Pakistan News

Caretaker PM orders to cut in power sector losses

ISLAMABAD: Amid return of power cuts across the country, caretaker Prime Minister Nasirul Mulk on Tuesday directed the ministry of power to take steps for curtailment of power sector losses so as to improve overall system efficiency and sustainability of the sector.

He issued the directive during a briefing on the power sector at the Prime Minister Office attended by the power division secretary and managing directors of the Pakistan Electric Power Company and the National Transmission and Dispatch Company who are also senior officials of the power division.

The briefing came a day after the finance ministry had informed the caretaker prime minister that circular debt of the power sector would continue to haunt his government and cause electricity shortfalls because recoveries were not picking up.

According to the ministry, the country’s power generation capacity increased substantially but the power system was not improved proportionately that required a massive investment for upgrade. It also reported that the transmission and distribution system was still fragile and susceptible to minor variations in frequency and unusual events.

Moreover, the power sector authorities had been unable to ensure full recoveries of the amounts billed as most of the chief executives in the power supply chain were operating on an ad hoc basis. This problem was compounded by non-cooperation of the provinces in controlling theft and helping distribution companies recover the bills. As a result, the quantum of circular debt is expanding with the increase in generation capacity.

It was explained that technical losses — transmission and distribution — were not the cause of circular debt because these were mostly covered in consumer tariff; the actual problem stemmed from poor recovery position of bills.

As such, the more electricity is produced, transmitted and consumed, the bigger becomes the size of circular debt. At 15,000MW power generation, the circular debt was building at the rate of about Rs120 billion, while it is now set to grow to Rs360bn as generation gets closer to 21,000MW.

The prime minister was told that it was the power division’s top priority to ensure zero loadshedding at Sehr and Iftar anywhere in the country, but the situation was not in control and system operators had to resort to forced loadshedding to protect the transmission system. Also, demand was going beyond projections and the system was not able to lift the required electricity units produced by generation companies and power plants because of very poor national power system.

The power division secretary briefed the caretaker prime minister on the overall outlook of the power sector, including generation, transmission and distribution of electricity, as well as the anticipated demand and supply situation.

It was reported that compared to 18,753MW in 2013, the current available generation capacity currently stood at 28,704MW. However, due to weather conditions and the resultant reduced water supply, hydel generation in May this year remained at 3,090MW, compared to 6,333Mw in 2015.

The secretary said all-out efforts were being made to ensure strict implementation of the load management plan approved by the federal cabinet for the month of Ramazan. Discussing administrative and technical issues resulting in high system losses and power theft, the prime minister expressed concern over the huge losses in various power distribution companies and directed the power ministry to take immediate steps for curtailing the losses.

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