The right message

We applaud KESC’s efforts to get both individuals, as well as large institutions like PSM, to pay their bills.

In cutting off the power supply of the Pakistan Steel Mills (PSM), the Karachi Electric Supply Company (KESC) is sending the right message: no matter how big you are, no matter how well-connected you are, you will not be provided any electricity unless you pay your bills on time. We applaud the KESC’s Herculean efforts to get both individuals, as well as large institutions like the PSM, to pay their bills, and we hope this example is emulated by other energy companies across the country.

It is a message that needs to be heard resoundingly across the country: no more free lunches. To this end, the Sui Northern Gas Pipelines’ recent efforts to publicly crack down on natural gas theft are also a welcome development. Consumer-facing companies in the energy sector — whether they are publicly or privately owned — need to stop tolerating high levels of theft. And regulators like NEPRA and OGRA need to incentivise such crackdowns and stop allowing these companies to count theft as part of their legitimate costs.

This theft has a real cost to the national exchequer. Over half of the Rs500 billion in energy subsidies paid by the government every year are caused because of theft. The federal deficit would come down by one-sixth simply by eliminating electricity theft alone. And then, there is the economic cost of theft, quite separate from the fiscal costs. Of the over four billion cubic feet of gas produced every day in Pakistan, about 500 million cubic feet per day is stolen. That amount of natural gas would be sufficient to dramatically reduce the dependence of state-owned and private-sector power companies on expensive, imported furnace oil and would have the dual advantage of reducing electricity costs further and enhancing the reliability of supply. Simply put, we cannot afford to go on tolerating the energy thieves amongst us any longer. They are draining the very lifeblood out of the nation’s economy and it is high time they were made to pay. The KESC has made a good start. We hope this tradition only continues to grow over time.

Published in The Express Tribune, June 21^st, 2013.

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