ISLAMABAD: Power Division has directed Distribution Companies (Discos) to outsource bills recovery to the private sector across the country, well-informed sources told Business Recorder.
Discos are mostly headed by junior officers at present on the basis of acting charge as they are practically being administered by the Power Division. The office of Managing Director of the dysfunctional Pakistan Electric Power Company (Pepco) is also controlled by the Power Division, either through an Additional Secretary or Special Secretary, which is cited as the main reason for the dismal performance of Discos.
The Government is facing a very thorny situation these days with respect to getting the power to impose 10 percent surcharge on electricity bills with the National Assembly Standing Committee on Power delaying the approval despite being informed that this is a prior condition of the staff level agreement with the IMF on second to fifth review and without it the IMF's Board will not approve the release of the $500 million, said an official.
At a recent meeting of National Assembly Standing Committee on Power, Secretary Finance and Secretary Power were visibly upset when the proposal did not sail through.
The outstanding arrears of Discos are over Rs 1 trillion of which major chunk is related to private sector.
According to official data, recovery of Discos posted a negative growth of 4.62 percent to 87.98 percent from July-June, 2019-20 as compared to 91.40 percent in the corresponding period of 2018-19. The data reveals that recovery in July 2018-19 was 89.63 percent which declined to 88.69 percent (reduction of 0.93 percent), in August from 91.71 percent to 89.63 percent (2.08 percent reduction), September from 92.68 percent to 92.46 percent (0.23 percent reduction), October from 95.51 percent to 93.85 percent (1.66 percent reduction), November, 96.11 percent to 95.47 percent (0.64 percent reduction), December from 98.52 percent to 96.80 percent, January from 92.77 percent to 91.71 percent (1.06 percent decline), February from 90.93 percent to 91.75 percent (0.81 percent growth), March from 93.51 percent to 84.26 percent (9.25 percent decline, April from 89.40 percent to 56.90 percent(32.50 percent decline), May from 91.69 percent to 69.27 percent (22.42 percent reduction) and June from 92.99 percent to 95.39 percent (2.40 percent growth).
The sources said the power sector performance during almost the entire year was poor due to Covid-19. However, recovery is now evident with the resumption of industrial and commercial activity. The electricity sales have also increased due to government's package for industry on incremental consumption.
National Electric Power Regulatory Authority (Nepra) approves Discos tariffs on the basis of 100 percent recovery which is not possible as some areas in the country especially, in KP, Sindh and Balochistan, recovery is just 20 percent or even less than.
"Now we are considering Discos outsource recovery to the private sector through incentives so that recovery can be improved in difficult areas," the sources maintained.
In this regard, Power Division has written letters to all the Discos to prepare their suggestions and send them back to the Power Division within a week so that the plan may be implemented.
"We have directed Discos to immediately start pilot projects for this purpose," the sources further added.
The previous government had also made such endeavours to improve Discos recovery but the results had not been successful," said an official.
Copyright Business Recorder, 2021
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