Poor performance

AT a meeting held recently in the Ministry of Water and Power to assess the performance of power distribution companies, it was found that despite repeated efforts, there has been no improvement in their working. Worse still, even the efficient ones have started going down because of unchecked electricity theft. Previous records show that the performance of distribution companies in Sindh, Balochistan and Khyber-Pakhtunkhwa have been poor since long, but now those in Punjab are also not doing well.

During the meeting, it was noted that the collection of consumer bills by Lesco was very poor and losses are far higher than the set target. Generally, no FIR is lodged against the power thieves, indicating lack of interest on the part of management to reduce transmission and distribution losses. Evaluating the performance of Lesco, the meeting noted that no analysis was carried out about the top 10 current and previous defaulters or adjustment made. A hefty amount was outstanding under the head of ' running' and ' deferred' defaulters and for its recovery the company was directed to launch a special campaign. The same state of affairs was found to prevail in the case of Mepco and Fesco. In the course of discussions it also came up that there were some feeders where losses were more than 20%. All companies were also asked to cut transmission and distribution losses in line with the target given by the National Electric Power Regulatory Authority. Show-cause notices were also issued to five distribution companies for their inability to control electricity theft and improve collection of consumer bills.

There are many complex factors involved in the poor performance of the power sector. According to experts, a key reason is the appointment of heads of power distribution companies on political considerations, ignoring the considerations of merit and expertise. Corruption and inefficiency are rampant from top to bottom of which the biggest example is the failure to check theft and bring down line losses which are among the highest in the world. It was disclosed in a report some time back that though funds have been available for power companies to improve their performance, the ministries dealing with energy issues fared poorly and utilised the money at a significantly slow pace. This has stood in the way of executing vital power projects designed to increase power generation to curb outages. Other major problems identified in the meeting related to late approval of project plans, delay in the completion of bidding process, award of contract, issuance of letters of credit and opening of bank accounts by project authorities. All this has burdened the national exchequer with millions of rupees in the form of commitment charges on loans.

At a recent presentation on foreign assistance for the power sector, it was disclosed that the available development assistance portfolio totalled $27.86 billion for 185 projects as of May 31, 2015. Of this, only $9.143 billion (32.78%) was utilised whereas $18.722 billion (67.2%) remained undisbursed. Foreign financing for the power sector stood at $15.157 billion, of which only $3.591 billion (23%) was utilised. Needless to say, the responsibility for delay in the utilisation of funds lies squarely on the ministries and executing agencies concerned which should be called to account. Since the slow spending of foreign funds results from poor planning of project activities, it is important that project management units should be made fully functioning by the time loans are provided. The bidding process should be completed within the stipulated time so that the scheduled start of work is not disturbed. An effective response to the problem will be to set up a special monitoring cell to report any delay in disbursement and utilization of funds directly to the Prime Minister.