ISLAMABAD: The Asian Development Bank (ADB) has said that up to 70 percent of the serviced population in Pakistan does not pay electricity bills, partly because of an inability to pay but also due to inefficiencies and rampant irregularities in billing and collection.
In a report titled ‘Pakistan National Urban Assessment’, the Bank has claimed that Pakistan’s inadequate tariff regime is a complex issue undermining the Discos financial sustainability.
It particularly besets Discos operations in rural areas, where 50% to 70% of the serviced population does not pay their bill, partly because of an inability to pay but also due to inefficiencies and rampant irregularities in billing and collection.
The Bank argued that by issuing stay orders delaying legal procedures for a year and allowing offenders of meter tampering and related ordinances to merely pay a fixed fine, courts contribute to the problem.
According to the Bank only the privatised K-Electric is financially sustainable.
The company used to suffer significant losses but recovered after privatization and has since operated from its revenue collections. Despite considerable resistance, it has succeeded in metering its expansive 6,500 kms service area, which goes beyond Karachi to five districts in Sindh and Balochistan, reducing electricity theft and a corresponding loss in income.
Through load-shedding, it has controlled losses from illegal connections that still exist in some areas. Notwithstanding the successful model presented by K-Electric, political issues and strong resistance from trade unions have blocked the privatization of other Discos.
In response, the government is considering segmentising utility operations and infrastructure expansion, e.g. between urban and rural areas, to reduce costs and control losses. The potential of publicly offering the companies on the stock market with the government keeping most of the shares, is also being studied.
Copyright Business Recorder, 2024