ISLAMABAD: The government on Monday ordered a countrywide crackdown on electricity theft and line losses in a bid to create an acceptable environment for a proposed 20 per cent increase in power tariff later this week.

This was the crux of two related meetings — one presided over by Prime Minister Imran Khan and the other by Finance Minister Asad Umar — on Monday.

The prime minister decided to launch an immediate crackdown on electricity theft, saying “it is unacceptable to make people pay for the cost of theft and mismanagement of others”, an official statement quoted him as saying during a meeting of the energy task force.

Finance Minister Umar, while chairing a meeting of the Economic Coordination Committee (ECC) of the cabinet, also “directed the officials concerned to submit a detailed plan for improvement in the power sector, especially measures to increase recoveries and reduction of losses, before the proposed tariff rationalisation plan could be approved”. The ECC would meet again on Wednesday to consider the above mentioned plan and tariff rationalisation proposals”.

Finance minister seeks detailed plan for power sector improvement before approving tariff rationalisation plan

Informed sources said the ECC took up for discussion the proposed increase in electricity tariff for the eighth time in less than two months.

The finance minister told the power division that the increase in rates alone would not be enough to address cash flows of the power sector and circular debt would resurface. Therefore, he said, it was important that people should know what steps were being taken for recovery of arrears, reduction in losses and improvement in governance of the power sector when they were given the price shock because his party had been talking about all these things over the past four-five years.

According to the sources, the power division secretary told the meeting that steps were being taken to improve recoveries and reduce theft and losses.

The finance minister said that then such a plan should be made part of the proposal for tariff increase so that it could be presented to the prime minister for approval and public concerns were also addressed while announcing price hike. He asked the power division to get back to the ECC on Wednesday after incorporating governance improvement plan in the tariff increase summary.

The ECC also reviewed a report of the auditor general on financial and operational issues in the four largest loss-making power distribution companies — Hesco, Pesco, Qesco and Sepco — during 2016-17 and 2017-18. The report highlighted significant areas of the distribution system responsible for line and commercial losses.

The finance minister asked the power division to take remedial measures on shortcomings identified by the auditor general and call heads of these companies to Wednesday’s ECC meeting for their direct input.

Mr Umar then took the prime minister into confidence on the subject at the energy task force the meeting. The prime minister ordered immediate steps that should avoid additional burden of power theft and other system losses on consumers.

Mr Khan said it was for the first time that the government was working on a comprehensive energy policy and strategy for 25 years keeping in mind demands of domestic, industrial, commercial and other sectors of economy. The 25-year plan would at the same time also take into account the targets for improved energy mix, full utilisation of indigenous resources and promotion of renewables in an integrated manner to minimise reliance on imported fuels.

The prime minister was told that a special task force had already been set up under the Punjab chief minister to combat electricity theft and the deputy coordination officers concerned would monitor the crackdown on power theft at the district level. PM Khan directed that similar steps be also taken in other provinces on an urgent basis. He asked the power division to ensure supply of quality transformers to the distribution companies which should be involved in the preparation of comprehensive plans for reduction in losses and theft with maximum utilisation of modern technology.

The petroleum division told the meeting that the process of awarding 100 exploration blocks to oil and gas companies in a transparent manner was in final stages to be followed by another 30 blocks in due course.

The prime minister ordered provision of foolproof security to the companies involved in exploration of oil and gas in the country and promised that all international investors would be facilitated in Pakistan.

The ECC also discussed a proposal by the power division relating to payment of subsidy for agricultural tube wells in Baluchistan. The power division proposed continuation of the subsidy for another two years involving an additional amount of Rs46-85bn, despite Rs218bn arrears until early this year, and reported that the Balochistan chief minister was not responding to the proposal.

The committee decided to consult the chief minister before taking a decision on the matter.

Published in Dawn, October 23rd, 2018

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