DISCOs fail to recover Rs481b: audit

Pakistan's power sector has once again come under the spotlight after a federal audit report on the accounts of distribution companies (DISCOs) for audit year 2024-25 (financial year 2023-24) revealed that they failed to recover an extraordinary Rs480.6 billion from consumers.

The report identifies chronic inefficiencies, lapses in governance and lack of enforcement as main reasons behind the lower recoveries.

The audit revealed DISCOs' failure to recover Rs481 billion, collectively owed by 354,515 running consumers and 121,973 permanently disconnected defaulters as of June 2024.

Despite this huge outstanding amount, no serious efforts were made by managements of DISCOs to recover the dues. The Ministry of Energy (Power Division) also came under criticism for not appointing recovery staff — only six Tehsildar recovery officers were working against 60 sanctioned posts — which further crippled the collection efforts.

Sukkur Electric Power Company had the largest share of unrecovered bills, estimated at Rs218 billion. Quetta Electric Supply Company followed with arrears of Rs106.7 billion while Hyderabad Electric Supply Company accounted for receivables of Rs55.2 billion. Similarly, the outstanding dues of Tribal Areas Electric Supply Company were Rs83.7 billion.

Even in the better-governed regions, the story was bleak. Peshawar Electric Supply Company failed to recover nearly Rs12 billion, Faisalabad Electric Supply Company could not collect Rs5.7 billion, Lahore Electric Supply Company had dues of Rs5.05 billion and Multan Electric Power Company had receivables of Rs3.8 billion. Though smaller in scale, Islamabad Electric Supply Company booked unpaid bills of Rs66 million.

Auditors pointed out that many of those consumers had been defaulting for over a year, yet the companies showed little urgency in taking legal or administrative action. The persistence of default not only undermines the financial health of DISCOs but also contributes to Pakistan's ballooning circular debt, which has crossed Rs2.6 trillion.

The audit findings suggest that the gap of Rs480 billion is not just a matter of unpaid bills but the evidence of a systemic breakdown. Weak internal controls, lack of enforcement measures and tolerance of long-term defaults have created a vicious cycle: DISCOs fail to collect their dues, the government steps in with subsidies or borrowing and the ordinary bill-paying consumers are left to shoulder rising tariffs and endure prolonged outages.

The report concludes that until structural reforms and strict accountability are introduced, the haemorrhaging of revenue will continue, deepening the crisis in an already fragile power sector.