Power Sector Problems | Editorial

Power sector remains beleaguered with serious problems. Over the last five years, a concerted effort was made to enhance electricity generation which greatly helped overcome demand and supply gap but nothing was done to address core issues of the sector be it improving the transmission system or checking line losses, power pilferage and ensuring recoveries. This is the reason that circular debt today is running into hundreds of billions of rupees.
Minister for Power Division Omar Ayub while chairing a meeting of the power division on Friday directed the six power distribution companies to ensure hundred percent recovery of current electricity billing and check power pilferage and line losses. Indeed these are important steps to bring improvement in liquidity of power sector and address the issue of circular debt on sustainable basis. Though we have no doubt over the capabilities of Omar Ayub who has necessary experience in finance related matters yet it is a gigantic job for which he will have to take difficult decisions and initiate action without any discrimination. In the past we had seen relevant ministers issuing big statements but the end result remained zero as the operation was only restricted to small and poor consumers not touching big culprits. As regards the issue of power sector receivables, they stood at about Rs 900b till August this year. Big companies in private sector as well as federal and provincial government departments owe billons of rupees to power sector and it is time to recover the amount first from these big companies, factories, industries and departments before taking action against domestic consumers.
Similarly, the operation against power pilferage should kick start from big factories and industries. For this the power division can seek the assistance of security and intelligence agencies to nab those stealing the power. If the government succeeds in recovering the amount from big defaulters and checking the power theft, it can largely address the issue of circular debt. This will also help the government to extend relief to those honest consumers, by reducing the power tariff, who are currently paying inflated bills for inefficiency of the system. At the same time, the government needs to embark upon a comprehensive programme for upgrading the transmission system which will help substantially cut line losses and efficiently manage the new generation coming in the system.
Source: https://pakobserver.net/power-sector-problems/

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