Pakistan’s Power Sector is Reducing Efficiency of Businesses: Report


Pakistani businesses are suffering heavily from the existing framework of the power sector, according to the report: “State-Owned Electricity Distribution Companies — A 5-year Performance Review” published by Prime Institute.

As per the report, even surplus generation capacity is unable to end Pakistan’s loadshedding because of the state-owned distribution companies’ (DISCOs) inability to meet the regulatory targets for transmission and distribution loss. It also criticizes the authorities’ failure to implement regulations on-bill recovery, investment, and public safety.

The report mentions that the carelessness in the power sector resulted in the overall loss to the national exchequer that is recorded at Rs. 1.355 trillion. From the total losses, Rs. 647 billion was caused by the financial loss of the DISCOs and Rs. 708.4 billion was attributed to the subsidy paid out of the federal budget to DISCOs between 2016 and 2020.

One of the reasons for these unnecessary losses is reportedly the lack of investment by some DISCOs while others had invested more than the permitted limit. Another reason is the DISCOs ‘incompetence in fulfilling the regulatory targets.

Fines were imposed on these DISCOs, but many continue to breach the set regulations, and these inefficiencies have led to the government paying Rs. 708.4 billion to bail out different distribution companies.

The report also highlights that a total of 7.5 million applications have been filed for new connections over the past five years but 16 percent of them are yet to be approved.

Source: Pro Pakistani