Fulfilling another demand of the International Monetary Fund, the ministry of water and power has directed four power distribution companies (DISCOs) to outsource their bill collection to the private sector while other entities have also been instructed to implement a revenue protection programme, an official source said on Tuesday.
Pakistan had earlier committed that the outsouring bill collection would be implemented from November 1, 2015, but the sources said that the scheme might get delayed for a few weeks but it would be implemented at all level before the year end.
To increase bill collection, Pakistan had earlier made a commitment with the IMF to outsource bill recoveries in the law and order affected and theft-prone areas. The DISCOs having low collections include HESCO, SEPCO, QESCO and PESCO.
The outsourcing of bill collection has worked wonders for the K-Electric. “If it can succeed in Karachi, it will also succeed in other areas. It will usher in an era of bill payment culture in the once no-go areas,” the sources said.
The outsourcing of bill collection is likely to be based upon revenue sharing formula with the tough guy, the bill collector, getting a hefty bonus on the recoveries. The other outsourcing method could be upfront payment that will allow more dividend for the bill collector, the source said, adding both methods were being practiced in Karachi.
The International Financial Institutions (IFIs) are the main donors for the power sector reforms programme. The slow pace of reforms have forced the donors to set quarterly targets for the revenue and power sector reforms to maintain $6.6 billion IMF programme.
The source said a long-term least-cost generation and transmission expansion plan was also under preparation which was expected to significantly enhance cost-efficient generation and distribution of electricity which in turn was expected to enhance liquidity in the power sector while allaying debt.
Overall losses in at the last 12-months declined from 19.0 to 18.21 percent. Collections in the same period improved from 88.6 to 90.7 percent, primarily due to improved monitoring of DISCOs financials and better load management across consumers in rural and urban areas, and industries.
The source said after eliminating the power subsidy for most consumer categories, with the exception of low-income consumers, the ministry of water and power was now reviewing the existing consumer categories to ensure that the subsidies which were being given by the federal government were actually passed on to deserving consumers.
