LAHORE: The Lahore Electric Supply Company (Lesco) is in the throes of a crisis as its line losses increased to an exceptional 16.7pc and bill recoveries fell to a disastrous 77pc during May.

According to Lesco statistics, the situation started getting out of hand in February with liquefied natural gas (LNG) leading the industry into its own generation and leaving the Lesco system.

“Industrial consumption has been the most secured area where the company was selling around 700MW to the industry at almost zero distribution losses and 100pc bill recovery,” explained a Lesco official. Now, around 35pc of the industry has shifted to its own generation due to induction of LNG and more is on its way. The sale thus has to be diverted to high-loss domestic sector where controlling line losses and recovering bills have always been complicated. Due to this, the overall losses are increasing and bill recovery dropping, he claimed.

“This explanation may help understand the causes, but it does not justify the situation,” felt an official of the Pakistan Electric Power Company (Pepco).

The loss on both sides (line and bill recovery) has been progressive. In February, the losses stood at only 5.7pc. The very next month, they jumped by almost 300pc – at 14.5pc. In April, they further increased to 16.5pc and May witnessed another jump of 0.2pc.

Similarly, the recoveries that stood at 114pc have gone down to a disastrous 77pc. Can a company survive with 54pc loss – 37pc on the recovery side and 16.7pc line losses, the Pepco official wondered. This situation, if not controlled immediately, can spell doom for the company, he warned.

“This is a three-dimensional situation,” according to a former Lesco head.

He went on to say the LNG is one factor; the other two are dilapidated and overloaded distribution network and demoralised workforce. Almost 30pc of the areas suffer what we call system constraints, meaning that optimum power supply cannot reach there due to weak gadgetry, which adds to distribution losses. In the remaining areas, there are only few fortunate ones where transformers of sufficient capacity are installed to sustain supplies, otherwise most of them are overloaded, adding to high losses. So is other distribution gadgetry, which works at a very high price, he added.

He further said the system has not been updated for decades. On top of all this sits the ad hoc management, which is more concerned about its own survival than serving the company and people; the chief executive officer (CEO) is serving on extension and the board of directors does not have anyone with experience of distribution companies.

The former Lesco chief said since the CEO is serving temporarily, wresting among senior officials for the top position, which is up for grabs at the moment, is natural. In these circumstances, it is not hard to imagine why the situation is deteriorating in the company, he concluded, adding: “One should not forget that these losses are being incurred despite gross overbilling. If overbilling is excluded, which itself comes at a very high social and political cost, the actual situation might be much worse than what these statistics suggest.”

Published in Dawn, July 10th, 2016