OVER the past few years, the efficiency or profitability of both Wapda and KESC are also being gauged by line losses incurred by these utilities.

Without trying to understand the reasons thereof, the public is being told by authorities that a major reason for continuing utility losses is the high line losses.

A top manager of a big power utility even tried to inflate the old figures in order to show his performance during 1999-2003. On the other hand, the KESC managers were happy enough to propagate that their success was around the corner.

Sadly, loan-giving agencies like the IMF, the World Bank and the Asian Development Bank have also been propagating the same reasons for the deficits. They link up disbursement of funds with the reduction in the line losses. As has been the case with other actors, these international finance institutions have never, in fact, gone into the details of problem.

The government has been insisting on reduction in the present level of line losses without actually going into the exact reasons or for that matter coming up with the required support.

So much so, that no covenants were signed with KESC’s new owners, the consequence of which, the utility looking after Karachi, bleeds as usual – all to the detriment of the consumers.

This is exactly the opposite of what the Indians did in the case of handing over New Delhi’s power system to the TATA-led public-private partnership, resulting in efficient functioning of New Delhi Power Limited.

What exactly is the situation? Are the existing line losses inordinately high?

According to official documents, duly substantiated by the statutory audit confirm that line loss level of Wapda for the period ending September, 2006 is 18.2 per cent, which, it is stated, is likely to settle around the figure of 21.5 per cent by the end of this financial year.

Similar documents, though un-audited for the KESC state that the loss level there would rest around 40 per cent by the end of the current fiscal. Looking at the historical data, the level of 21.5 per cent or so losses of Wapda is far less from 27.2 per cent seen during the fiscal 1999-2000.

Delving into DISCO wise loss position for Wapda, the same for FESCO, MEPCO, GEPCO, LESCO and IESCO ranges between 9.4-15.3 per cent(excluding transmission loss), which is much less than the whole average. These figures also lead to another fact i.e. the main losses are clustered in HESCO, QESCO and PESCO (inclusive of the tribal areas where bill payment is simply unknown).

As the situation in Sindh, Balochistan and the NWFP (specially the FATA and PATA areas) is totally different and the power system there is based upon inordinately long lines supplying power to basically rural areas with very small number of commercial and industrial consumers, the comparatively high loss level in these areas can be condoned.

That lawlessness in quite a big chunk of these areas is a factor simply beyond the sway of any utility. This simply disproves the current perception that line losses remain unbridled in Wapda.

In KESC, the losses have been hovering around 40 per cent since 2000 onwards with not much respite in the offing. The situation would only improve when the ‘kunda’ culture goes and the owners are able to make new investments.

The present figures, even those of KESC, are compatible with the ground realities, the system parameters, the present loading and lastly on account of the load growth of the last half a decade or so.

The situation can be improved if huge investment is made to upgrade the systems. This is a pre-requisite to any worthwhile attempt to correct things. After injection of funds, there is need to put in place proper HRM & HRD projects in the utilities, with the best of professionals managing the utilities.

What are the actual reasons that inhibit any reduction in the present line losses in case of Wapda and the KESC. In depth analysis reveals technical losses (which no amount of investment would reduce barring some change in technologies), technical loss on account of inordinate and incorrect loading of system, illegal extraction of energy and lastly, on account of inappropriate/inaccurate metering equipment and systems.

Another public perception that retains currency is that the metering of the utilities is tilted against utilities also needs to be looked into. It may be contributing up to 1–2 per cent to the total loss.

A very vivid dichotomy exists between the requirements and expectation of the public or power customers and their normal conduct and behaviour. Though demanding the best of service, they, in turn, would never fulfil their part of the deal. The power customer would enhance his load at will.

Another nuisance is the level of wastage evident around us. This, along with other ostentatious behaviours, has led to inordinate and surely non-productive peak hours demand which can not be catered for without huge investments in generation, transmission and distribution set-ups – all which is not forthcoming at all. This can be ameliorated through concerted conservation techniques.

The solution thus basically lies in the formulation of a national public policy which ensures standard, stable and affordable power for the consumers.

Massive investments through the government outlays and public-private partnerships in infrastructure projects, as against privatisation, would help resolve the issue. Stringent laws in support of the utilities would have to be enacted. Nepra as a regulator, along with the electric inspectorates would have to support the utilities in safe-guarding the existing power system and would also have to discipline the customer.

The utilities, on their part, would have to undertake necessary HRM and HRD activities to upgrade the existing structures and set for themselves the goals of implementing best utility engineering practices in the least possible time. They would also have to introduce new technologies.

In fact, the utilities would have to spear-head the formulation of the above mentioned national policy, prepare the concept paper for investment plans through the government outlays and also arrange for the most helpful public-private partnerships. It would again be the utilities which would educate and inform all stake holders about the various rights and obligations, with NEPRA acting as a neutral umpire in the first instance and as the regulator subsequently.

The utilities acting as commercial entities would have to provide the best of service at least possible cost. But profitability cannot be allowed pre-eminences, because as the Chinese say that profitable utilities herald a loss-making economy.

This does not mean that efficiency is allowed to slip to the back burner. The government would have to keep an eye (just an eye) on the utility operations and then chip-in in a big way, that is, if an efficient power system is required.