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ISLAMABAD: The government is all set to establish Disco Support Units (DSUs), initially in Multan Electric Power Company (MEPCO) for two years, aimed at extending support to the companies to expedite recovery, curb theft and action against incompetent/corrupt officials, well-informed sources told Business Recorder.

The composition of DSU will be as follows: (i) Director - CEO of respective Disco; (ii) Co-Director - Sector Commander Civil Armed Forces (CAF); (iii) Officer one each to be nominated by the Commissioner & RPO of the Division in which respective Disco’s headquarters is located. If more than one Division exists in one Disco, the officers one each to be nominated by the Commissioner and RPO of the said Division may be co-opted in the DSU and; (iv). Members (BS-18/19-FIA, MI and ISI.

On July 5, 2024, Power Division informed the Prime Minister-led Cabinet Committee on Energy (CCoE) that after unbundling of WAPDA, power distribution business in Pakistan was entrusted to eleven Discos(excluding Karachi which is being served by a private company). The efficient management in these DISCOs), under Ministry of Energy (Power Division) has always served a challenge for the Government.

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According to Power Division, various models have been experimented in the past for bringing improvement in these DISCOs, but efforts to turn around these companies have not entailed any worth considering results. As a consequence, power sector has been beset with in-efficiencies. This has resulted in accumulation of circular debt in excess of Rs. 2.310 trillion as of June 30, 2023. The receivables of DISCOs have also piled up to the tune of Rs. 1.786 trillion, thus making the sector un-sustainable.

Power Division has also claimed that during Financial Year-2023-24, it is apprehended that these DISCOS may make a loss of around Rs. 589 billion which includes under recovery and loss above NEPRA’s defined threshold.

To strengthen its proposal of DSU, Power Division argued that these companies were created for corporatization and quick service delivery and it was envisaged that improvement would be brought about in the distribution system. However, due to rampant mismanagement, the whole process of reforms has been derailed. Resultantly, these entities have now become a constant source of bleeding for the national exchequer.

Power Division said that in order to minimize such losses, the Government launched a campaign on September 7, 2023 to check electricity theft and to effect recovery from defaulters. However, it is apprehended that DISCOs may not be able to bring desired results despite the support being provided by the Federal and Provincial Governments.

In order to ameliorate the situation, the proposal for establishment of Disco Support Unit was suggested in the Executive Committee of the Special Investment Facilitation Council (SIFC) on April 24, and May 13, 2024.

Power Division maintains that in order to strengthen the management of DISCOs and to have efficient monitoring, a DSU may be established in each DISCO at the headquarters level. In the first phase, a DSU may be established in MEPCO only. After evaluation of performance of this pilot initiative, same will be rolled out for remaining DISCOs.

Objectives/ToRs of the DSU will be as follows: (i) expedite recovery/anti-power theft plan of the respective Discos; (ii) reduction of non-technical losses through administrative interventions; (iii) support in improvement/ implementation of technical solutions; (iv) address administrative shortfalls by establishing interface with Law Enforcement Agencies and Civil Administration; (v) DSU shall directly report to Secretary Power Division while working within the mandate of respective Discos; and (vi) to recommend laying off of underperforming officials and officers on intelligence-based evidence.

Ministry of Interior/Ministry of Energy (Power Division) will requisite the services of LEAs under Article 245 of the Constitution and Section 4 and 5 of Anti-Terrorism Act-997 (as amended) and other relevant laws.

The proposals, sailed through the CCoE, will be implemented after ratification of the decision by the federal cabinet.

Copyright Business Recorder, 2024

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