ISLAMABAD:
Power distribution companies have failed to tighten the noose around powerful and influential defaulters, who have to pay a whopping sum of Rs98 billion but continue to get uninterrupted electricity supply.
According to an official of the Ministry of Water and Power, the power companies are supposed to cut connections of consumers who fail to pay bills for two consecutive months. “But the defaulters are getting electricity even after receiving disconnection notices,” because most of the power companies were being run by acting heads, the official said.
Water and Power Minister Naveed Qamar has called a meeting of chief executive officers of power distribution companies today (Friday) to discuss the bill recovery efforts. They will also consider whether the targets for reducing the outstanding amount have been achieved.
On Wednesday, the Ministry of Water and Power sent a summary to the finance ministry, asking it to release Rs138 billion for onward payment to fuel supplier Pakistan State Oil (PSO), which could ensure continuous oil supply.
According to officials, many power plants have been shut as PSO has curtailed oil supply by 30 per cent because of non-payment of dues.
“This amount is part of the Rs160 billion loaned by commercial banks and approved by the Economic Coordination Committee (ECC) on January 20,” the official said.
According to the plan, the power companies will recover financing cost of this loan through tariffs on end consumers.
If the requested Rs138 billion was released, power production would improve by 3,000 megawatts, sources said, adding if the circular debt problem was not resolved, the situation would start worsening after two months when the weather gets warmer.
“The amount outstanding against running defaulters stood at Rs80 billion in September 2011, which rose to Rs98 billion in December,” the water and power ministry official said.
According to documents submitted with the ECC in the January 20 meeting, the Central Power Purchasing Agency (CPPA) was to pay Rs404.44 billion to oil and gas suppliers as well as power producers. Though the government has paid Rs1.04 trillion in the last few years, the circular debt continues to swell.
“About Rs30.5 billion is added to the circular debt every month due to power sector’s inefficiency,” the ministry official said.
Published in The Express Tribune, February 3rd, 2012.
COMMENTS (3)
Comments are moderated and generally will be posted if they are on-topic and not abusive.
For more information, please see our Comments FAQ
Where is the accountabilty or governance for these utility companies? When one has the leaders, who are so corrupt ,what do you expect of others??? Where is this Country heading? It should be a serious concern for all its neighbours!
If this is not a classic case of misgovernance in its fullest sense then nothing is.
No business can stay in business for long if it doesn't get paid for it's service/products. It's past time that Pakistan hire some pro's and get out of the business of managing energy production/distribution - maybe hard on your ego but you need to consider "outsourcing" management of critical infrastructure in Pakistan.