Daily Times

For a government the easiest task is to sign off on multi-billion loans and mega-projects with multinationals. They then choose to work on decade long projects of power generation rather than addressing the demand side issues of the domestic power- which would prove more fruitful in the long run. No matter how much the government increases the production of electricity — a large amount is stolen — this leads to the billions of dollars in circular debt that we owe. Power crisis in Pakistan is fundamentally a corrupt management issue, where the staffs of distribution companies are involved in facilitating theft in return for a substantial payoff. These workers can temper meters, turn a blind eye to direct hooks and charge innocent consumers who do not bribe them.

The Government more than often hires power distribution companies, who turn their on-ground staff into a force for bribery and other illegal acts. These linemen are supported and protected by higher ranking officials — who also pocket a generous cut for themselves. This large scale corruption in evident in the hundreds of complaints and corruption charges levied on the power sector in the National Accountability Bureau (NAB).

Moreover even the Pakistan Army attempted to revive the sector by taking over in 2004, however failing at the task. During all this- taxpayers and the government have lost billions of tax-money, contributing greatly to the Rs.500 billion of circular debt that Pakistan owes.

There are nine public sector power distribution companies in Pakistan. Of these, Faisalabad Electric Supply Company, Gujranwala, and Islamabad electric supply companies are the best performing where as much as 90% consumers make payments and electricity stealing is lower than other parts of Pakistan. On the other hand, Peshawar, Hyderabad, Sukkur and Quetta Electric Supply companies are worst performing with as much as 40 percent electricity stealing rates. This means if a government  buy Rs. 100 billion electricity for these companies, they will only generate revenue of Rs 60 billion due to electricity stealing and billing irregularities. Moreover, Government pays a large amount of Subsidy on electricity especially for the areas where electricity theft rates are higher.

Power crisis in Pakistan is fundamentally a corrupt management issue, where the staffs of distribution companies are involved in facilitating theft in return for a substantial payoff

In majority of the cases, government departments also don’t pay their electricity bill which is a key contribution to circular debt. The issue of debt can be settled if these departments pay their long due bills. In Islamabad for instance, The Capital Development Authority (CDA) and Islamabad Electric Supply Company (IESCO)don’t pay each other for services received. In 2013, the IESCO had to replace tube wells in Islamabad despite the CDA not having paid their electricity bills.  Since these tube wells were old and wasted millions monthly, the IESCO with the assistance of USAID replaced more than a 100 tube wells in Islamabad. This replacement helped save almost two Megawatts of electricity, nationally. Hence, it is clear that if local administrative powers are willing, then much improvement can be made without borrowing more money.

In Balochistan, the Government offers subsidies on electricity for agricultural tube wells yet a large amount of subsided electricity is stolen through direct hooks which create gaps between the payables and receivables of the Quetta Electricity Supply Company (QESCO). Moreover since the employees of QESCO cannot travel outside of Quetta for billings due to security risks, most powerful elites and government departments located around the province also do not pay their bills.

In Hyderabad, there are areas where a political party collects bills and pays the Hyderabad Electric Supply Company(HESCO) a certain amount from what it collects. There are even ‘no-go’ areas for HESCO staff right next to it’s headquarter. The USAID in 2013 provided HESCO with hundreds of kilometres of insulated cables to reduce power stealing, however the project failed due to the lack of interest of the HESCO staff as well as local resistance to project staff in the areas where the cable was installed.

Similarly in the Federally Administrated Tribal Areas (FATA) citizens used to pay their electricity bills up till the 1980s. However in the 80s, the US government commenced payments to Pakistan for subsidies and waivers on electricity for the people of FATA. As a result an entire generation grew up without paying their electricity bills. In the early 90s when the subsidies were removed, the government could not convince the people of FATA to pay their bills to the Tribal Electricity Supply Company (TESCO).

In FATA people used to pay their electricity bills till the 1980s. In the 80s, the U.S. government started payments to Pakistan for subsidy and waiver on electricity for the customers in FATA, as a result, a generation grown without paying electricity bills. In the early 90s when the subsidy/waivers were withdrawn, the Government could not convince people in FATA to pay their bills neither the Tribal Electricity Supply Company (TESCO) has an ability to make any achievement in this regard.

While the new government discussed the power sector in its very first cabinet meeting — it needs to continuously focus on demand side management along with generation projects. Eliminating corruption from these companies will not only help the shortage issue but will also help in the elimination of circular debt.

The writer is a media and communications professional. He can be contacted at zia051@gmail.com or Twitter: zia051

Published in Daily Times, August 29^th 2018.