Electricity and gas theft
In one of the series of meetings on Friday, Prime Minister Imran Khan directed the authorities to take stern action against the consumers involved in the theft of electricity and gas theft. The massive pilferage in these sectors particularly by the political elite and influential industrial and commercial consumers is one of the main reasons of huge losses in theses sectors whereas the campaign against electricity and gas theft is entirely focused on the domestic consumers, small and medium scale commercial consumers. The big fish still enjoy immunity from crackdown against electricity and gas pilferers. Likewise the recovery drive of power and gas sector arrears is restricted to domestic and small commercial consumers.
It is the lack of political will and administrative support from the federal and provincial governments that concerned authorities feel handicapped to take strict action against the pilferers in political class, influential businessmen and industrialists. The recovery drive of electricity bills from the defaulting domestic and small commercial consumers is successfully going on but it is the default of electricity bills by politicians, and tycoons of mercantile class that the amount of power sector receivables has swollen to Rs. 870 billion which is 50 percent of the accumulated circular debt of Rs.1.6 trillion.
Another major reason of the power sector crisis is the shady power purchase agreement that were made with IPPs in the second tenure of Benazir Bhutto government and the tariff of 8 cent per unit allowed to Chinese thermal power producing companies in the last PML-N government. Former Chief Justice of Pakistan Mian Saqib Nisar had taken Suo motu notice of excessive payments to IPPs and started proceedings. But the present federal government has not taken any step forward to persuade the private power producers to renegotiate the clauses of power purchase agreements in the national interest except internal audit of the IPPs to access the generation cost of the electricity produced by their thermal plants. It the clauses pertaining to 40 percent payment for idle thermal power plant capacity and use of diesel and furnace oil as fuel that makes the power generation system the most expensive in the world pushing both industry and agriculture into perpetual stagnation. Interestingly, the former President of IPPs Association Nadeem Babar holds the portfolio of Advisor to the Prime Minister on oil and gas.
To streamline the electricity bills recovery system, the Asian Development Bank had sanctioned a loan of $ 400 million in 2016 for the installation of smart meters for the domestic, commercial and industrial consumers in the jurisdiction of Lahore Electric Supply Company (LESCO) and Islamabad Electric Supply Company IESCO). Neither the previous government nor the present one showed interest to utilise the loan despite the fact that commitment charges are being paid on it. The advance metering system will certainly ensure 100 percent recovery of bills from the consumers of these two distribution companies.
Until 2007 gas sector losses were negligible which rose significantly over the past 10 years due to pilferage and non payment by industrial consumers and owners of CNG filling stations. At the time of scrutiny of nomination papers before 2018 polls, a number of candidates of different political parties were found defaulters worth millions of rupees gas bills of their commercial and industrial enterprises. The illegal gas connections in the gas producing districts of Khyber Pukhtunkhwa deprive the SNGPL of revenue of about Rs. 10 billion. It is high time that policy and administrative support is given to the power and gas sector authorities for taking strict action against the influential pilferers and defaulters.