Dysfunctional DISCOs

Pakistan's DISCOs caused Rs660 billion loss in 2023-24, highlighting inefficiencies and power pilferage issues.

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The poor performance of Pakistan's power distribution companies (DISCOs) has reached alarming lows, with profound implications for the national exchequer and taxpayers. The recently released annual performance report from the National Electric Power Regulatory Authority (Nepra) casts a sobering light on the situation, revealing that these entities collectively caused a staggering loss of over Rs660 billion to the national exchequer in the fiscal year 2023-24.

At the heart of the situation is the total failure of the government to address high transmission and distribution losses, or even come close to meeting its own relatively high loss targets. Last year, for example, line losses were as high as 30% in some areas, and all of the DISCOs in the country failed to meet the 12% target set by the government. While some of the losses are due to inefficiencies blamed on older distribution lines, many countries around the world are able to keep line losses at negligible levels by simply planning ahead when selecting sites for power plants and distribution stations. It should also be noted that, unlike most other countries, a noticeable part of line losses in Pakistan is due to power pilferage, which our leaders usually address with photo ops of illegal lines being cut, only to be replaced hours later, after the cameras have moved on. On billing, there was a bright spot as several DISCOs managed to get close to 100% recovery, though none went beyond 97%. Unfortunately, Sukkur and Quetta only recovered 32% and 65%, respectively, costing the country a combined Rs380 billion loss and raising questions over what their managers have done to deserve their jobs.

Every few months, Islamabad makes tall claims about how it will address power sector circular debt, most of which fall flat and do nothing to rein in the debt. This is because the government comes bearing bandages when nothing short of surgery will suffice. Policymakers need to remember that their duty is towards the public, not to DISCO executives.