Former Managing Director (MD) Pakistan Electric Power Company (Pepco) Tahir Basharat Cheema, in a TV talk show stated that failure to adopt a holistic approach to effectively deal with the power crisis by focusing only on generation while ignoring the sector’s financial stability or improving the transmission and distribution system is the major reason behind the continuing crisis in the sector.
Cheema added that the PML-N administration’s entire focus was on generation and little if anything was done to improve the transmission and distribution network or to make the sector financially sustainable.
He clarified that the sustainability of the power sector continues to be at risk and this is revealed by the fact that power sector receivables have increased from Rs 423 billon in 2013 to Rs 870 billion at present despite increase in average tariff from Rs 7.50 per unit to Rs 14 per unit. Unfortunately the government is passing on sector losses as well as debt servicing cost to consumers.
Cheema pointed out that the main reason for a decline in power sector sustainability was the PML-N government’s flawed decision to support costlier power generation during the past five years. Addition of expensive electricity of 10,000 MW in the system led to increase in basket price by Rs 3 per unit: if the basket price was Rs 6 per unit previously the addition of 10,000 MW has increased the basket price to Rs 9 per unit, he contended. LNG, he added, costs Rs 9.50 per unit and as result the price of electricity has gone out of the reach of the common man.
Cheema noted nonprofessionals were looking after the power sector instead of sector experts or technical people. He said that civil servants sitting in the Power Division were assigned the job of running the power houses as well as to keep the public happy.
Cheema referred to revenue based load shedding as a “horrendous tool” that created issues of national cohesion in the aftermath of relatively higher load shedding in three provinces as opposed to Punjab.
Former MD Pepco stated that in Khyber Pakhtunkhwa, Sindh and Balochistan technical losses were higher due to huge swathe of areas without electricity, long spread electricity lines and weak system and consequently they suffered more under revenue based policy. Load shedding was minimal in areas where losses were 10 percent and higher in areas above 10 percent and the draw back was that even compliant consumers in higher loss areas faced load shedding. This revenue based load shedding was initiated by K-electric, which is a private entity.