Chronic power defaulters: Govt faces challenging task of over Rs1trn recovery

ISLAMABAD: The federal government has the challenging task of recovering the huge amount of over Rs1 trillion from chronic running defaulters of five power Distribution Companies (Discos) of Sindh, Khyber Pakhtunkhwa (KP) and Balochistan.

Last week, Minister for Power, Sardar Awais Ahmad Khan Leghari at a press conference revealed that total stock of receivables stood at Rs 1.9 trillion as of February 28, 2024. The stock of circular debt is about Rs 2.6 trillion.

Background interviews with officials indicate that the share of Punjab-based Discos i.e. Islamabad Electric Supply Company (IESCO), Gujranwala Electric Power Company (Gepco), Lahore Electric Supply Company (LESCO), Faisalabad Electric Supply Company (LESCO) and Multan Electric Power Company (MEPCO) in power sector’s running defaulters was zero as of February 28, 2024.

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However, the stock of running defaulters of five other Discos, Peshawar Electric Supply Company (PESCO), Tribal Electric Supply Company (TESCO), Hyderabad Electric Supply Company (HESC), Sukkur Electric Power Company (SEPCO) and Quetta Electric Supply Company (QESCO) was Rs 1.047 trillion as of February 28, 2024, of which Rs 70 billion are against government entities/departments.

The details of debt stock of running of five Discos of KPK, Sindh and Balochistan is as follows: (i) PESCO, Rs 120 billion; (ii) TESCO, Rs 54 billion; (iii) HESCO, Rs 141 billion;(iv) SEPCO, Rs 165 billion; and (v) QESCO, Rs 496 billion.

According to the official, amount due from permanently disconnected consumers stood at Rs 165 billion, which is also part of total outstanding receivables of Rs 1.074 trillion. The official maintained that Discos require support from the provincial government to take action against permanently disconnected consumers to recover Rs 165 billion.

“FIRs should have been lodged against these PDs to recover due amount of Discos” the official added.

However, there a prevalent very strong impression within the federal government is that the amount which is pending against running defaulters is massively ‘overbilled’ by the Discos to hide their own role in the theft.

“Millions of rupees’ bills have been sent to poor consumers in the past by five Discos and Rs 500 or Rs 1000 is added every year to their total amount to keep their status of a running defaulter,” the official continued.

The amount of outstanding claims of subsidy of Rs 203 billion of Distribution Companies is also included in outstanding receivables.

The stock of receivables against government/public sector entities stood at Rs 289 billion, of which share of IESCO is Rs 97 billion, LESCO, Rs 23 billion, Gepco 16 billion, Pesco Rs 46 billion, the amount of receivables against other Discos was about Rs 50 billion.

The amount of Rs 24 billion is LESCO’s stuck amount of General Sales Tax (GST). Another Rs 65 billion is stuck due to litigation in different courts.

The official contended that due to litigation of Rs 25 billion in the court, the financial impact of interest is being added to the circular debt.

Minister for Power, Sardar Awais Khan Leghari in a letter to Chief Minister, KPK, Ali Amin Gandapur stated that PESCO and TESCO are among the low performing companies which are contributing to ever increasing circular debt.

According to the letter, during the current financial year, combined loss of Rs 188 billion which includes under recovery and loss above NEPRA’s threshold is anticipated in PESCO and TESCO.

“Critical high loss areas identified in PESCO include D.I. Khan, Bannu, Karak, Kohat, Shangla and ex FR regions. TESCO operates in former tribal areas where there is serious problem of no- recovery and non-materialization due to which the company’s loss maybe as high as Rs 51 billion in the current financial year.

The government launched a drive against theft, which yielded only Rs 90 billion in six months. Now, the FIA’s senior officials have been deputed in Discos to identify officials conniving with power thieves and suggest punitive action.

Copyright Business Recorder, 2024