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Power Crisis: Why the debt keeps piling up?

Published Jul 20, 2012 07:58am


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If the circular debt is partly explained by the rising prices of oil internationally, another aspect is the domestic consumer who refuses to pay for the bulbs he lights and the air conditioners he runs.

And like any other business, the power sector cannot survive if the dues it is owed are not recovered.

The ministry of water and power concedes that the electricity distribution companies (discos) have to recover Rs375.73 billion from consumers.

But these consumers are not just errant individuals and tax evading businesses but also the government. This is an oft repeated story but such an important one that it has to be highlighted time and again.

No government, so far, has been able to make any of these institutions or sectors cough up - simply because of politics.

The private sector on the other hand owes Rs166.18 billion - these are mostly large commercial and industrial units that have piled up bills and then gone into litigation against the relevant Disco to avoid paying up.

And then there are powerful individuals. "Consumers who have to pay millions of outstanding electricity bills are well connected and influential," the official said adding that "We cannot even disconnect the supply to their installations - be it home or business."

Pakistan has nine electricity distribution companies and each one of them suffers from transmission and distribution (T&D) losses.

Of these, the losses of some are relatively low - from nine to 20 per cent. This includes Islamabad Electric Supply Company, followed by the three Discos of central Punjab. These are: Gujranwala Electric Power Company (GEPCO); Faisalabad Electric Supply Company; and Lahore Electric Supply Company (LESCO).

But this is the relatively good news.

Outside of upper and central Punjab, the default takes on grave proportions. Sindh and South Punjab are good examples of this.

Sukkur Electric Power Company (SEPCO)'s losses are 39 percent. Ironically, this disco was created as late 2010 to improve the power distribution network.

"There are frequent complaints of teams being held hostage or severely harassed by powerful people who are not paying bills," said an official of Sepco.

Hesco's woes are no different - though from 38 per cent two years ago, its leakages have dropped to 28 per cent. But this is only because its troubled areas were taken away from it and given to SEPCO.

"Hesco has to recover Rs26 billion from the Sindh government and Rs12 billion from private consumers - but political pressure stops us from disconnecting any connection," said an official.

"Recently we disconnected the power supply to Wasa and some other departments over outstanding bills of Rs2.38 billion but half a dozen MNAs and MPAs intervened. The politicians' argument was that their voters would get upset," said one official.

Incidentally, two cheques amounting to Rs300 million and Rs200 million have not been honoured by the banks - but still Sindh Government got the power supply to these banks restored.

Hesco operates in 12 districts from Hyderabad to Shaheed Benezirabad (old Nawabshah).

Similar problems are also faced in parts of Khyber Pakhtunkhwa.

High T&D losses are also experiences by Peshawar Electric Supply Company (PESCO) which supplies power to over 2.0 million consumers in Khyber Pakhtunkhwa; Quetta Electric Supply Company (QESCO) which covers the entire Balochistan Province and Multan Electric Power Company (MEPCO).

An official of ministry of water and power said that "If we look at all the poorly performing Discos - they all operate in remote but politically volatile area where the elites are very strong and powerful," the official said. The better recovery rate is enjoyed by DISCOs that operate in relatively more developed parts of the country.

The ministry of water and power has recommended that this problem can partly be resolved if the federal government deducts the amounts owed by the provincial governments from the federal funds headed to the provincial governments.

"Prior to 2007, we used to get the bills cleared from the federal government grants to provinces but now the provinces are taking years do so," the ministry of water and power official said.


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Comments (47) Closed

SHK Jul 20, 2012 10:58am
Smart meters should be implemented ,this will reduce the electricity theft .However these are very costly. the government shoud assist the KESC for its implementation
Zamzamay Jul 20, 2012 04:59pm
how do you know that the highest theft is in KPK? Are you quoting a public report that I am not aware of? Enlighten me...
Malcolm Michael Jul 20, 2012 05:00pm
How ironic it is to read that the present Prime minister was the Minister for Power his comments in the early years PPP Government coming into power, he claimed publicly that by the following year there will not be any shortage. Nothing happened . Now he is a PM so he is putting pressure on the same to use their best resources to generate more power. ? This is one of the technically unqualified person at the helm of such an essential Institution and that goes to others too. How can you expect results. As for those who do not pay be it Government or anyone why cant the PM of the country give clear instructions to the Companies generating power to cut of the lines of those not paying up timely without any fear. We all know this will NEVER be done or the Government will fall.
jalind Jul 20, 2012 05:17pm
10 days without electricity? my god. it could happen only in pakistan
Noor Jul 20, 2012 04:28pm
Addition to Gul's suggestion, those cards should be PREPAID, and the consumers need to buy the units and it should disconnect as soon as someone runs of out unit, same like mobiles....
jalind Jul 20, 2012 05:21pm
10 days without electricity? my god
Reality Bites Jul 21, 2012 11:06am
BTW, has anybody noticed that electricity in Pakistan is one of the most expensive in the world.
Tamoor Jul 20, 2012 02:26pm
Every citizen must pay their dues for the better good of society they live in.I live in western society. I pay 33% tax on my income so govt can run their operations. My electric company has my bank account information, and they automatically debit my bank account for the amount of bill i owe them each month. I have not seen an electric, gas, internet bill even once in last ten years. It's very sad that people who are stealing power, including govt offices who are utilizing it and not paying bills, are not being held accountable for that.
Sandip Jul 20, 2012 01:29pm
Not sure how this companies fall under political pressure? Only reason that would happen would be people hired to run the company owe favours to politicians, meaning people hired to run this companies are not qualified to run them?. It happens all across the board in South Asia and Pakistan is not the only country. When will people understand that not paying bills behaviour is not a good behaviour. May be they need to introduce prepayment option. Your meter runs as much juice as much as you have paid. No need to run for collection then. People will be running to pay there bills. Turning the tables around.
Sam Jul 20, 2012 10:01am
Pakistan have lots of gas reserves, why dont they use it for domestic power supply?
Sam Jul 20, 2012 10:00am
Why dont you use big gas operated electricity generators?Gas generators are very very common in Karachi for domestic use and completely get rid of KESC.
Ajamal Jul 20, 2012 10:00am
I agree with above. Our very decent locality of FB Area (one of best planned & developed along with N.Nazimabad) suffered the same fate. Open land areas were encroached upon, thereafter they were legalized and petty criminals started living there. Result, a decent living community turned into a slum, crime became common and kunda culture thrived.
DVSHAH (INDIA) Jul 20, 2012 10:00am
This is story in all our part of south asian conuntries. Politicians and builder mafias are generally do this for vote politics. Who settled there, they don't have choice to elect him/her. They should privatised electric companies to prevent huge losses and make recovering fast. This work well in India and you have similar issues we have in India. China or India are may be good option to resolve this but certainly no politicians will do it as have hidden interests.
Arif Jul 20, 2012 12:55pm
Problem is not only the President or PM, a large part of our citizens do not pay for electricity they use. They do not realize that they are committing theft and will be answerable for this theft at the day of judgement or by authorities here. No fear of being punished. Equally responsible are the corrupt officials who don't take any action against these defaulters. Don't expect any improvement unless we correct ourselves.
majeed Jul 20, 2012 11:39am
Most of these losses are occuring due to corruption of WAPDA officials. their officials take monthly fix amount and let people do whatever they want to with Kunda or fixing the meter. They need to be made accountable.
aliya Jul 20, 2012 11:19am
We would save a lot of electricity if we would cut off all supplies to the PM and President house, the Parliament, and to all the members of this despotic governament. They are all a waste of space and we would save millions of rupees .
shuaib Jul 20, 2012 12:26pm
Important point is that highest theft of electricity is in KPK, followed by Sindh and then baluchistan and at the end Punjab. In return Punjab is gifted with load shedding prize in both fuels i.e. electricity and gas. If someone could give figures, it would be interesting to learn that on clearing of electricity dues, Punjab is on first place. This poor and pethatic discrimination is called.....?
raika45 Jul 20, 2012 10:41am
All you need is a length of wire to bypass the meter, and you get free electricity.Your proposal will work where people are honest and law abiding.Unfortunately in this case the people are not.Unless you have honest ,diligent and "fearless"people at the helm, nothing much will change.
Shahan Jul 20, 2012 08:53am
The sick part is this that the people who DO pay the bills, they have to suffer. My father bought the house in Gulistan - e- johar, in a good locality, which was SUPPOSED to have govt land right in front of it. Then people encroached upon that land and made houses. PPP govt came and legalized that land. Now all of those houses are using KUNDAs from the transformer , from where we were taking the electricity. Because of the overload of these kunda connections, the wires-breaking-up was a daily event, that disrupted the electricity in the whole neighborhood. We. the people who paid bills, complained to KESC, sent the pictures and videos to KESC. No one heard our woes. And now the transformer crashed and got burned. So we don't have the electricity for the last 10 days. When we approached KESC, they told us, they will not fix it as there are outstanding bills against that transformer due to the kunda connections. These billions amount in millions! It appears that these power agencies are themselves involved in this crime! Who should we approach? Should we file a case against KESC for such misery? My mother's medicines need to be placed in refrigerator. But who cares? The last resort is to go for kunda connections? Perhaps it does not fit here, but yes, society makes a criminal out of a man! Why no action was taken against these kundas? Kese cars used to come and check our meters, while they never saw these hanging Kundas right above them ? Why no action is being taken by the courts against such criminal attitude shown by KESE or other power organizations?
Peace Jul 20, 2012 08:53am
We are prisoners of our own device. Most of us don't want to pay the electric bills, but would be the first to burn Government and private properties during so called " Ehtijaj" and " Muzahiras" for load shedding.
Gul Jul 20, 2012 08:53am
I think implementation of smart meters solve much of this problem (feasible?). The smart meters could be controlled centrally OR electronically through computer systems that automatically disable the meter that defaults - something like cable tv smart cards. In case of lack of funds for the implentation, it could be implemented using PFI (private funding) or PPP (public-private) initiatives.
Ejaz Jul 20, 2012 09:29am
Your problems encapsulate in a microcosm the predicament of the whole of Pakistan. We are being governed by a well organised kleptocracy.
jalind Jul 20, 2012 05:23pm
in what way china or india are good option?
nazir ali Jul 20, 2012 05:53pm
Funny part is the guys who refuse to pay electric and steal are the ones who will brag about how pious muslims they are and how they fast, how many times they went on Hajj etc....They are the ones who will pay big bucks during Eid to buy cattle for sacrifice but they will not sacrifice money on what they owe. Hypocrites!!!! No tax, no property tax and now no electric bill payments. Pick them up one by one and throw them in the ocean. Or simply shut of their electricity until they make the payments. Else they will take you guys for granted and make fun of it.
Pathetic Punjab Jul 20, 2012 07:22pm
How sick to know that PUNJAB is best as far as payments however it is the ONLY province with THREE days Loadshedding For CNG Electricity goes After every Hour for Two hours unless public property is burnt and situation improves i.e One hour loadshedding after every hour What a nice management !!!!!!!!!
Tahir Khan Jul 20, 2012 07:50pm
Firstly Pakistan does not have lots of gas reserves. Pakistan does have abundant supply of gas, but that will not run forever. The so called Sui gas fields will exhaust pretty soon which supply 26% of our national consumption. Secondly, even if we did have a sufficiently large reserve , gas is best suited for fertilizers and should not be wasted all to burn. Their is a reasonable argument though to use gas as fuel in circumstances like Pakistan. However that should be a short term solution and we should not plan to burn it all. Now Karachi has a large market of gas based generators imported from China but this is not a long term solution. Rising petrol prices have put a pressure on natural gas which has resulted in high demand and therefore gas pressure falls below any acceptable usage.
AKA ANDANI Jul 20, 2012 07:53pm
Narkumar Jul 20, 2012 08:23pm
With this State of Affairs how does Idia expect to be paid for the Electricity Exported to Pakistan?
Ahmed Jul 20, 2012 08:54pm
i think Pakistanis need to start learn to live without electricty. or all the engineer from NED, UET, GIKISt start develop home based solar generators,,,,,there is lot of sun shine in Pakistan. and people in balochistan/coastal sindh need to cature sea breeze, solar...karachi can garner tidal waves...let there be poeple driven electricty revolution, then these disco will rut eternally.
ProgrammingDrone Jul 21, 2012 12:24am
How about burying power cables, like in Germany?
programmingdrone Jul 21, 2012 12:25am
A flat tax can be proposed, to cover the losses, but I guess no one will pay the tax either.
desi Jul 21, 2012 01:40am
What are we all talking about here,before the government can hold us accountable,they need to pay first.Did'nt you read,its the government,the politicians and their friends who own big money and the electric companies are held hostage by these people.How can they possibly do their jobs when they are under constant threat.The only way to stop the snake from biting is to cut his head off,so vote for someone other then PPP or PML-N
desi Jul 21, 2012 01:46am
You cannot impose the same system mr.western.Pakistani's live on less then 100 dollars a month on average.Only 16% of Pakistanis have a bank account,you are comparing apples to aloo's.Know alittle about about Pakistan before you babble out solutions
Hyatt Jul 21, 2012 03:53am
I have run a public sector department and know what goes on inside these organizations. The sure treatment of all sick organizations like Wapda, PIA, Railways, KESC etc is to privatize these organizations. I guarantee you they will start generating profits within 6 months.
Najam Yusuf Jul 21, 2012 05:04am
by the way, can a map be presented with the information about India ?
Najam Yusuf Jul 21, 2012 05:04am
by the way, can a map be presented with the information about India ?
Cyrus Howell Jul 21, 2012 05:03pm
Good One!
Cyrus Howell Jul 21, 2012 05:05pm
Outsiders have to wonder how the government of Pakistan could have allowed the situation to get so bad. How was that possible?
Khan Jul 21, 2012 06:42am
Electricity theft is rampant in Karachi. There are kundas everywhere you go. You have to be deliberately blind not to see all the kundas used for stealing electricity in Saddar, Liaquatabad, PIB, FB Area, SITE, Lyari, Korangi, Malir, etc. Infact 70 percent of Karachi is using stolen kunda electricity. People who say they love Pakistan are looting and destroying the country. So much for patriotism.
ysk Jul 21, 2012 07:54am
Why do you care what is happening in India???? They can have all the electricity or none of it..will not effect your life. So focus on Pakistan.....
Ummer Khan Jul 22, 2012 08:13am
A difficult one!
eeraj Jul 21, 2012 08:52am
gas reserves are sharply depleting in pakistan...frequent gas cuts , loadsheddings and raised prices are a clear manifastation to can this be a sane idea using gas for domestic power supply on permanent basis....on temporary grounds its ok ..on longterm basis its a clear NO.
Navaid Jul 21, 2012 09:23am
Corrupt nation, full of pathetic liars and thief who are proud of what they are doing. What else should one expect? Khuda nay aaj tuk us qoum kee halut nahee budlee....
Fazl Rab Jul 22, 2012 03:22pm
The Ministers of Water & Power do not know basic parameters of electricity like differences between Volts & Watts, Resistence & Impedence or relationship between Volts, Watts and Amperes. When they are briefed by their Technocrats about Power Losses/Transmission Losses or Step-up/Step-Down Transformers; it is Greek to the Hon'ble Minister's ears. In through one and out the other. That is why the public hears such wierd promises as "No Power Shortage by yer's end" not knowing how can it happen. We did hear about some shortages before 2008 but come the PPP and it skyrockets to 20 hrs/day. An elephant's brain is not required to know why? Corruption, Corruption, Corruption. Even the Maulvis/Mullaha are thieves. They live in the mosques and use Kunda for their own power supply. In the Western World, churches pay their power bill but not the Mosques in Pakistan!
Cyrus Howell Jul 23, 2012 08:34pm
What do they have to lose?
victor Jul 26, 2012 10:35am
debt crisis is inevitable in a capitalist system. look at and see the explanation, and thankfully, also the solution. only when you know the root cause can you come up with the solution to the problem.
Cyrus Howell Jul 31, 2012 10:07pm
I think breaking people's legs with cricket bats would make them pay up.