Electricity crisis: Power utilities wrote off Rs25.8b, documents show

President’s office may have a role to play in the move which Hesco and Sepco insist received formal approval.

ISLAMABAD:

As the Rs500 billion circular debt of the power sector continues to weigh down on electricity consumers, the Hyderabad Electric Supply Company (Hesco) and Sukkur Electric Power Company (Sepco) have fraudulently written off a whopping sum of Rs25.8 billion against their consumers, sources said.

An official document of the Sindh government’s energy department, a copy made available with the Express Investigation Cell (EIC), indicates that Hesco and Sepco wrote off Rs25.8 billion in March 2013 – the last month of the Pakistan Peoples Party’s tenure at the centre and province.

Officials from the utility firms claim that the write off was implemented after formal approval was sought from the sub- committee of the Council of Common Interest (CCI) and its respective board of directors. The procedure adopted, however, is not in line with the rules.

According to the official document, the president’s office may have a role to play in the write off.



The document states that the general secretary to the president intervened in the matter and arranged for an agreement between Pepco chief and Sindh finance secretary for a resolution of the billing dispute which subsequently led to write off of Rs25.8 billion of power distribution outstanding against different provincial departments.

Wapda rules prohibit distribution companies from any write off of its outstanding amount.

Although Hesco’s CEO claims to bring a turn around as far as reduction of losses is concerned, the official report fixes his company’s losses for July 2012 and April 2013 at 26.7%.

Sepco’s performance for the same period is even worse. Its line losses between July 2012 and April 2013 remained as high as 38.9%.

The official statistics show receivables of Sindh as of April 30, 2013 at Rs42.7 billion. For the same period, receivables of Punjab were only Rs8.6 billion, and receivables of Balochistan and Khyber-Pakhtunkhwa  stood at Rs6.1 billion and Rs19.5 billion, respectively.

When contacted, Hesco chief Muzaffar Ali Abassi confirmed the write off.  He claimed that it was implemented after formal approval of the company’s board of directors.

Sepco chief Noor A Dayo said his company is working in an area where the culture of power theft and non-payment of legitimate dues is seen as a routine matter.

Official figures indicate that Sepco’s line losses are continuously on the rise.

Published in The Express Tribune, July 1^st, 2013.