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Power sector experts oppose tariff hike

Power sector experts have strongly opposed further increase in power tariff and asked national power managers to instead eliminate power theft and collect entire billed amount.

They regretted that power managers have not learnt any lesson from the past five years of bad management during which the increase in power tariff was accompanied by growing power theft and reduction in recoveries of bills of power supplied.

Energy sector player Ghalib Atta said that the distribution losses in 2006-07 were 14.9 percent. He said distribution losses are mainly due to power theft. At the end of 2011-12, the distribution losses rose to 18.2 percent meaning that power theft mounted by 3.3 percent. In rupee terms, this amounts to an addition of Rs21.78 billion.

He said globally the distribution losses are not more than four percent. He said with 14.2 percent higher distribution losses, cost of power thieves is escalating by Rs93.72 billion annually.

Another energy sector expert Mohsin Syed said that according to official documents the receivables of power distribution companies were Rs366.217 billion as on 31st October, 2012. Now the receivables, he added, are in excess of Rs400 billion. He said the gap between the amount billed and the payment collected against it is widening at an average of Rs3 billion per month or Rs36 billion per year.

He said the distribution losses could be brought down to four percent again through strong political will. He said the government would collect additional Rs129 billion additional through these measures.

“This amount is higher than the 16 percent increase in power tariff proposed by power managers to the National Electric Power Regulatory Authority,” he said. Syed said that the analysis of the receivable by different distribution companies reveals that out of total Rs366.217 billion receivables of the Pakistan Electric Power Company (Private) Limited on 31st October, 2012 the five power distribution companies located in Punjab were unable to collect Rs89.63 billion of the billed amount.

The four power distribution companies located in other three provinces were unable to collect Rs243.93 billion of the billed amount and the Tribal Electric Supply Company that operates in the federally administered tribal areas had Rs30 billion unpaid bills.

He said none of these amounts should be waived off. He said even the amount due against Punjab based distribution companies is very high and should be a matter of grave concern for their chief executives.

He said there is no reason for rejoice if the outstanding of Punjab based power distribution companies is 1/3rd than rest of the companies. These companies supply more than 60 percent of the entire power produced in the country, he said adding that an outstanding amount of Rs33.75 billion against Lahore Electric Supply Company is not small. He said all-out efforts should be made to collect this amount and those pending against other distribution companies of the province.

He said even more concerted efforts are needed to collect dues from power distribution companies of the other three provinces.

He said Rs72.84 billion is outstanding against Peshawar Electric Supply Company, Rs44.05 billion against Hyderabad Electric Supply Company, Rs63.47 against Sukkur Electric Supply Company and Rs63.55 billion against Quetta Electric Supply Company.

He said the two distribution companies of Sindh could not collect Rs107.53 billion of the outstanding bills although Karachi is separately serviced by Karachi Electric Supply Company. He said the outstanding against KESC almost balances out as the federal government owes it equivalent amount against power subsidy it provides to lifeline consumers.

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