Power sector recovery losses go up by 11pc

ISLAMABAD: Despite the substantial improvement in electricity supply side, the power sector is still not sustainable as the recovery losses have inflated by 11 percent to 92.8 percent in December 2017 from 89 percent in June 2017 showing the mammoth damage of Rs132 billion to power sector, reveals the official document.

“The total annual turnover of the power sector hovers in the range of Rs1.2 trillion to Rs1.5trillion and if kept in view the said turnover in mind, one percent loss amounts to Rs12 billion and the damage in recovery loss has inflated to 11 percent meaning by that power sector is sustaining the loss of Rs132 billion just because of failure in obtaining the 100 percent recovery.”

According to the senior officials of Power Division, the electric power distribution companies (Discos) after recovery of billed amount of electricity first spend the amount on their expenses then they pay the remaining amount to CPPA (Central Power Purchase Agency).

Almost all the Discos pay Rs2.5 billion to CPPA every day, but one day in December 2017, they had paid just Rs112 million owing to which the government had to arrange the loan to run the power sector the next day. The official said that the circular debt is still at Rs530 billion out of which power sector alone needs to pay Rs280 billion to IPPs (Independent Power Plants).

However, the current payments to IPPs is amounted to Rs48-49 billion.

Minister for Power Sardar Awais Laghari in his recent statement already acknowledged the bitter fact that the country would have to bear huge power sector loss of Rs360 billion this year mainly because of insignificant reduction in system losses from 19 percent in 2013 to 17.8 percent in 2018.

Though the Nepra has increased the permissible losses in tariff up to 16.2 percent meaning by that the end consumers annually pay Rs194.4 billion in the head of system losses and theft even then the power sector is sustaining the loss of Rs360 billion showing that power sector is still in the hands of inefficient people.

Nepra official said that addition of power generation is good, but not enough to end the loadshedding as it is the 100 percent recovery of the generation cost of electricity which will make the sector sustainable.

Under the existing scenario, the more the government generates the electricity, the more circular debt appears.