WASHINGTON: The death of 1200 citizens during the recent heat wave in Karachi has underlined the urgency to reform the country’s power sector, says Harald Finger, the head of the International Monetary Fund’s mission to Pakistan.

“The Karachi situation underscores the urgency of addressing the situation in the power sector. Loss of lives in Karachi was deplorable,” said Mr Finger while addressing a teleconference in Washington on Thursday.

The International Monetary Fund mission chief said that power distribution companies should be privatised on priority basis to end rampant power outages plaguing the country.

“The performance of the distribution companies should be increased … line losses should be reduced,” he said.

Mr Finger said that the targets set for electricity bills recovery had not been met and the circular debt of the power sector had reached Rs 615 billion at the end of March this year.

This includes Rs335 billion stock of the power sector arrears that has been parked in the Power Sector Holding Company Limited.

The government, however, has assured the International Monetary Fund that it would recover electricity bill dues.

The power sector, Mr Finger said, was still not operating at cost recovery and accumulation of payables was preventing the system from functioning at its full capacity.

He also underlined the need for administrative reforms in the FBR, adding that there’s a need to continue with reforms in tax administration.

Published in Dawn, July 4th, 2015

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