The Water and Power Development Authority has come down hard on the government for not being able to implement the crucial power sector reforms that are vital for overcoming the power shortfall of the country. As it is, the present government has faced a tough time, addressing the power crisis and adding to the bag of woes are the burgeoning circular debt liabilities that are crippling the power sector entities.
What stands out is the fact that despite the government taking steps to increase the power tariff by almost a 100 per cent, they have not been able to narrow the gap between the revenue and cost of PEPCO, which is not the only example of gross mismanagement. Other such DISCO’s have also severely underperformed, with HESCO, PESCO, QESCO, and MEPCO compositely losing a gargantuan amount of Rs90 billion per annum in the distribution system.
With the government bent upon borrowing from the SBP to fulfill its budgetary needs and the crowding out of the private sector, the inefficiency of these distribution companies is like the final nail in the coffin, one that could severely compromise the standing of the democratically elected powers that be, if it hasn’t already been compromised.
The inefficient utilisation of fuel worth Rs11 billion will inevitably add to the import bill and with the rupee steadily declining, this situation definitely does not bode well for the economic managers as it will further stress an already strained current account. While losses in government owned enterprises has now become a norm, there is an urgent need to address the crisis by installing competent people at the helm of these entities without which, all efforts at power sector reforms will inevitably fall short of addressing the real problem at hand.