ISLAMABAD: The Power Division on Monday reported increasing power losses and receivables, lesser recoveries and almost unchanged electricity demand, supply and shortfall situation over the last one year while attributing most of the sector’s ills to the absence of political will to address chronic crisis.

“There is culture of collusion and corruption in the (power) system that we consider a part of the governance problem,” Secretary Power Yousaf Nasim Khokhar summarised as his team explained with presentations how the power sector receivables maintained a steady increase from Rs589 billion in 2015 to Rs779bn as of June 4, 2018, up 32.25 per cent.

Mr Khokhar, who had gone on leave for almost two weeks before the completion of PML-N term to avoid controversial decision making, also reported that average electricity shortfall stood at 4,530MW in July 2017 and remained almost unchanged at 4,559MW in first week of June 2018.

This almost nullified the daily power demand and supply figures released by the Power Division to the media that never reported more than 3,000MW shortfall.

In fact, an official told a senate committee that the shortfall peaked 5,000MW a few days ago.

In one of the presentations to the Senate Standing Committee on Power, the Power Division said the private sector receivables of the sector surged by 46pc to Rs633bn last week from Rs434bn at end-June 2015. The increase appeared strange in view of disconnections by the distribution companies (Discos) on default beyond two months by common consumers.

Shortfall rises, recoveries drop, as Power Division blames provincial govts for ‘culture of corruption and collusion’

The Power Division said receivables against disconnected defaulters stood at Rs99bn.

The committee meeting, presided over by Senator Fida Muhammad, was also told that government sector receivables stood at Rs156bn in 2015 against Rs146bn this month. However it was not shared that the drop was caused by the Rs50bn write off allowed by the PML-N government to Sindh government in 2016 on a summary moved by then Secretary Power Muhammad Younas Dagha.

Otherwise, the power sector receivables from government sector increased by 8.33pc to Rs169bn in 2016 and fell 32pc to Rs115bn in 2017 as part of a massive write off. These nevertheless jumped 21pc again to Rs146bn during the current year and still counting.

On the other hand, private receivables increased by 8pc to Rs469bn in 2016, followed by 18.3pc increase to Rs555bn in 2017 and another 14pc rise to Rs633bn in 2018.

The secretary explained that average demand in July 2017 stood at 21,540MW, rising to 23,301MW a year later in June 2018, an increase of 8pc compared to 10pc increase in generation, which is 18,742MW now instead of 17,012MW in 2017. But shortfall on the other hand, increased slightly to 4,559MW instead of 4,530MW. He said the shortfall should have been lower but almost 3,000MW less generation was available this year from hydropower plants due to abnormal water shortage that had a drastic impact on power supply.

Mr Khokhar said the culture of collusion and corruption was so entrenched that the federal government was finding it difficult to run distribution companies. He said he personally contacted provincial governments, the former federal power minister wrote to the chief ministers for meetings to address theft and recovery issues, but the provincial governments did not even bother to respond to the letters.

It was in this background that former prime minister Shahid Khaqan Abbasi proposed that Discos should be taken over by the provinces that should distribute electricity and be able to make recoveries. He said privatisation was the ultimate solution for the power sector but again the lack of political will hampered the process, otherwise four companies were ready with documentation to go into sale.

The secretary also told the committee that enough generation was generally available but the system constraints were resulting in inability of weak Discos to lift allocated power supply quota. It was reported by some Discos that technical losses ranged up to 25pc in some cases.

This was, however, challenged by Senator Nauman Wazir on technical grounds saying 15-20pc losses meant overheating of transformers and cables which should melt and fall down. He said advance metering and smart metering may not deliver in Pakistan’s society where kundas bypassing meters delivered electricity to consumers.

He proposed that the caretaker government and Senate should in consultations with experts prepare ground for leasing out feeders to local contractors who had the wherewithal to challenge local electricity theft. He said such experiences in Octroi collection had done wonders.

Mr Wazir, who has also served on boards of some Discos, said the instructions from the ministry of the government about power supply to certain consumer groups should stop immediately and instead boards and managements should be freed to take commercial decisions. In corporate management, shareholder has consider profit and not running of the company.

The committee was also told that overall system losses had increased by 0.4pc this year over last fiscal year and recovery of bills dropped by 3.6pc to 90.77pc. Peshawar Electric Supply Company (Pesco) had the highest percentage at 36.6pc losses, followed by 35.7pc of Sepco, and 19.1pc of Hesco.

Iesco was termed to be a Disco with lowest percentage of losses at 7.1pc.

The recovery percentage of Discos was also shared with the Committee with Fesco at 100pc recovery, Lesco, Gepco and Mepco at 98pc and Iesco and Pesco at 90pc.

Qesco was showed as the Disco with lowest recovery percentage at 24pc.

Published in Dawn, June 12th, 2018