Saturday, August 2, 2014

Pakistan's Load Shedding: Losing power

Despite a year of talk, the facts remain the same. Losses in the power sector are at the same level they were last year when the government made what it called a one-time retirement of the circular debt.
That extraordinary measure was taken to create some breathing room in which to implement the necessary reforms and bring down the losses, a goal that has evaded the government so far.
The latest round of figures compiled by the power bureaucracy in its monthly report of operational data show that the gap between the amount of electricity provided to the distribution companies and the amount of units billed is just under 19pc in the fiscal year ended June 2014, the same level they were at last year.
And this figure tells only half the story. In financial terms this means that electricity worth Rs211bn was lost in the last fiscal year. When recovery losses — the gap between the units billed and the amount of money actually recovered against those bills — are added to this tally the figure doubles, bringing us close to the approximate total of Rs550bn of the circular debt.
A closer look at the data compiled by the power bureaucracy shows that all distribution companies of the country are contributing their fair share to these overall losses.
For a while, the minister of state for water and power tried to peddle the story that the chief reason for the circular debt was that Punjab pays its bills but that Sindh and Khyber Pakhtunkhwa do not.
The data provided by the power bureaucracy belies this claim; it shows that more than half the losses occurred in distribution companies in Punjab with the remaining half shared by those from Sindh, KP and Balochistan.
It seems that inefficiency and incompetence do not have an ethnicity, and all apparent attempts to paint one province as superior in the matter of billing recoveries or distributional efficiency are without foundation.
Why is this data not made public? The power bureaucracy is required to produce monthly reports of its operational data which includes details of all the electricity generated and provided to all the distribution companies in the country.
The result is a report with 150 or so pages of detailed data on where the electricity is coming from and where it is going. There is no reason to keep this information out of the public domain, and the water and power secretary should seriously consider making the document available online, along with all back issues.
In addition, financial data should be similarly gathered and disseminated, including cash flow statements, so that claims about operational efficiencies can be verified.
There should be accountability of the power bureaucracy, and allowing some daylight into the dark corners where discretionary decision-making power lurks is the best way to ensure this.

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