The government has failed to collect Rs495 billion worth of electricity bills in the last eleven months, taking recovery ratio to 47%, one of the lowest ever in the country’s history.
The unrecovered amount is two times more than what the government claims is the circular debt, which has caused massive load-shedding across the country, leading to riots across Punjab and Khyber-Pakthunkhwa.
According to a fact sheet, prepared by the finance ministry on the basis of information provided by finance department of Pakistan Electric Power Company, from July to May (2011-12) all the distribution companies, including Karachi Electric Supply Company, billed consumers Rs895.3 billion while collection remained at only Rs400.8 billion, which is 47% of the total billing.
The low collection will make it difficult for power distribution companies to payback power generation companies and aggravate the power crisis.
During this period, Syed Naveed Qamar was the Federal Minister for Water and Power, who has recently been assigned the portfolio of Minister for Defence after he failed to improve electricity supply in the country.
The collection has significantly dipped despite the fact that the government has obtained a $325 million loan from the Asian Development Bank to improve the efficiency of power distribution companies. A cabinet committee on energy, headed by Finance Minister Dr Abdul Hafeez Shaikh also could not improve the situation.
According to the details, February was the worst month in terms of collection when the power distribution companies (Discos) collected only Rs26 billion against total billing of Rs99.2 billion, showing a gap of Rs73.2 billion in a single month. October was the second worst month when the Discos collected only Rs45.9 billion against total bills of Rs114.1 billion, showing a gap of Rs68.2 billion.
In May this year, the total collection remained at Rs35.9 billion against the billing of Rs87.4 billion- a gap of Rs51.5 billion. In April, the Discos billed Rs79.4 billion but collected only Rs30.2 billion, in March against Rs51.8 billion billing the collection remained at Rs31.3 billion and in January the collection was Rs29.3 billion against total billing of Rs77 billion.
November was the only month when the collection rose to 71% as the Discos managed to collect Rs41.2 billion against total bills of Rs57.6 billion.
A senior government functionary attributed political interference in running the affairs of the Discos as the main reason behind deterioration of an extreme nature. He admitted that former Water and Power Minister was running the Discos affairs and appointed people according to his liking and disliking. Naveed Qamar was not available for comments.
Ministry of Water and Power view
The spokesman for the Water and Power Ministry contested the low collection figure. Zargum Khan said that Discos excluding KESC billed Rs534.3 billion consumers from July 2011 to April 2012 and managed to collect Rs461 billion, showing 86.3% recovery rate. The amount is inclusive of distribution margins of Discos.
He, however, admitted that during the first ten months of the fiscal year all power generation companies generated 74 trillion units of electricity but Discos sold 72 trillion units while the rest were lost on account of technical losses and theft.
100% collection of data is not possible as 10-12% of the billed amount is retained by power distribution companies as distribution margins while there are also some justified line losses, Khan said.
To a question, he said Rs166 billion dues were outstanding against private consumers and the amount has surged due to stay orders granted by courts against fuel price adjustment charges. Khan admitted that in some cases collection was as low as 5.5% (tribal regions) and 29% (Quetta) but in other cases the ratio was 100% for Gujranwala and 99% for Faisalabad regions.
Published In The Express Tribune, June 24th, 2012.