ISLAMABAD: As the total circular debt of the power sector is estimated to have crossed Rs1.2 trillion, the power division has set specific targets for distribution companies to recover arrears from previous bills and ensure 100pc recovery of current billing.

A meeting, presided over by Federal Power Minister Omer Ayub Khan on Friday, set targets for six distribution companies (Disco) for collection of Rs83bn of past bills and asked them to ensure 100pc recovery targets for current electricity billing.

The meeting was also attended by Nadeem Babar, chairman of the Energy Task Force appointed by the prime minister, and chief executives of the Pakistan Electric Power Company and Discos concerned.

“It was decided to freeze the figures of old receivables as on Oct 31, 2018, with targets to achieve 100pc recovery of current billings besides reducing line losses as per the goals set by the National Electric Power Regulatory Authority (Nepra),” said an official statement.

The decision is part of ongoing negotiations with the International Monetary Fund (IMF) officials for a fresh bailout package that requires creating over Rs140bn fiscal space from the power sector through recovery of old bills to minimise the circular debt or else the government would need to further increase power tariffs during the current year.

The minister directed CEOs to end theft and illegal hooking of electricity and take strict action against those involved in it with the help of the Provincial Task Force established in Punjab and Khyber Pakhtunkhwa.

Informed sources said that the total outstanding bills payable by consumers including public and private sector stood at about Rs870bn and that was the major reason for repeated increases in circular debt.

The power division also directed Discos to ensure that defaulters did not use electricity through hooking and operation must be intensified without any fear or favour.

The meeting assigned specific targets to Discos.

For example, the Lahore Electric Supply Company was given the target of recovering Rs25bn additional funds from January to June 2019 from consumers against old bills, in addition to ensuring 100pc current collection. This will be achieved through Rs8bn recovery from running defaulters, Rs11bn from disconnected defaulters, Rs3bn deferred cases and Rs3bn saving through one per cent reduction in line losses.

Likewise, the Peshawar Electric Supply Company (Pesco) was given the target of extra recovery of Rs41bn above the full current billing. It was tasked to recover Rs25bn from running defaulters, Rs10bn from disconnected defaulters besides Rs6bn saving by reducing line losses by 4pc.

Pesco will also ensure removal of hooks (Kunda) within two months and SDOs, XENs and SEs concerned shall be held responsible for this. Pesco will launch an awareness campaign to educate consumers that their wrong bills will be corrected and meters will be installed instantly after payment of dues which will also lead to reduction of load management hours in their areas.

The Multan Electric Power Company (Mepco) was asked to ensure extra recovery of Rs10.2bn by reducing line losses to Nepra target of 15pc and recovery of old receivables including Rs6bn from disconnected and Rs2bn from running defaulters.

The Gujranwala Electric Power Company (Gepco) will ensure extra recovery of Rs3bn and reduce line losses by 1pc.

The Islamabad Electric Supply Company (Iesco) will also ensure extra Rs2billion collection by recovering old receivables besides bringing line losses at Nepra’s targets of 8.65pc.

The meeting warned that recoveries should be made against outstanding bills and there should be no overbilling or unfair means be adopted for achieving these targets.

A joint secretary of the power division and management of Pepco were directed to evolve a comprehensive monitoring mechanism to ensure that all CEOs personally supervised the drive against theft and shall meet the district administration in this regard.

The total circular debt currently stood at about Rs1.2 trillion including Rs566bn fresh flow and Rs582bn old stock parked in the power holding company. The power sector authorities believe that line loss and lower than billed recovery are causing about Rs202bn and Rs205bn, respectively, circular debt every year.

Published in Dawn, November 17th, 2018