Unfortunately, the Pakistan Power Sector is never away from the public eye– specifically, since the last two decades. Media, primarily, picked-up the then ongoing negotiations with the notorious IPPs in the early 2000s and then the continuing power crises pushed everything behind it. It has been so since 2007 barring a few years around 2016 and 2017, when the new power plants started pumping badly needed MWs in the system. From thence so onwards, affordability issues have taken over any possible availability constraints. At present, the back-breaking electricity tariffs (comprising of everything under the sun) are the bane. So much so, that we have presently seen extensive protestations in the Country that were even more in emotionalism than what was happening in 2009-2011 on account of debilitating power shortages.
Like always, both the people and the governments start quoting privatization as the solution. That KE’s earlier privatization has not netted anything for the poor customers nor for the GoP is off-course forgotten. Imagine the amount of subsidy which the GoP has to dole out to KE for maintaining a decent tariff for its customers, while its privatization had envisioned a paradigm change and even utopia for the helpless customers of Karachi.
For the nth time in our history, the tomes also agree to the solution but with a caveat that this time the privatization has to be taken up in the merit order of those companies – which are loss-making the most. And in a jiffy, the attention is diverted to the poor DISCOs servicing Northern Sindh, Baluchistan and the KPK (exclusive of TESCO which serves the erstwhile FATA). The most unfortunate part is that none of the tomes and their non-professional disciples in the related ministries have an inkling as to which of the DISCOs are the maximum loss-making ones and that the usual suspect DISCOs do not really qualify to be considered as such.
It is simply forgotten that the investments in the Power Sector during the last 35 years have been lopsided to say the least and that the consumer demography of the so-called loss-making DISCOs is also different from the Punjab-based DISCOs. Additionally, issues of lower per capita income and comparatively lower writ of the government too are evident in the jurisdictional areas of these poor DISCOs. In other words, it is understood that the loss being calculated and considered by the tomes seemingly is based on the so-called, but surely misleading percentage depictions, which show a better picture of the Punjab-based DISCOs. On the other hand, the right way is to quantify the losses on the actual number of electricity unit loss and the financial value of the same. Once this is done, it is quickly concluded that the candidates for treatment may not be these Discos – rather, the candidature for treatment swings in favour of Discos like LESCO and PESCO even in comparison to HESCO, SEPCO or QESCO. In fact, LESCO is the most loss-making Disco in the country – specially, when PESCO serves the whole of the KPK and that this province is marred by very serious terrorist and law and order situation. Similarly, is the situation of QESCO.
It also needs to be understood that much is wrong with the Disco data being issued for all concerned each month. As a first, we see that there is no metering in the erstwhile FATA areas (may be nothing else could be done) and the losses are being calculated on the basis of a notional loss of 25%. Similarly, the actual figure for QESCO is surely very high because the 28% calculated each month is sadly based on billing of the 32,000 tube-wells (tagged and the un-tagged ones) on the average basis. Any correction by metering the tube-wells or by simply taking them off from the loss data sheet would double the actual loss of QESCO. Not to be left at this, it is only now that we hear about over billing in a Company like LESCO – which if considered would simply change the dynamics and standing of Discos on the loss table.
Consequently, there is a need to develop the right formula for comparing the various Discos whereby the best candidate(s) for any treatment could be selected. Experts agree that any comparison based on percentage is simply wavered and thus cannot be the true depiction of the loss or profit of a particular Disco. Consequently, the right way is to consider not just the losses or the bills collection percentage separately, but to consider the AT&C losses (Aggregate Technical & Commercial Losses) and that too in monetary terms — without recognising percentage as something of consequence. Additionally, it is important to add-on the losses in financial terms relating to transformer damage and the interruptions for a particular financial year — inclusive of momentary tripping, short & long breakdowns and also planned & unplanned shutdowns that are necessitated to be availed. Thereafter, a cocktail of all of these imperatives will have to be listed and then placed for comparison. Such a comparison matrix has been prepared and is listed as below. Low and behold, it is seen that the poor DISCOs or the usual suspects go down the ladder and cannot be considered as real loss-making in comparison to Discos, which till now have been eulogized as the efficient ones.
Once the above exercise is got done and then validated, a new list of Discos to be urgently privatized or doled-out for management concessions etc. would appear on the radar.
Impact of Losses/Ranking of DISCOs
DISCOs Increase in Impact of AT&C Losses Impact of Interruption Impact of Total Loss Overall Impact
Receivables Excess Loss FY 2022-23 Break Downs Equipment Loss/ of DISCO
LESCO 45,185 21,943 67,128 4,725 1,611 73,464 16%
GEPCO 6,840 (1,596) 5,244 612 1,475 7,331 2%
FESCO 19,891 (2,430) 17,461 1,690 4,812 23,963 5%
IESCO (19,186) 292 (18,894) 10,004 1,650 (7,240) -2%
MEPCO 19,971 8,774 28,744 2,920 8,966 40,630 9%
HESCO 30,936 14,033 44,969 3,956 7,491 56,416 12%
SEPCO 23,449 20,689 44,138 1,460 – 45,598 10%
QESCO* 75,638 23,356 98,993 485 1,224 100,702 21%
PESCO** 25,889 74,851 100,739 13,046 611 114,396 24%
TESCO 7,177 99 7,276 6,080 1,322 14,678 3%
TOTAL 235,790 160,011 395,798 44,978 29162 469,938 100%
* The data does not depict the true picture as tube-wells billing is suspect being bloated to great extent.
** Relates to the whole province marred with a serious law & order situation etc.
Not just this, but the new listing would also inform the inspectors of their actual duties and that the requirements need to be simply changed. It will also be found-out that earlier-on it had been a wild goose chase, while the actual culprits have never been pinpointed.
The above exercise has necessarily to be taken-up at the earliest by the Power Division and the Finance Ministry for sharing with the Privatisation Commission, so that the actual losses could be stemmed at the earliest. Once the required management concessions have been awarded and implemented, the decision makers would be able to firm-up the required policy whereby other Discos, but in the real order of loss precedence, could be taken-up for any process in earnest. The above exercise would also assist both the regulator Nepra and the governing Power Division to properly manage the Sector without the present hesitation and a focus on the wrong culprits. It, however, does not mean that the smaller of the DISCOs have to be let loose. These too, have to be treated appropriately; however, while considering and proposing solutions for the specific threats being faced there, which incidentally, is not common to the Punjab DISCOs. The afore-stated way of treating the various DISCOs is the only solution to the present debilitating issues and which can reap a bonanza s for the country.Engr Tahir Basharat Cheema, "Loss-making Discos — Who tops the chart?," Business recorder. 2023-11-08.
Keywords: Social sciences , Power sector , Power crises , Power plants , Electricity tariffs , Sindh , Baluchistan , DISCOS , KPK , HESCO , SEPCO , QESCO , LESCO