As Pakistan has said goodbye to the International Monetary Fund after receiving over $100 million of the last tranche and does not want another loan programme, the IMF has endorsed the government efforts to improve electricity supply in the country. Though the endorsement is regarded as a positive development, it also indicates that the fund still has leverage on the ‘internal businesses’ of the country. The government is making concerted efforts to improve energy supply, minimize line losses and affectively tackle the circular debt. The power sector is facing myriads of unexplained troubles which have not only marred its efficiency, but also utility. Electricity is the basic component for the growth of industry, but corruption, political interference and mismanagement has severely affected the working of the department as the vital organ of the government. Every project meant to generate electricity has been politicized and delays and political expediencies have left the people with persistent load shedding and darkness. Sindh is facing severe electricity shortage and the situation in other parts of the country is not different. People have been fed on promises for the last three years.
According to the fund, the power distribution companies have improved collections and reduced line enabling the government to achieve the quarterly performance targets until the end of June 2016. The achievement blocked the accumulation of new arrears in the fourth quarter of 2016-17 whereas the stock of the outstanding arrears has also lowered. According to the Ministry of Water and Power, the circular debt has been managed which was increasing to Rs16 billion per month and Rs200 billion per year, creating a nightmare for the department. The circular debt recorded an increase of Rs8 billion in 2016 as compared to Rs200 billion in the preceding years. The federal budget was not made to pay power losses during the previous two financial years whereas Rs342 billion were paid in 2012-13 and Rs 138 billion in 2013-14 from the budgetary allocations. This is made possible by improving the recoveries and lowering the technical and distribution losses. The government benefitted Rs 60 billion cash at the end.
Whenever the higher revenue collection is achieved, a chest-thumping euphoria engulfs the government circles without realizing the losses on the other side of the fence. Unfortunately an electricity bill, domestic or industrial, reveals startling fact that the consumers are made to pay twice the money of the electricity they consume. The consumers are made to pay taxes and additional taxes, surcharges and additional surcharges and the list goes on. The government will have to take immediate steps to upgrade the existing power distribution system to contain line losses and improve supply. The power generation projects held in limbo need to be revived to stimulate the sagging economy.
