Recovery of power sector dues

Bill recovery remains one of the biggest problem areas for all power companies in the country, with government departments being among the most high-profile and chronic defaulters. At a recent meeting, the prime minister turned down a proposal from the Ministry of Water and Power to deduct at source the electricity bills of Sindh from the divisible pool of taxes. As is so often the case, the premier, fearing backlash from the provincial government, was reluctant to give his go-ahead to the ministry’s suggestion even though the amount that is owed by Sindh has now crossed Rs72.1 billion. Overall, the electricity bills of all four provinces have inched up to Rs104 billion, equivalent to a billion dollars, with Sindh occupying the lion’s share of the amount owed.

This amount has not piled up overnight. In fact, it highlights how long Sindh has lagged behind in paying its electricity bills. State-owned entities, as well as the provincial arm of the government have, more often than not, failed to clear inter-department dues as they clearly feel they can get away with it. Money earmarked to clear dues is either spent irresponsibly or doesn’t reach the destination at all. While the Sindh government continues to fail to clear its power dues, at the same time, reports are doing the rounds that it is spending Rs25 million on arranging the death anniversary of Zulfikar Ali Bhutto. The provincial authorities’ priorities are clear for all to see.

The PML-N will not be able to achieve its promise to end power outages if defaulters continue to be a pain. Line and distribution losses aside, bill recovery is the single-most painful challenge that has disrupted the chain of power distribution. Meanwhile, honest consumers continue to bear the brunt by paying higher tariffs. In addition, farmers in Punjab, especially those backed by influential people, have not paid their bills either. Any meaningful reform in the power sector will only be possible if the centre is able to recover the billion dollars in power bills that it is owed.

Published in The Express Tribune, April 2^nd, 2016.

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