Plug the leaks

Pakistan's power sector is structurally haemorrhaging. The regulator's latest performance review confirms what consumers and industry have long experienced — a distribution system losing over Rs1 trillion annually through transmission inefficiencies and unpaid bills, while failing to deliver reliable electricity.

Transmission and distribution losses among ex-Wapda distribution companies stand at 17.55%, alongside 3.5% in unrecovered billing. That translates into roughly Rs910 billion worth of energy dissipated within the network in FY25. Once K-Electric's contribution is factored in, cumulative losses exceed Rs1 trillion. No distribution company achieved its technical loss targets. The resulting financial hit — Rs265 billion — was borne most heavily by Pesco, Qesco, Sepco and Lesco. These are the primary drivers of circular debt. The persistence of high technical losses reflects ageing infrastructure and overloaded feeders. Commercial losses, meanwhile, expose entrenched electricity theft and compromised billing systems. The state's reliance on revenue-based loadshedding has neither curbed theft nor improved recovery. Instead, it has deepened consumer resentment.

To put it straight, without reducing theft and operational inefficiencies, financial bleeding will continue. This can only be achieved through disciplined, measurable reform rather than periodic crackdowns. Theft must be tackled at the feeder and transformer level through advanced metering infrastructure and GIS-based mapping to identify loss hotspots, followed by strict enforcement against organised pilferage rather than indiscriminate load-shedding. Distribution companies must be placed under performance-linked management contracts with clear loss-reduction targets. At the same time, the grid must be strengthened through investment in high-voltage transmission corridors.

Pakistan's power crisis has long been framed as a tariff problem. It is, more fundamentally, a governance and infrastructure problem. Until this fundamental is realised, the sector will continue to oscillate between deficit and waste.