NEPRA report on power crisis

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At last feasible and workable suggestion are coming to partially address the power sector crisis, including the continuously bulging circular debt, which has reached to Rs.2 trillion despite frequent hiking of electricity tariff. National Electric Power Regulatory Authority has released its annual Industry Report, 2019, suggesting therein, among other measures of power sector short term reforms, retiring of inefficient state-run-power plants and privitisation of all distribution companies have been proposed. Fast swelling circular debt, higher transmission losses and inefficiency of power plants have largely contributed to the bad health of power sector in the financial year 2018-19, reveals NEPRA report. The report skips other big damaging factors that have also made power sector a ‘Titanic’, which has started sinking. Shady thermal power production and purchase agreements under the power policies of 1994 and 2013, massive electricity theft and default of electricity bills by influential political and business elite and billions of accumulated arrears against the federal and provincial government departments including the ones of PESCO against Azad Kashmir. NEPRA report has touched the tip of iceberg. Another noteworthy aspect of the report is that centralized governance model for power distribution companies has failed to bring any improvement over the past 15 years. It also contains a critique on the lopsided power policy of the last PML-N government, which exclusively focused on setting up coal based thermal power plants at exorbitant Capital Expenditure and allowing per unit tariff of US 8.5 cent against 4-5 cents for coal based electricity tariff in other countries of the world. On the contrary, upgradation and expansion of rag-tag transmission and distribution system was utterly ignored. Procedural requirements for the disbursement of $4.4 billion Asian Development Bank loan sanctioned for this purposes in 2016 were put on back burner, despite accruing of commitment charges of 0.5 percent. Hence, the transmission and distribution system is unable to pick the additional power generation of 12000 megawatt. Honest consumers are paying for the electricity, which is neither inducted in the system nor consumed by the consumers. The recipe of shifting the burden of idle capacity charges of IPPs, high coal power tariff and unutilized electricity was suggested to PML-N government economic wizard Ishaq Dar by former finance secretary Dr. Waqar Masood, who now writes didactic and pro-poor people columns in print media. It was he who strongly advocated to PTI government to avail front-loaded IMF loan programme, whereas a renowned economists like DR. Ashafaq Hassan Khan was openly arguing against it in his writings in print media and TV talk shows. Month-on-month increase in electricity tariff, fuel price adjustment and making Amendment in NEPRA Act are tough conditions that are included in IMF programme.