NEPRA released its “State of the Industry Report 2023-24,” painting a grim picture of electricity sector. The findings, though alarming, come as no surprise. High electricity costs, inefficiencies and a mounting circular debt crisis are issues that have plagued the sector for years.
The report sheds light on a staggering Rs591 billion added to the circular debt in FY2023-24, largely due to excessive transmission and distribution (T&D) losses and weak recovery of billed amounts. This reflects a systemic failure to improve operational efficiency and curb revenue leakage. Furthermore, overbilling practices and the imposition of the Circular Debt Surcharge, which penalizes honest consumers for the defaults of others, further expose the incompetence within the sector. These issues have been well-documented in previous reports and yet little substantial action was taken. The continued inefficiencies in billing, recovery and governance, compounded by weak oversight of distribution companies (DISCOs), underline the inertia that has characterized the power sector. Instead of addressing the root causes of these problems, the authorities have opted for short-term fixes and superficial measures, which only offer temporary relief while leaving the broader issues unresolved.
NEPRA’s call for urgent reforms, including granting greater autonomy to DISCOs, evaluating the performance of management and boards and addressing inefficiencies in billing and revenue collection, is a step in the right direction. However, these recommendations are not new. They have been proposed time and again, but successive governments have failed to implement them meaningfully. We expect that the present government will do the needful to address the chronic issues in power sector. The process of reforms has been initiated but it needs to be further accelerated. It is a must for sustainability of the power sector. The challenges facing power sector are complex, but they are not insurmountable. What is needed is a commitment to long-term, sustainable reforms. The time for action is now.
