Power distribution companies have continued to show dismal performance with unbearable negligence and serious inefficiencies, affecting the worst electricity crisis throughout the country amid huge line losses and poor recoveries of bills'' payment.
According to official statistics of National Electric Power Regulatory Authority (Nepra), the line losses of Sukkur Electric Supply Company (Sepco) and Peshawar Electric Supply Company (Pesco) rose to 40.2 percent and 35.2 percent respectively in FY2010-11. Similarly, the electricity distribution companies of Hyderabad recorded 33.8 percent line losses and Quetta at 20.8 percent line losses. Multan with losses of 18.3 percent leads the distribution companies in Punjab. For financial year 2010-11, Nepra prescribed the target of 16.5 percent as cumulative line losses of all distribution companies but the actual losses were 19.6 percent, with "healthy" growth of 7.2 percent in Pesco, 5.8 percent in Hesco and 3.3 percent in Mepco, according to calculations made by experts.
They said that the story of shameful complicity and inefficiency does not end there. After having lost one-fifth of this very valuable resource to theft, the remainder is billed. The distribution companies failed to collect 11.5 percent of the billed amount, which comes to a massive Rs 67 billion in one year. The bottom line is that Pepco and its distribution companies are incompetent as well as complicit in the leakage of more than 30 percent of their revenue.
The government and Nepra, the regulator, continue to play this game of make-believe. The concerned ministry claimed that the government is cognisant of the situation and the culture of generation and distribution companies would be changed. The government does not penalise the companies and consumers who are responsible for causing these losses but incurred huge losses to pay money to these companies from its own pocket.
Over the three years in which the present government has been in power, nearly one trillion rupees, out of the tax payers'' pockets, have been poured into this bottomless pit.
Such mismanagement of generation, distribution and tariff determination, all embedded in a bedrock of corruption, is a serious crime and corruption.
The power sector continues to remain unable to break the shackles of the circular debt. The amounts payable by Pepco have reached almost Rs 300 billion, and approximately Rs 24 billion is being added to it every month.
Pepco''s failure to make payments to independent power producers ha s disabled them to pay for furnace oil, having already exhausted their borrowing limits with banks.
In the last few months, a number of IPPs had been forced to give notices of their intention to invoke sovereign guarantees of the Government of Pakistan. The government responded with arm twisting tactics, promises which remain unfulfilled, and part payments.
The crisis has been averted for a few weeks, until the same unaddressed issues create the same problem again but with increased severity. However, the government came up with an ad hoc injection of funds to buy another two weeks of relief, and then usual load shedding, disrupted industrial production, and reduced commercial activity and incalculable loss to the national economy.
Pakistan''s overall demand for power is estimated to reach 35000 MW by 2015, which will be more than twice of the currently installed dependable capacity. Every megawatt which has been added to the system over the past 3 years was planned, approved and commenced during the tenure of the previous government.