Iron hand: Govt proposes increase in jail term, fine for power theft

Centre seeks comments from provinces to curtail heavy expenses due to line losses.

ISLAMABAD:

With electricity theft being one of the major reasons for power shortage and swelling circular debt, the federal government has proposed a crackdown on electricity theft by amending laws to enhance jail term and fine for the crime.

Sources told The Express Tribune that the federal government had sought comments from the provinces on the proposed increase in jail term and penalty for electricity theft.

After the 18th Amendment, the Centre cannot amend any law relating to electricity without consulting the provinces, an official in the Ministry of Water and Power said.

Most power distribution companies face transmission losses of 35 to 40 per cent due to theft.

Jail terms up to one year and fines of Rs0.5 million will be slapped on those involved in electricity theft, according to the proposal. Under current laws, stealing electricity may result in a maximum fine of Rs50,000 and imprisonment of up to two months. The proposed amendment will be tabled before parliament for approval after bringing provinces on board.

Billions of rupees in losses

The government paid Rs151 billion as cost of inefficiency in the power sector during the previous financial year that ended on June 30, 2011 along with another Rs25 billion due to the gap between actual line losses of 19.6 per cent and permitted losses of 16.5 per cent.

Consumers faced a burden of 16.5 per cent line losses due to poor governance in the power sector while the rest were expenses incurred by the government.

The government also paid Rs26 billion on account of late payment surcharge to fuel and power suppliers, Rs10 billion was paid to the Federal Board of Revenue due to non-collection of general sales tax and Rs25 billion was lost in fuel price adjustment due to line losses.

The government also suffered loss of Rs65 billion due to non-recovery by distribution companies as out of actual billing, 88 per cent recovery was made in fiscal 2011.

The government has estimated line losses at 18.7 per cent during the current financial year 2011-12 that means the power sector will lose electricity worth Rs150 billion. At present, the government is facing Rs23.5 billion per month liquidity crunch in the power sector, leading to piling up of circular debt on different accounts.

The government has also directed managements of distribution companies to submit detailed plans for reducing their line losses that have also been a matter of concern for multilateral donors including the Asian Development Bank and World Bank.

Published in The Express Tribune, September 6^th,  2011.