Power games


The immense power over national economy that the power sector wields has been on display almost exclusively in poor performance. From generation to transmission and distribution to recovery of energy bills, stories of incompetence and poor planning abound. Nobody seems to have any idea about how to tackle the menace of the so-called circular debt, now a decade-old problem.
Last Monday, a parliamentary panel took up the issue. It heard that the circular debt had reached Rs 795 billion and could be brought down only if power distribution companies could plug their losses. The panel chaired by former federal minister Naveed Qamar was informed that among the distribution companies, the Peshawar Electricity Supply Company faced the most losses and the Sukkur Electric Power Company the least.
The PML-N government, the panel was told, had left behind a Rs 1 trillion circular debt. Circular debt became a household name during the Pakistan Peoples Party regime of 2008-2013, frequently making the headlines. From 2010 to 2013, the government let the issue drag on, defaulting on payments to key suppliers until it was time to hand over the reins. While the government would not go on record about the reason, sources close to it leaked information to the media that the government wanted a forensic audit ahead of payments to independent power producers, which the latter did not agree to.
Within months of taking over in 2013, the PML-N government retired the debt – Rs 450 billion – without the audit the previous government had wanted. Soon, the oil prices declined allowing the government to gradually withdraw subsidies on power bills and raise the power tariffs to rationalize accounts books. Several power projects were commissioned to increase generation. We are now told that the circular debts has been mounting for two years.
Like their predecessors, the PML-N government too dragged its feet on the payments until it was time for general elections. The new government inherited a large amount of circular debt. That is a bad sign. The government needs to investigate the debt pile up.
Several serious problems are causing the bleeding in the power sector. The panel also took up the issue of line losses that stand at Rs 200 billion a year. It is time to discuss the circular debt in the parliament, think tanks, research bodies and judicial and investigation commissions. One hears that some of the independent power producers wield influence in the power corridors and can bend the government policies.
The game has been going on for too long to be allowed to continue at the cost of the poor consumer. It is time those benefiting from the confusion were given the shock of their lives.