LAHORE: The nine electricity distribution companies (Discos) suffered line and administrative losses of 16.277 billion units during 2013-14, which are 1.172bn more than the previous (2012-13) year, and cost national economy a staggering financial loss of Rs211 billion.

According to the sectoral data complied by Pakistan Electric Power Company (Pepco), all these nine distribution companies received 87.332bn but billed 71.055bn units — a straight loss of 16.277 billion units.

Previous year (2012-13), they had received 80.091bn units and billed 64.985bn units, with a loss of 15.105bn units.

If calculated at the rate of Rs12.98 per unit — purchase price for these distributions companies — the loss this year rose to Rs211bn this year from Rs196.01bn last year. If calculated at sale price of Rs14.70 per unit, the loss could rise up to Rs239.270bn on this head alone.

Distribution companies received 87.332 billion units but billed 71.055bn units — a straight loss of 16.277 billion units

“Incidentally, these figures suggest only the difference between what these companies received and sold, not the receivable that they failed to collect even after the billing,” says a former general manager (finance) of Pepco.

If that figure is added to the tally, the disastrous situation in power sector is not hard to comprehend. Thus, Rs211bn a year comes to around Rs17.58bn a month and around unbelievable Rs580 million a day.

Almost same amount is cumulated in what the sector calls receivables — the bills that are not recovered — and the sector is taking a hit of more Rs1bn a day on these two accounts, he estimated.

“The pattern of losses also smashes few other myths,” says a former head of Pepco.

Out of total losses of 16.277bn units, the five companies in the Punjab, which are normally considered the most efficient and touted as underwriting the rest of the four companies, have suffered almost half of the losses — 7.792bn units, or Rs101bn.

The two most maligned distribution companies, which are considered as one for administrative and proximity reasons - Peshawar Electric Supply Company (Pesco) and Tribal Electric Supply Company (Tesco) — jointly suffered 4.236 billion units loss.

Similarly, Hyderabad Electric Supply Company (Hesco) is also taken as very high loss-making company but its loss was 1.3 billion units. The Quetta Electric Supply Company (Qesco) lost 1.21 billion units.

The contention is not to blame a particular company or province but to maintain that everyone in the sector is equally inefficient or causing the loss, he concluded.

“The ministry, instead of hiding behind some marginal decrease in average losses — because it sold more units last financial year than previous one — should also consider what are its overall losses?” says a former Pepco managing director.

The quantum reflects the total loss and hurts the sector in real terms. These 16.277bn units are 1.12bn units - or Rs14.58bn more than last year regardless of decrease in average line losses.

This dimension worth looking at, and must be looked into. The entire focus should be bringing total quantum of losses down so that health of the system could be restored to greater extent, he said and added: “The loss or efficiency criteria should also not be a matter of provincial and political context. It is national crisis and should be dealt with. If the sector sells more units, it should not be used as an excuse for additional losses, both to the sector and national economy.”

Published in Dawn, August 1st , 2014