The government has announced its plans to crackdown on electricity theft; ministers believe this results in massive financial losses and higher bills for the general public.
Power Minister Muhammad Ali and Information Minister Murtaza Solangi shared these plans during a press conference held in Islamabad.
This move comes as part of a comprehensive effort to combat electricity theft across the country, aiming to address both technical and commercial losses faced by power distribution companies.
The interim government, responding to public discontent over inflated electricity bills in August, has been exploring ways to address the concerns of citizens who have been protesting nationwide.
During the press conference, the Power Minister highlighted that Pakistan currently has ten distribution companies (Discos); K-Electric serves Karachi through its separate distribution network. He explained that these Discos have varying levels of electricity theft and recovery rates.
The annual financial loss due to electricity theft and unpaid bills in Pakistan amounts to Rs589 billion. This affects the general population, as others are forced to pay higher bills due to these losses. The minister emphasized that reducing electricity theft and bill non-payment is crucial for lowering electricity prices.
Prime Minister has taken action against Electricity Theft
The Prime Minister has directed authorities to take action against electricity theft and ensure bill payments. In Discos where recovery is better, such as Lahore, Faisalabad, Gujranwala, Multan, and Islamabad, losses total Rs100 billion out of a billing amount of Rs3,044 billion, estimated at 3%.
In contrast, Discos in Peshawar, Hyderabad, Sukkur, Quetta, and Azad Jammu and Kashmir face losses as high as 60%. The government has access to data highlighting areas with more significant electricity theft; they plan to address this issue accordingly.
The government is adopting several measures to combat electricity theft. For areas with theft below 30%, they plan to use technological interventions. In areas with losses ranging from 30% to 60%, they are considering private sector involvement in management. For areas with losses exceeding 60%, strict enforcement measures will be implemented.
Additionally, the government intends to improve Disco management by making changes to their boards of governors and management teams.
The authorities have engaged with chief secretaries and police chiefs in provinces, who have expressed their support for this plan. They will also take action against officials who aid electricity theft.
Taskforces will be established at the provincial, divisional, district, and tehsil levels to oversee the operations to curb electricity theft. These taskforces will consist of government officials and police officers.
The operations will be monitored by the Ministry of Power from Islamabad, utilizing a control room and dashboard at the Power Planning and Monitoring Company (PPMC).
Ministry of Power created a new electricity theft control act
Furthermore, work is in progress to create a new electricity theft control act, which will establish enforcement infrastructure across the country and establish special courts to handle complaints and penalties. The draft of this ordinance is expected to be finalized and sent for approval in the next few weeks.
In addition to addressing electricity theft, the government is also working on reducing capacity payments and exploring the options of provincialization and privatization of Discos.
The Power Division Secretary, Rasheed Langrial, emphasized that privatization is the eventual goal, with serious consideration for an initial public offering (IPO) for three companies. Companies facing significant losses due to low recovery rates will need to prepare for privatization.