Caretaker govt working on ‘Electricity Theft Control Act’ to curb losses

Caretaker Minister for Energy, Power and Petroleum, Muhammad Ali on Wednesday said the government is working on the Electricity Theft Control Act to curb transmission and distribution (T&D) losses in the country.

Addressing media persons in Islamabad, the minister shared that Pakistan sustains annual losses to the tune of Rs589 billion due to electricity theft and non-bill payment.

“We are working on an Electricity Theft Control Act, under which we would establish an enforcement infrastructure across the country,” said Ali. “Similarly, special courts will be formed as well.

“We target to finalise the draft of this law in two to three weeks, and move it for approval and implement it as an ordinance. We target to reduce the T&D losses as much as possible,” he added.

Sharing the background of electricity theft in Pakistan, Ali said that there are 10 distribution companies (DISCOs) in the country, with K-Electric having its own distribution network.

“Because of these losses, consumers who pay their electricity bills are charged higher rates.

“Unless electricity theft and non-payment of bills is controlled, the electricity bill cannot be lowered.”

He said T&D losses sustained by distribution companies including IESCO, LESCO, GEPCO, FESCO and MEPCO stand at Rs100 billion out of a total billing of Rs3,044 billion, which shows a 3% loss.

“On the other hand, T&D losses of PESCO, HESCO, QESCO, SEPCO, TESCO and AJK stood at Rs489 billion, out of total billing of Rs737 billion, which translates into 60% losses,” shared the caretaker minister.

He said that due to a uniform electricity rate, customers of sound performing distribution companies are charged higher rates.

“We have got all the data, and we will use it to take our next step. We will initiate crackdown in those areas, where electricity theft is higher,” he added.

Sharing the proposed solutions, the caretaker minister said intervention through technology will be done in areas where electricity theft is low, which includes implementation of transformers and smart metering.

“In those areas, where loss is around 30-60%, we are considering involving management of the private sector. Whereas, enforcement measures would be taken in areas with over 60% losses, which consists of 2,085 feeders,” he added.

He said that the government seeks to improve the management of the distribution companies, and is monitoring the board of directors.

“We have prepared a list of officers, who are involved in electricity theft. They are being reshuffled and will be removed from field jobs,” he said.

A provincial level task force will be formed, which will include officers from federal and provincial levels.

Ali said that work on reducing capacity payments is in progress, however, it will take some time. “The caretaker setup in taking initiatives, which involves less time duration,” he said.

The caretaker minister said the setup is considering two options of privatisation or provincialization of DISCOs. “We will soon decide which is the right way forward,” he said.

On power sector data shared with the International Monetary Fund (IMF), Ali said that the government awaits response from the Washington-based lender.

“As soon as an agreement is reached with the IMF, we will share it to the public,” he said.

Earlier, Business Recorder reported that the government has yet to finalise relief in soaring electricity bills to consumers as the IMF has conveyed its disagreement to the data provided by the federal government.

Meanwhile, the power minister also shared that the issue of providing free electricity units to WAPDA employees is under discussion.

Rashid Mahmood Langrial, Federal Secretary for Power, said that they eventually intend to privatise DISCOs. However, some are not currently in the state of being privatised.

“We are seriously considering moving for IPOs (Initial Public Offering) of high-performing DISCOs including IESCO, GEPCO and FESCO,” Langrial said.