Leaking DISCOs

As Pakistan begins to inch toward a long-overdue path of economic recovery, the government has been eager to highlight improvements across sectors — none more so than the power sector, where Federal Minister for Energy Awais Ahmad Khan Leghari claims a "success" in reducing electricity theft and losses by Rs192 billion. But in truth, this is a damning reminder of how deep-rooted dysfunction continues to plague DISCOs, and how these entities remain one of the biggest drags on the country's economic revival.

The Rs591 billion loss inflicted by government-run DISCOs in FY2023-24 is a symptom of institutional rot. While the minister points to a reduction to Rs399 billion as a sign of progress, let us not forget that this remaining burden is still being shouldered by taxpayers and honest bill-payers.

The breakdown of the losses is as follows: Rs315 billion lost due to unpaid bills and Rs276 billion attributed to electricity theft. Even with improved recovery rates and marginal savings, the fact remains that nearly Rs400 billion continues to bleed from the system every year. This is a massive leakage in an economy. Power theft, non-recovery and technical inefficiencies all stem from the same root cause: a lack of governance and accountability.

For years, DISCOs have been run on the basis of political patronage and outdated systems that allow theft and corruption to flourish unchecked. While reforms and merit-based board appointments are welcome, they are not a silver bullet. Without independent audits and zero-tolerance enforcement on corruption, these reforms will remain cosmetic.

The bar should not be so low that reducing theft is considered a success. DISCOs must be transformed from politically compromised entities into professional, performance-driven utilities. As Pakistan enters a new fiscal year with hopes of economic renewal, one message must be clear that recovery will not be possible without root-and-branch reform of the power sector.