Another Rs 151 billion finance facility arranged by the Federal government from domestic banks through Term Finance Certificates (TFCs) at 14 percent interest rate for the sick Pakistan Electric Power Company (PEPCO) to pay off its liabilities is bound to increase the electricity tariff as PEPCO will pass on the huge interest to the consumers, experts told Business Recorder here on Friday.
It may be added that the government, by providing sovereign guarantees had already arranged two TFCs in 2009 and 2010 of Rs 80 billion and Rs 82 billion, respectively for debts swapping and fresh cash injection into the sick public sector institution at the rate of KIBOR plus 200 bps for addressing the issue of circular debt so that it could increase thermal-power generation.
They said that accumulated figure of circular debt for Pakistan Electric Power Company (PEPCO) had gone up to staggering Rs 350 billion but no serious effort has been made to recover outstanding dues from the governments of Sindh, Punjab, KPK, FATA and Balochistan.
Condemning inefficiency of PEPCO and corruption of the Federal government Convenor Punjab Water Council and a prominent agronomist Farooq Bajwa said that instead of providing loans at high interest rate to the electricity distribution companies at the expense of the consumers, the PEPCO should improve electricity bill collection in interior Sindh, KPK, FATA, and Balochistan as its overall line losses across the country have reached up to 19 percent.
The highest line losses were observed in Peshawar Electric Supply Company (PESCO) and Hyderabad Electric Supply Company (HESCO) regions of up to 35 percent, he added. Bajwa opposed Rs 24 billion subsidy to KESC, a private concern from the national exchequer by the government which, he said, is a burden on the law-abiding consumers who regularly and honestly pay their utility bills.
However, a spokesman of Ministry of Water and Power told this scribe that this fresh heavy cash injection will enable the power generation companies to buy fuel for their shut down thermal power producing houses. He hoped that more than 2,000MW electricity would be added to the national grid after debt swapping for the IPPs had reduced their production to 3,500MW from their capacity of over 10,000MW due to non-payment of their dues in billions of rupees.
Meanwhile the Lahore Electric Supply Company has started installation of three phase Time of Day (TOD) meters in the metropolis to reduce the usage of electricity by increasing rates in peak hours and reducing rates off-peak hours. Time of Day metering (TOD), involves dividing the day, month and year into tariff slots and with higher rates at peak load periods and low tariff rates at off-peak load periods.