ISLAMABAD — The caretaker government has announced modifications to the Electricity Theft Control Act via an ordinance, marking a significant step toward resolving the long-standing problem of power sector losses and rising circular debt. The initiative’s objective is to set up specialized tribunals for preventing electricity theft.
The news was announced at a press conference in the nation’s capital by the caretaker energy minister, Muhammad Ali, together with the interim information and broadcasting minister, Murtaza Solangi, and the secretary of the energy and power division, Rashid Mahmood Langrial.
By December 2022, Pakistan’s circular debt had ballooned to Rs2.536 trillion, an alarming increase of Rs343 billion in only the current year alone, most of which could be traced back to the incompetence of the previous government. According to the energy minister, Pakistan loses an estimated Rs589 billion each year due to electricity theft, making it one of the country’s most pressing problems.
He went on to say that the government would take a two-pronged approach to combating electricity theft, saying, “This means that consumers who pay their bills are effectively subsidizing those who steal electricity.”
The minister insisted that the government would take technological action in places with low levels of theft by installing smart meters and transformers, while in areas with high levels of theft, enforcement measures would be taken, including raids on illicit connections and prosecution of offenders.
He announced that the federal government will be selling off or decentralizing the Discos. He explained that this would let federal officials to focus on policy and regulation, while the Discos themselves would be overseen by the private sector or individual state governments.
To combat power theft, he promised to form a team that would coordinate with the Energy and Power Division’s inspector generals, commissioners, and deputy commissioners on a local level.
Noting that five underperforming Discos were facing losses of Rs100 billion because of insufficient electricity bill recovery due to bad management, he also announced plans to overhaul ten Discos.
Companies in Peshawar, Hyderabad, Quetta, Sukkur, the tribal areas, AJK, Mardan, and Shikarpur are in the red to the tune of Rs489 billion, as noted by the energy minister.
He promised that new electricity theft courts would be established by law.
The caretaker minister for information spoke at the event and dispelled rumors that ministers were getting free power.
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After an investigation found that power thieves were at fault due to “human and technical error,” he promised that the Power Division will take strong action against them.
Solangi also noted that power pilferage was a major cause contributing to rise in electricity bills in the country, and he ruled out enacting any law beyond the constitutional scope of the caretaker administration.
He mentioned that power theft in Pakistan cost the country Rs589 billion in a single year and advocated for changes to be made in the energy industry.
The electricity secretary revealed that the government is planning initial public offerings (IPOs) for three efficient power distribution businesses to help alleviate the circular debt that has afflicted the whole energy chain.
The cities of Islamabad (Iesco), Gujranwala (Gepco), and Faisalabad (Fesco) all have their own electricity distribution companies.
He then remarked, “We have to move on to privatization,” and that the government was “seriously considering” an initial public offering (IPO) for the aforementioned three businesses.
Where losses are minimal and bill payments are reliably collected, these three electricity distributors stand out as the most effective.
Numerous attempts at privatizing the power distribution corporations by past governments had failed.
The partnership between Fesco and the Pakistani business magnate Mian Mansha never came to fruition.
The investors were not interested in taking part in the agreement because of the electricity sector’s severe problems, especially the circular debt.
The International Monetary Fund and other international funders had urged Pakistan to privatize its power grid.
Even before they left office, the previous government had drawn up plans to divide the power distribution firm.
The interim federal administration is now mulling potentially transferring power distribution firms to the states. However, as the temporary arrangement announced to form special courts through revisions in power theft control legislation, this is just the same old wine in a new bottle.
All these schemes had been mapped out by past governments, but they never got off the ground.
