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Energy sector continues to bleed due to unpaid dues

The energy sector continues to “bleed” due to the nonpayment of its dues, with the private sector liable to pay Rs197.4 billion to power distribution companies (DISCOS) on account of electricity supply.

During informal discussions on issues faced by the Islamabad Electric Supply Company (Iesco), Iesco Chairman Mohsin Khalid and CEO Muhammad Yousuf Awan said that Iesco was to receive Rs19.543 billion from consumers, including the government of Azad Jammu and Kashmir (AJK).

He said the government of AJK had refused to pay according to the tariff notified by the National Electric Power Regulatory Authority (Nepra) to Iesco. He said that Iesco is yet to receive Rs14.5 billion from the AJK government.

Nepra had determined a tariff rate of Rs7.85 per unit for the power supplied to AJK, but the AJK government was not ready to pay at the price set by the regulator.

“At the time of building of the Mangla Dam, the government had agreed to a tariff rate of Rs2.59 per unit for AJK consumers, which was later revised by Nepra to Rs7.85 per unit,” Awan said, adding that the AJK government was currently paying Rs2.59 per unit.

According to the breakup, AJK government owed Rs14.59 billion to Iesco, Rs1.767 billion to the Capital Development Authority, and Rs1.294 billion to other government departments. The private sector was to pay another Rs1.933 billion.

Khalid said that running defaulters were to pay another Rs870 million. He said that Nepra had allowed the recovery of Rs14.613 billion on tariff differential claims from consumers in its decision on the issue, which was pending since last year. Nepra had delayed the tariff decision for a year and government has yet to notify it.

He said that an amount of Rs9.422 billion had been stuck due to a court’s decision and Iesco management had filed an intra-court appeal.

He said that the total power generation was 81.4 billion kilowatt-hour (kWh) in 2011-12, out of which 65.64 billion Kwh were sold by DISCOS. He said that 15.84 billion Kwh were lost, causing a monetary loss of Rs132 billion.

Awan said that transmission and distribution losses stood at 10.8% in 2008-09 and had declined to 9.5% since. He maintained that transmission losses of Iesco had also declined from 3.35% to 1.76%. Khalid claimed that Iesco was performing well otherwise, and was at the top in recovering dues among other DISCOS.

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