Branches’ trimming

Federal Minister for power Omer Ayub Khan, while addressing a public meeting in Haripur, disclosed the power pilferage detecting meters shall be installed on transformers; production short fall will be overcome by electricity import from Tajikistan; and domestic generation will be enhanced. This sort of rosy political phraseology has become cliché and people no longer believe it.

The government has not so far shown the political will to take action against the big defaulters of electricity and symbolic crackdown against domestic consumers and small commercial and industrial enterprises has fizzled out. Peshawar Electric Supply Company (PESCO) has offered liberal incentives to domestic power pilferers who steal it through hooks and waiver of surcharge up to Rs. 30000 to consumers in the Bannu districts who are willing to pay the bill worth Rs.10000. Electricity meter installation fee has been reduced from Rs. 16000 to Rs. 1500 in a bid to discourage Kunda syndrome. It remains to be seen how far this domestic consumers’ friendly package works.

The major factors responsible for power sector crisis are: A deliberate policy of masterly inactivity on the part of government to let off the hook the influential defaulters of electricity bills; piling of power sector receivables against federal and provincial government departments; shady power purchase agreements of PPP and PML-N governments; and 40 percent plus line losses because of rag-tag, obsolete and faulty electricity distribution and transmission system. The combined effect of these factors resulted in recurring power sector circular debt for the payment the damaging short cut of tariff hike is used which gives impetus to electricity stealing and default of bills.

In order to meet revenue requirements of power distribution companies another power tariff hike of Rs. 3.20 is on cards. Earlier the government jacked it up by Rs.1.20 per unit. A further hike in electricity tariff of Rs.15.31 is expected in June. All these adhoc fiscal measures are being taken to generate additional revenue of Rs. 223 billion. It has increased reliance on using solar kits by domestic consumers of not only bottom classes but also lower and upper middle classes as well. Switching over to solar energy out of compulsion impacts the revenue position of power distribution companies.

The proposal of importing electricity from Tajikistan and its subsequent induction into the national grid is an illusive project. The proposal came to media limelight in the first PML-N government, resurfaced in its second and third tenures of government but remained a non-starter. If the existing power distribution system cannot pick the additional generation from the newly installed thermal and hydel power station then how can the project of importing electricity from a Central Asian country will become feasible, let alone acquiring funding from the multilateral donors’ agencies for its execution. Like the previous government the present one is also reluctant to avail the already approved loan of $ 4.5 billion from the Asian development Bank for the up-gradation of power transmission and distribution system because the donor agency is insisting on the installation smart meter for advance metering for the consumers in the jurisdictions of Islamabad Electric Supply Company and Lahore Electric Supply Company to curb the menace of power stealing.

Perhaps the minister for power is oblivious of the fact that government is facing extreme difficulties in arranging finances for the $.10 billion worth two dams, Diyamer Basha and Mohammand dam. Lack of favourable response from the multilateral donors like the World Bank and even the much relied upon friendly country China is delaying the launching of hydropower projects. The issue of financing these power projects came under discussion between the federal minister for water resources Faisal Wavda and the visiting UAE delegation on Monday. WAPDA high ups could not give clear and firm answers about the external source of financing pertaining to the approved big hydropower projects in the ECC meeting held the other day. The issue of power sector arrears against the political and business elite, federal and provincial governments should be addressed on priority basis. Power tariff hikes are not the satisfactory remedies of financial crisis which have made this sector a sinking ship.