Business Recorder
Power sector: data paints bleak picture

Power sector: data paints bleak picture


ISLAMABAD: Officially released data paints a bleak picture of performance of power sector during the last three years in marked contrast to the claims of the government’s top economic managers and policymakers.

According to officially released data, a collection recovery percentage at the end of second quarter of FY-2016-17 was a poor 88% against the Regulator’s target of 100%; and it saw a 5% extra loss against the target set. The collection figure ending FY 2010 was 104.7%.

According to documents, Pakistan Electric Power Company’s (PEPCO) receivables at the end of FY 2013 were Rs 411 billion after Rs 20 billion had been written-off against the arrears of the government of Sindh. The receivables increased by more than Rs 100 billion to Rs 513 billion at the end of FY-2014 after a write-off of 2 billion of Baluchistan province’s bills. The receivables jumped to Rs 633 billion by the end of FY-2015, Rs 684 billion by the end of FY-2016 and escalated to Rs 730 billion on December 31, 2016.

The Economic Coordination Committee of the Cabinet wrote off Rs 50 billion of Sindh government dues on the recommendations of Ministry of Water and Power. If the write-offs till date are taken into considerations then the receivables reached an astronomical figure of Rs 800 billion - double the amount for the end FY 2013.

Against 4.1 million bills corrected at the end of FY-2013 as much as 4.4 million bills were corrected by the end of FY 2014, 8 million bills during FY 2015, 4.7 million bills during FY 2016 and 2.9 million bills corrected during the first two quarters of the current financial year amounting to Rs 17 billion. In contrast only 2 million bills were corrected during FY-2010.

Pepco’s documents further disclose that interruptions of the system, a reflection of maintenance of the system and addition of lines, increased from just 660,000 during FY-2010 to as much as 8,50,000 during FY 2014, 9,50,000 in FY 2015, again 850,000 during FY 2016 and a high 420,000 during the first six months of the current financial year.

A comparison of damage to distribution transformers for Pepco network for the period of 2010-2017 reveals an increase in the damage rate from 10,000 transformers in FY-2010 with a loss of 1000 MVA in capacity to 17000 in FY 2016 and a 2000 MVA loss in capacity. 13500 transformers of 1500- MVA capacity were damaged in FY-2014, 16,500 transformers with 1900 MVA capacity in FY 2015 and the system has already suffered a loss of 85000 transformers of 1000 MVA capacity during the first two quarters of current fiscal.

“No improvement has taken place in the sector under the Ministry’s direct management. The system did not collapse because of a strong fall in international oil prices, favorable weather and the padding up of the consumer-end tariff with various surcharges averaging Rs 3.50 per unit of electricity,” said experts.

Power Ministry has refused to notify the Nepra determination for FY 2015-16 because the regulator reduced tariff by an average of Rs 2 per unit. As a first in the history of the sector, the Power Ministry required DISCOs to seek stay orders against notification of Nepra’s determination in the Islamabad High Court. Furthermore, instead of notifying Nepra-etermined tariff and passing on the benefits of a fall in oil prices, the Ministry is regularly finding fault with Nepra and is also holding it responsible for various sectoral ills and inefficiencies.

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