LAHORE: The Pakistan Electric Power Company (Pepco) has failed to recover a staggering Rs60 billion arrears from the private sector and government departments during the first five months of the current fiscal year, raising further the power sector’s receivables and circular debt.

Interestingly, Pepco received Rs45.25 billion as subsidy from the federal government during the July-Nov period and another Rs12 billion in December. The total subsidy of Rs57.25 billion is almost equal to the arrears accumulated during the period.

According to Pepco’s own figures, its receivables, which stood at Rs285 billion by the end of June last year, jumped to Rs345 billion by the end of November — Rs12 billion a month or Rs400 million a day.

Nine distribution companies (Discos) of Pepco billed Rs331 billion to different consumers during the first five months of the current fiscal year, but were able to recover only Rs271 billion.

Arrears of government departments increased during the period from Rs142 billion to Rs172.93 billion and of private sector consumers from Rs142.644 billion to Rs171.67 billion.

The Karachi Electric Supply Company remained the biggest defaulter. Its arrears increased by Rs11 billion to Rs51.95 billion from Rs40.89 billion.

The Federally Administered Tribal Areas was second on the list with Rs10.37 billion arrears, followed by Azad Kashmir with Rs9.88 billion.

During the first five months of the current fiscal, Pepco tariff was raised by Rs3 per unit -- an average increase of almost 30 percent.

“The figures reflect the reality of power sector which has become a rudderless ship over the past few months,” says a Pepco official. “No-one knows who is running the sector? Officially, it should be the water and power ministry, but practically the finance ministry is running the show because of huge subsidies involved. It does not have the required expertise, thus relegated the sector to the Planning Commission.”

He said all of them jointly, and officially, dissolved Pepco but it still existed and no-one knew what kind of relationship the company had with distribution companies.

A former member (power) of Wapda said seven of the nine distribution companies were being run by officials working on an “acting charge basis”.