Circular Debt in Pakistan

11/07/20  ISLAMABAD. : The Senate Standing Committee on Cabinet Secretariat was informed that the circular debt, power theft and non-recovery of the power distribution companies are the main causes of power crises in the country. Briefing to the Committee, National Electric Power Regulatory Authority (NEPRA) Chairman Khalid Saeed portrayed a gloomy picture of prevailed power situation of the country. 

The committee meeting was chaired by Senator Shahid Hassan Bugti; meanwhile Senator Safdar Ali Abbasi, Senator Fauzia Fakhar-uz-Zaman, Senator Saeeda Iqbal, Senator Shirala Malick, Senator Kalsoom Perveen, Senator Najma Hameed and Senator Adbul Ghaffar Qureshi attended the meeting. The Chairman NEPRA said that the country is suffering from non-recovery of electricity bills from consumers and line losses of the power distribution companies, adding that non-recovery of electricity bills is a reflection of the inefficiency of the distribution companies as the recovery ratio is average between 90 to 98 percent. 

Regarding the line losses of electricity, he informed that technical line losses are unavoidable for the companies likewise the rest of the world, but the country is facing also administrative line losses which are called power theft. He said that the power theft ratio is very high of some distribution companies. Giving break up of the line losses of the power distribution companies, he told the committee that the line losses of the Peshawar Electricity Supply Company’ (PESCO) are 35 percent, Hyderabad Electric Supply Company (HESCO) 36 percent, Multan Electric Supply Company (MEPCO) 17 percent, Gujranwala Electric Supply Company’s (GESCO) 13 percent, Lahore Electric Supply Company’ (LESCO) 13 percent and Islamabad Electric Supply Company’ (IESCO) witnessing 10 percent line losses. 

The Chairman NEPRA told that government is unable to pay power subsidy on time due to financial crunch that’s why the power sector is facing circular debt which is the main...