Power sector receivables soar to Rs 590 billion


January 04, 2015 – Mushtaq Ghumman – BR Report –

Power sector receivables have touched about Rs 590 billion due to extremely poor performance of the top brass of Water and Power Ministry and Distribution Companies (Discos). The Ministry of Water and Power is run by two ministers (federal minister and minister of state) and a host of officials from Pakistan Administrative Service (PAS) – former District Management Group (DMG) – whereas Discos are headed by officers who are on ”look after” charge or contract.

Prime Minister Nawaz Sharif is holding regular meetings of the Cabinet Committee on Energy (CCoE) to discuss numerous issues plaguing the sector including rising receivables however the recovery figure remains appallingly poor, said an official on condition of anonymity. Official documents available with Business Recorder reveal that receivables stood at Rs 587.578 billion as of November 30, 2014 (during first five months of current fiscal year), of which the key nonpayer is private sector after Sindh and AJK governments.

Finance Minister Ishaq Dar recently gave the task of collections from private sector defaulters to the National Accountability Bureau (NAB) because such attempts made through the Federal Investigation Agency (FIA) remained fruitless. Receivables stood at Rs 512.909 billion as on 30 June 2014 and are now hovering around Rs 590 billion which implies that Discos fail to collect Rs 78 billion from public and private sector consumers during five months.

The documents further disclose that power sector”s collections stood at Rs 435 billion during the first five months of the current fiscal year against the billing of Rs 509.7 billion, showing a significant gap between billing and collection. Private sector including industry owes Rs 402 billion during the first five months of current fiscal year and the payable amount stood at Rs 355.6 billion till June 30, 2014. This indicates that the unpaid amount rose by Rs 46.4 billion in just five months. Recovery against private sector stood at Rs 383 billion against the billing of 429.7 billion.

The federal government and its attached departments owed Rs 8.6 billion as on November 31, 2014, while the amount was Rs 6.098 billion till June 30, 2014. Receivables against the federal government departments was to the tune of Rs 1.116 billion; local bodies under federal government Rs 2.319 billion; autonomous bodies under federal government Rs 1.657 billion; Defence Rs 1.658 billion; and Water and Power Ministry Rs 1.850 billion.

Azad Jammu and Kashmir government”s payables have increased to Rs 45.703 billion as on November 30, 2014 from Rs 37.969 billion till June 30, 2014. Billing against AJ&K stood at Rs 9.314 billion during the first five months of the current fiscal year of which a payment of Rs 1.581 billion has been made to Islamabad Electric Supply Company so far. The AJK government has already refused to pay the current tariff notified by the federal government; it is insisting on a special tariff.

The amount of receivables against Sindh government reached Rs 65 billion as on November 30, 2014 against Rs 56.341 billion till June 30, 2014. Hyderabad Electric Supply Company (Hesco) and Sukkur Electric Power Company (Sepco) sent bills of Rs 12 billion during first five months, but the collection stood at Rs 3.26 billion. Both Hesco and Sepco are top loss-making companies. The government had directed the two companies to outsource collection to the private sector but this directive has not yet been implemented. Punjab government owed Rs 5 billion as on November 30, 2014 against Rs 2.906 billion till June 30, 2014. Discos sent bills of Rs 9.591 billion to different departments of the Punjab government of which collections stood at Rs 7.316 billion. KP owes Rs 20.925 billion and Balochistan Rs 7.630 billion. Receivables against Federally Administrated Tribal Areas (FATA) stood at Rs 40.828 billion. K-Electric owes about 32 billion. The government owes Rs 8.23 billion for agriculture tube wells in Balochistan of which the shares of federal and Balochistan governments were Rs 4 billion each.

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