Financially bleeding power sector

Saturday, September 15, 2012 - A REPORT appearing in this newspaper reveals that the financially bleeding power sector is feared to face a colossal deficit of over Rs 600 billion in the ongoing financial year. It says that the inefficiency of the power sector which was 14 percent last year has increased manifolds as the deficit in recovery of dues has alarmingly increased to 35%.

The power sector, so crucial for economic development, is facing serious crisis for several years but unfortunately with the passage of every day its woes are increasing instead of decreasing despite repeated claims made by the government and steps taken to overburden the consumers. According to estimates, distribution companies have receivables of about Rs 338 billion and recoveries are dismal. In a related development, the Government is reported to have decided to assign the task of recovery of electricity dues to National Accountability Bureau (NAB), which is clear manifestation of collapse of WAPDA mechanism and failure of the administrative machinery. It seems thieves and defaulters are more stronger than the Government as recovery campaigns launched so far have proved utter failure. There are two main reasons of the current state of affairs of the power sector — outdated, loss-prune and cost-intensive generation and distribution system and ever-increasing circular debt. The failure of the Government and WAPDA to improve efficiency and effect recoveries are costing dearly to the consumers as rates of electricity are hiked every now and then. Stern action should be taken against defaulters and necessary investments made to modernize the sector to improve its efficiency.