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Experts dismayed over poor performance of power sector

Experts have expressed dismay over the performance of the power sector during 2008-12, as an addition of 3,000MW was wasted in distribution and recovery losses.

Data compiled from the official records of the Pakistan Electric Power Company (Pepco) reveals that the average daily electricity shortfall was 1,850MW in 2008 that increased to 6,325MW in 2012, registering an increase of 242 percent. The generation capacity increased by 3,000MW from 20,232MW to 23,643MW, depicting an increase of 16 percent.

In 2008, the total hydroelectric and thermal generation in the country was 61,628 gigawatt per hour (Gwh) that increased by 15 percent to 71,592 Gwh. So the increase in power production was only one percent less than the increase in the power production capacity.

The hydroelectric capacity during this period declined nominally by 0.1 percent, the data showed.

“Besides increase in the furnace oil rates, the factor that added to the woes of the power sector was the ever-deteriorating recovery of billed amount and increase in distribution losses,” Brigadier Mushtaq Ahmad, former chief executive officer of the Gujranwala Electric Company, said. In 2008, the distribution and recovery losses of the entire power sector were Rs119 billion, which shot up to Rs207 billion in 2012, showing an increase of 73.8 percent, he said.

Both higher distribution losses and inability to recover the billed amount is due to criminal negligence of the power managers, he said, adding that low end-consumers are update on their electricity bills.

“The main defaulters are politician-cum-industrialists,” Brigadier Mushtaq said, adding that the failure of the power managers to collect bills and arrest power theft is due to the reasons that appointments at the crucial posts were not made on merit but on political grounds.

He said that a part of line losses may also be due to overloading in the power system.

While only 16 percent power was added in the already depleted system, the number of power consumers increased by 17.2 percent during 2008-2012, he said. In 2008, total power connections were 18 million that increased to 21 million in 2012, he said, adding that this increase in the consumer base ensured that the power shortages would continue to grow.

Average consumption per consumer declined from 3,943 units in 2008 to 2,984 units in 2012.This, he said, was partly due to less availability of electricity because of higher power outages.

Mohsin Syed, power sector expert, said that other disturbing aspects of the last five years performance of the power sector include increase in subsidy from Rs112 billion in 2008 to Rs554 billion in 2012.

He said that the government owed Rs85 billion to independent power producers (IPPs) in 2008 that ballooned to Rs500 billion in 2012. This is part of the story as over Rs500 billion of IPPs debt has been paid by taking loan from commercial banks, adding to the sovereign debt.

He said receivables from the consumers were Rs118 billion in 2008 that increased to Rs385 billion in 2012. Ghalib Atta, another power sector expert, said that the performance of the power distribution companies has declined in some cases to an unmanageable level.

The recovery of billed amount in Quetta Electric Supply Company was 86 percent in 2008, which declined to only 36 percent in 2012. Similarly, headed recovery rate at the Peshawar Electric Supply Company was 92 percent in 2008 and 68 percent in 2012, in Hyderabad Electric Supply Company, it was 77 percent in 2008 and 69 percent in 2012, in Islamabad Electric Supply Company and the Lahore Electric Supply Company it was 98 percent in 2008 and 96 percent in 2012. The recovery rate was 99 percent in Faisalabad Electric Supply Company in 2008 and 98 percent in 2012.

The recovery of electricity bills remained stationary at 97 and 98 percent in the Multan Electric Power Company and Gujranwala Electric Power Company, he added.

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