Law abiding citizens: Only 47% consumers pay for electricity

Published: June 24, 2012
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Severe loadshedding in Punjab precipitated into riots. PHOTO: AFP

Severe loadshedding in Punjab precipitated into riots. PHOTO: AFP

ISLAMABAD: 

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.

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Reader Comments (49)

  • Cautious
    Jun 24, 2012 - 4:35AM

    In most countries if you don’t pay your electric bill they simple shut off your power — not all that complicated. Why don’t you just disconnect these dead beats from the system. Further – it takes a lot of gall to protest over power outage when you don’t pay your bill – suspect it’s unique to Pakistan.

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  • Ordinary Villager
    Jun 24, 2012 - 5:47AM

    So the Punjab’s overall recovery remained at more than 90 percent and the People of Gujranwala paid 100 percent and Faisalabadis 99 Percent and in the end they got the highest load shedding while other provinces have a recovery of less than 50 percent and still they get the due share while In Punjab we have a load shedding of more than 16 hours a day. With this data I think People in Punjab are justified to protest. Also Shame on the Tribal regions to blackmail Pakistani government as they pay less than 5 percent of the total bills. The KPK government cannot claim royalty from electricity generation when their people are not paying the Bills. The money not being paid in KPK should be deducted from NFC award of KPK so to make them more responsible. Also some penalties should be placed so that People of Karachi should also start paying electricity bills. In the end I am proud of People of Punjab that they act responsible and their Recovery is Equivalent to European countries like Italy and Spain.

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  • Jun 24, 2012 - 5:53AM

    Everyone that consumes electricity must pay at reasonable rates, not rip off rates of RPP. First Pak Gov must pay off the circular debt it owes to power providers. Then all 53% electricity theft must be stopped with the help of the law enforcement agencies. Industry should be given gas and electricity and not the opposite

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  • Jun 24, 2012 - 5:54AM

    It is becoming increasingly clear is that the government’s corruption and incompetence in the power sector, not just insufficient installed generating capacity blamed on Musharraf, are at the heart of the deteriorating energy situation in Pakistan.

    The much-heralded reforms of the power sector designed to attract more private investment are stalled, and the current financial mess is scaring away potential investors. With rising circular debt touching Rs. 250 billion, or nearly 40% of the sector’s annual revenue as estimated by ADB, new investors are hesitant to risk their capital. As a result, neither the short-term relief from load shedding nor the long term improvements in the energy sector appear to be on the horizon.

    http://www.riazhaq.com/2011/10/corruption-incompetence-hobble-pakistan.html

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  • a&a
    Jun 24, 2012 - 6:05AM

    Its time for the privatization of WAPDA, the real blood sucker….Recommend

  • Asad Malik
    Jun 24, 2012 - 6:29AM

    What I don’t understand is the supply of electricity to areas where the bill collection is negligible. Law abiding citizens should not have to suffer due to the punks roaming around using hooks to get electricity.

    They should completely shutdown electricity in areas where kundas are in abundance till the repayment of all outstanding bills is made.

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  • Sara
    Jun 24, 2012 - 7:23AM

    Funny how we call the President corrupt (despite NO evidence and NO conviction), yet there is so much evidence that the vast majority of average Pakistani citizens are extremely corrupt. Talk about hypocrisy!

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  • H.A. Khan
    Jun 24, 2012 - 8:36AM

    and people want electricity for 24 hours..They should learn to pay for the electricity they consume and No more Kundas

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  • omer
    Jun 24, 2012 - 9:00AM

    so faisalabad and gujranwala pays the bill but get some 4-6 hours of electricity. on the other hand how much does the other regions get? no wonder injustice would lead to more chos and bloodshed. is it so hard to provide electricity on the base of bills collection ratio? if you pay 100 percent bill, you should get 100 percent electricity and if you pay 47 percent bill, guess what ??????

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  • م ع ا
    Jun 24, 2012 - 10:22AM

    why we are providing electricity to thieves those do not pay their bills?????????????

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  • Faisal
    Jun 24, 2012 - 10:35AM

    punjab pays bills but other provinces don’t. And the profits of punjab discos are shared by whole country. The reward for punjab is that there is more load shedding here then in other provinces.

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  • Jun 24, 2012 - 10:57AM

    Disaster, disaster and more disaster.

    When there is no electricity, factories do not work, so they do not pay. When the Sindh government does not pay its bills, you cannot expect IMF, WB, and ADB to pay our bills. When the elite do not pay their bills, are they justified in holding ministerial slots and romping away on overseas visits? When kundas are, seen forming an intricate and complex arrangement of electric wires at Merewether Tower, one cannot expect free flow of electricity. So we cannot blame anybody but ourselves.

    It will take Hercules to ctrl-z this imbroglio. Salams

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  • Mirza
    Jun 24, 2012 - 11:06AM

    Don’t worry Imran Khan would make all these people honest and they would start paying all their bills and income tax in 90 days. More than half of the population who does not pay their bills and even less pay income tax, IK would turn them from dishonest to honest. I am not being critical, let us hope he is tested.

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  • Usman
    Jun 24, 2012 - 11:21AM

    Why don’t you put that sindh has no loadsheding despite they don’t pay any penny.In Punjab everyone pays bill but still unable to see a bulb lightening.

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  • Eeman
    Jun 24, 2012 - 11:28AM

    Welcome to Islamic Republic of Pakistan!

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  • Usman
    Jun 24, 2012 - 11:36AM

    1.Why dont you put that sindh has no loadsheding despite they don’t pay any penny.In Punjab everyone pays bill but still unable to see a bulb lightening.

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  • Usman
    Jun 24, 2012 - 11:47AM

    Most foreign remittences are brought in country by punjabis.all the major industries are situated in punjab,70 percent of the pakistan is punjab,Every university in punjab has quota for kashmiris and bolouchs,But our voices goes unheard,would that punjab be a separate country so we can live in peace.

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  • Usman
    Jun 24, 2012 - 11:52AM

    @Eeman why don’t liberals like you move to the united states.We are happy being fundamentalists :)
    Get a life losser

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  • Usman
    Jun 24, 2012 - 12:01PM

    700 MW of our electricity is being transfered to the karachi and we pay their bill,Some one rightly said that karachi is the cheepest place on earth but he didnt mentioned its people are too!

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  • Saqib
    Jun 24, 2012 - 12:22PM

    Dear Usman, Thou Karachi has load shedding more than it should be the problem is that Government has to keep Karachi running as you should be aware of the fact that Karachi produce 60% to 70% of the revenue and 70% of tax collection comes from Karachi if you want to be fed properly demand No load shedding in Karachi at all. Think about Pakistan.:) and refrain from cheap Mentality and Remarks.

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  • Raheem Bukhsh
    Jun 24, 2012 - 12:24PM

    Faisalabad and Gujranwala technically afford Pakistan through their industry. Karachi just has port and head offices. These 2 cities pay 99.5% of their dues and it is such a shame that in both of these cities its electricity shut down for 16-18 hours each day.

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  • Usman
    Jun 24, 2012 - 1:33PM

    @saqib i was not aware of the info you just have gave us,karachi is a port and which revenues are you talking about,Faislabad,Sialkot,Gujranwala,Gujrat are the reason of revenues,karachi only receives demurrages nothing more than that

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  • Saqib
    Jun 24, 2012 - 2:01PM

    I wish to agree with you, It is true that Karachi should not take burden of Whole country, I just said what everyone use to say about Karachi,from Wikipedia” Karachi is the financial and commercial capital of Pakistan. In line with its status as a major port and the country’s largest metropolis, it accounts for a lion’s share of Pakistan’s revenue.” Read the fact, Thou I agree with you a lot revenue, sales, customs and so on come because head offices and port is here and link to all major cities, so what is the bottom line, Karachi is the back bone through which whole country Business Run no other city can match it.

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  • Saqib
    Jun 24, 2012 - 2:09PM

    What Wike pedia says: PricewaterhouseCoopers study released in 2009, which surveyed the 2008 GDP of the top cities in the world, calculated Karachi’s GDP (PPP) to be $78 billion[11] (projected to be $193 billion in 2025 at a growth rate of 5.5%).[11] It confirmed Karachi’s status as Pakistan’s largest economy, well ahead of the next two biggest cities Lahore and Faisalabad, which had a reported GDP (PPP) in 2008 of $40 billion and $14 billion, respectively.[11] Karachi’s high GDP is based on its large industrial base, with a high dependency also on the financial services sector. Textiles, cement, steel, heavy machinery, chemicals, food, banking and insurance are the major industrial sectors contributing to Karachi’s GDP.

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  • Waqar
    Jun 24, 2012 - 2:26PM

    @ Usman
    Did you forget if Karachi doesnot get this you will not get your 12 hours of electricity….Get a life you looser…..

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  • Expatriate
    Jun 24, 2012 - 2:56PM

    Figures quoted appear distorted.Why not expose those who are habitual defaulters.Actual generation said to be74 trillion and billing of72 trillion ,thus resulting in loss/ theft of 2 tri.or less than three percent.

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  • Ordinary Villager
    Jun 24, 2012 - 3:35PM

    @Saqib: Do you know Pakistan is a Federal Country and in Federal Lands Tax are usually deducted of all products imported at one place and he it is Karachi. Do you know 70 percent of the total products traded in Karachi are actually destined from and destined to Punjab. It is only because Pakistan is a federal country their GST and other Taxes are deducted in Karachi. So keep your record straight. If from today Punjab will deducting its tax from Punjab rather than from Karachi than there will be a decrease of more than 70 percent revenues. So dont mislead the people with wrong types of claims.

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  • Usman
    Jun 24, 2012 - 4:44PM

    @saqib i am speechless over your innocense that,karachi is a hub,not that manufactural area,hub is a route joiner,electricity should be given to the cities where they are produced,punjab’s imports are brought through karachi,punjab products are exported from karachi’s sea port,if punjab will n0t get power,how your karachi’s business will run,read from the last its gepco which is recovering 100 % and i m from sialkot

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  • Usman
    Jun 24, 2012 - 4:57PM

    @saqib a month ago when german businessmen were here at sialkot,they said we will arrange electricity for sialkot,that was a shame to us,that people from abroad care about our city but our country does not,indian producers uses sialkot’s brand names for their products to export.(india boders sialkot).At last,people like u from big cities are entitled to grew on our money.

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  • nasir jamshed
    Jun 24, 2012 - 5:07PM

    This is insane, those who actually do pay the bills–Gujranwala 100%, and Faislabad 99%–are getting very little of it, and those who pay very little Karachi and rest of country outside Punjab are enjoying the benefits. Punjab government needs an independent energy policy independent of federal government, why should we pay and not get any electricity.

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  • Ordinary Villager
    Jun 24, 2012 - 5:13PM

    @nasir jamshed: Punjabis are always blackmailed on the name of Pakistan. If Punjab will announce its independant Policy then Other Provinces who are actually being paid by Punjab in terms of bills of electricity will say that Punjabis are talking about Nationalism and they will blackmail them that Jaag Punjabi Jaag Slogan is there and that is not good for Paistan. Punjabis are slaves of the Identity Pakistan and it is alright to talk about nationalism for any other Ethnicity but Punjab dont have any right whatsoever. So the only option is to Pay the bills and live as Obedient servants otherwise you will be blackmailed by others. By the way Your so called Imported Leader Imran Khan is silent on this issue.

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  • saqib
    Jun 24, 2012 - 5:27PM

    I am misleading what a joke didn’t I gave justification, A link from Wikipedia, Rather than just a Hypocritical talk as most of my countrymen doing “Get Real”, dont talk without facts, can someone share Pricewaterhousecooper research? Talking in air with lot of Emotions doesn’t under facts.

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  • saqib
    Jun 24, 2012 - 5:32PM

    For all losers and who live in state of denial, Google Karachi Revenue and see the facts, Its not Rocket Science.

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  • ali
    Jun 24, 2012 - 5:46PM

    Sindh is the biggest defaulter !Recommend

  • Ordinary Villager
    Jun 24, 2012 - 5:54PM

    @saqib: I am an Economist and i know better than you. I dont need to Google. I think you should google how economies of Singapore and Dubai works. Also peep into the Economic revenue generation by Hong Kong. Karachi is just a hub for Business as it is port city. I have already explained that Taxes are deducted there for all the products even the products destined for Afghanistan are Taxed in Port city of Karachi. Punjab’s population is 60 percent of Pakistan and 70 percent of total products imported are consumed in Punjab. Punjab imports more than 10,000 luxury cars and their tax is deducted in Karachi as well Punjab produces the 80 percent wheat of Pakistan. 70 percent of Dairy comes from there. They have the biggest share of Heavy Industries. Their textiles export worth more than 10 billion USD. Their Rice exports ( Agains tax is deducted in Karachi ) stood at around 3 billion USD. Also more than 80 percent of Forex reserves of Pakistan belong to the people of Punjab as they are abroad and they sent money back home and as a result Pakistan can sustain in terms of its payments. So please take a look at some of the facts that how Federal Nations work. If a Dry Port would be established in Punjab and taxes will be deducted there then obviously 70 percent of the revenue will be deducted in Punjab but again Pakistan is a federal country and many people are misleading the people with the wrong facts.

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  • saqib
    Jun 24, 2012 - 6:09PM

    @Ordinary villager, thanks for enlighting us, Totally Agree with you every thing goes out and comes in through Karachi, Thanks for endorsing my point, so being Karachi as a Backbone of Pakistan there should not be any load shedding.:)

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  • Ordinary Villager
    Jun 24, 2012 - 6:45PM

    @saqib: Mr Saqib again you are like in Blackmailing mode that Support us otherwise you are Doomed and we dont have to pay but you are dependent on us. This type of thinking is worst in my view. Why not talk about solutions rather than playing politics here.???? Brother the solution is simple that we dont have to say who is contributing what. Pakistan is a federation and In my view even the tribal regions are contributing in Economy of Pakistan. So the Solution is simple and that Federal Government will only be responsible for Production of Electricity while Provinces will be responsible for Buying and Distribution of Electricity and the Circular debt will be transferred to the Provinces and it will be the responsibility of Provinces to take hold of Circular debt as they are the ones who are buying Electricity and are failing at the same time to get any type of bills. The Provincial Autonomy in electric distribution and generation needs to be Entertained and provinces now have to be responsible to take hold of generation of electricity and also they should be responsible for bills collection rather than the federal government. Federal government will only act as a Laison between Power producers and Provinces and this is the best solution.

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  • saqib
    Jun 24, 2012 - 7:11PM

    Bro, I am not in Blackmailing mood, I just commented here when saw most of the comment disregarded Karachi, Infact Blaming it for power shortage in punjab one of the brother even said that Karachites are “Cheap”. While ignoring the fact Karachi gives highest Taxes to Pakistan (Just Salaried person only for example), being a cosmopolitan People in Karachi are bound to pay electricity bills, Karachi is the only place in Pakistan where people comes to work and Earn, from each and every part of country.Karachi is more important then any other city of Pakistan which you agreed with your facts and figure. So no hart feelings. take a chill pill.

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  • Ali S
    Jun 24, 2012 - 7:26PM

    I’m from Karachi and here KESC has specific loadshedding quota for specific areas depending on revenue collection – my area has 3 hours of loadshedding, certain areas (those that steal most of their electricity) have up to 12 hours loadsheding while some have zero hours. Such system should be introduced in all urban areas if not already so it’s easier to weed out ‘kunda’ users. And stop blaming Karachi for Punjab’s problems, it’s very commendable that Faisalabad and Gujranwala pay nearly all their electricity bills but hold your own leaders accountable for it.

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  • Jun 24, 2012 - 8:08PM

    Per capita energy consumption in Pakistan today is just 15 million BTUs, about the same as India’s but far below the world average of 70 million BTUs. Instead of fighting about sharing a small supply, the focus needs to be on growing it with a comprehensive national energy policy that makes sense. Cost is very important part of it. As the nation develops and the energy demand increases, the policy makers have to try and produce as much of the needed energy at costs closer to the low-end of the range from $2 for coal to $20 for oil per million BTUs with domestic gas around $4 per million BUTs. The best option is to accelerate development of 51 trillion cubic feet of shale gas near Karachi.

    http://www.riazhaq.com/2012/06/comprehensive-energy-policy-for.html

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  • Anonymous
    Jun 24, 2012 - 8:49PM

    i m sick of this baseless calculation of 70% tax collection from karachi. where shud revenue of a factory be recognised? where actual production is or where few babus are sitting in head office?Recommend

  • Zubair
    Jun 24, 2012 - 9:28PM

    Punjab have suffered enough under the federation of Pakistan. Punjabis are arguably the most hard working people in Pakistan and they pay their dues/bills on time and fully while others too live off of our resources of food and yet we Punjabis suffer. The day is near when Punjab may become Pakistan’s next Balochistan. That day is near.

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  • Javed
    Jun 25, 2012 - 4:08AM

    @Pervaiz Lodhie: Sir, I just want to let you know that I really admire your work. You are doing an amazing job. Thank you.

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  • Javed
    Jun 25, 2012 - 4:20AM

    @Sara: Its called Karachigate. Evidence enough?

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  • Zed
    Jun 25, 2012 - 12:46PM

    Talking about unpaid bills… Ever thought how much the army pays for the consumed electricity?

    The army pays NOTHING !!! Just think about it and find out the facts yourselves.!!!Recommend

  • Ahmer Ali
    Jun 25, 2012 - 1:46PM

    WAPDA has to be thankful and grateful to the nation most especially importantly of poor/common man who is leading miserable and existence life and despite massive load shedding and increasing bills on monthly basis WAPDA has recovered 47%.

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  • Saad Khalid
    Jun 25, 2012 - 3:08PM

    Why cant we move to a prepaid charging model? A sim based mechanism can do the trick, question is whether “We as a Nation ready for it”.

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  • Vigilant
    Jun 25, 2012 - 8:14PM

    Anyone with gun or influence does not pay electricity bills……not just homes whole factories of influential people are running without paying single penny to authorities

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  • Hammad Ansari
    Jun 26, 2012 - 9:37PM

    @Usman: Who said there is NO LOADSHEDDING in sindh?? :P

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