Power minister says govt to announce electricity theft control act as power theft losses swell to Rs589b n Info minister Solangi says caretaker govt won't introduce any law beyond its mandate.
ISLAMABAD - The caretaker government Wednesday announced massive crackdown to stop on electricity theft and against the low recoveries with an aim to improve energy sector and address the grievance of the affected consumers across the country.
In a bid to control the electricity theft in power sector that leads to accumulating circular debt and inflated tariffs, the interim government has announced to introducing a new electricity theft control act, aiming to establish enforcement infrastructure across the country and create special courts for handling complaints and penalties. The draft ordinance is expected to be finalised in the next two to three weeks.
The announcement was made by the caretaker Minister for Energy Muhammad Ali, in a press conference, along with Minister for Information and Broadcasting, Murtaza Solangi and Secretary Power Division Rashid Mahmood Langrial.
The energy minister said that this crackdown is part of a comprehensive effort to address mounting technical and commercial losses experienced by the power distribution companies nationwide and its strategy to combat widespread power theft and the substantial non-recoveries in the power sector.
Muhammad Ali said that special courts would be set up to deal with the cases of electricity theft through ordinance. The minister also announced to set up a task force to overcome power theft. He said that that electricity theft is a major problem in Pakistan, that incurs losses of approximately Rs589 billion per annum.
Which simply means, that consumers who pay their bills are effectively subsidizing those who steal electricity, Mohammad Ali said. “The background is that in our country, some domestic consumers steal electricity and others don’t pay bills,” the power minister said in today’s news conference as Solangi looked on. He explained that there are currently 10 distribution companies (Discos) in Pakistan, with K-Electric serving Karachi through its independent distribution network. Ali disclosed that the annual loss due to electricity theft and unpaid bills amounts to Rs589 billion, resulting in higher bills for law-abiding citizens and accumulating circular debt.
Regarding reducing capacity payments, the government acknowledged that it would take time to achieve meaningful results. There are also considerations for the provincialization or privatization of Discos, with a decision expected to be made in collaboration with the cabinet. This would allow the government to focus on policy and regulation, while the private sector or provincial governments would be responsible for managing the DISCOs, Mohammad Ali maintained.
While sharing the data on losses of various discos, it was disclosed that some Discos, such as Lesco, Fesco, Gepco, Mepco, and Iesco, are facing relatively lower losses of 3 percent, while Pesco, Hesco, Sepco, Qesco and Lesco losses are up to 60 percent. The minister said that the government plans to take various measures to address the issue. In areas with lower theft rates (up to 30%), technological interventions will be implemented. For areas with losses ranging from 30 to 60 percent, the government is considering involving the private sector in management. In regions with losses exceeding 60 percent, enforcement measures will be initiated, he added.
Moreover, the government intends to improve the management of Discos by making changes to their boards of governors and management teams, the energy minister revealed. The government has garnered support from provincial chief secretaries and police chiefs for implementing the plan, and taskforces will be established at various administrative levels to curb electricity theft, he added. Similarly, he said that the government has also planned to reshuffle officers involved in electricity theft. A control room and dashboard have been established at the Power Planning and Monitoring Company (PPMC) to monitor Discos’ performance. He further said that a task force would be set up that would work with cooperation of the Secretary for Energy and Power Division, IGs, Commissioners, and Deputy Commissioners at the grassroots level to curb power theft. He also announced to introduce reforms in ten power distribution companies.
He added that five low performing distribution companies were facing losses of Rs 100 billion on account of low recoveries due to poor management. Mohammad Ali pointed out Discos in region of Peshawar, Hyderabad, Quetta, Sukkhar, Tribal Areas, are incurring losses of Rs 489 billion. Caretaker Minister for Information and Broadcasting Murtaza Solangi ruled out that any minister was receiving free electricity. Solangi also ruled out introducing any law beyond the constitutional mandate of the caretaker government. He said power theft was a key factor that was contributing to rise in electricity rates in Pakistan. Power Division Secretary Rasheed Langrial emphasized the government’s inclination toward privatization as the ultimate solution. He said that government was seriously considering for an initial public offering (IPO) for three companies.
Meanwhile, Caretaker Interior Minister Sarfraz Ahmed Bugti in a post on X (formerly Twitter), has said that a large-scale crackdown has been launched to tackle the back-breaking inflation to provide some relief to the masses. He said this operation has been initiated on the directives of Interim Prime Minister Anwaarul Haq Kakar. He explained that the smuggling and hoarding of US dollars and commodities would be detected besides cracking down on organized criminal cartels to curb such illegal activities.
He further said that FC Balochistan (North), a paramilitary force, had foiled a bid last night to smuggle sugar to Afghanistan. Official sources in the Ministry of Interior informed that the government in coordination with provincial authorities and intelligence agencies had identified some cartels involved in smuggling, their patrons and government officials facilitating such activities and action was being taken against them. They further said that some major policy reforms were being taken and the businesses of commodities and currency would be transformed. To implement the new measures effectively, the government will upgrade monitoring systems at land, sea and airports to curtail illegal movement of goods and currency. The move comes after sugar prices are rising at an alarming rate in the country despite excessive production of commodity last year and the interbank rate of dollar against Pakistani rupees has crossed the threshold of Rs 300 for the first time in the country’s history.