discos has been allocated specific targets of recovery of old arrears by the Power Division of the MoE and nor have the Discos in turn allocated any recovery targets to their staff, they added.

They said a serious and concerted effort on the parts of Discos may recover Rs 500 billion within no time to reduce cost per unit by Rs 2.5 for consumers. They said a laid back attitude of former Energy Minister Umar Ayub and a non-serious attitude of the incumbent Hammad Azhar have also added to the poor performance of Discos. Power division has a lose control on Discos where corruption is rampant from bottom to top, they added. It is also said that the power division lacks technical expertise hence is not able to deliver. It is also seen that the BoDs are also not held responsible for the continuing pile-up of the default.

Meanwhile, independent circles have proposed outsourcing recovery of receivables to financial houses for a change in the situation on ground.

Copyright Business Recorder, 2021

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