Well informed sources told Business Recorder that the flow of power sector arrears was Rs 186 billion in 2012-13 which declined to Rs 122 billion in 2013-14, Rs 118 billion in 2014-15 and Rs 8 billion in 2015-16.
Secretary Ministry of Water and Power, Younus Dagha made a presentation to the ECC on "performance of the power sector for 2014-16". He informed the meeting that power sector had shown marked improvement in its performance in the past two years.
The recoveries which remained in the range of 88-89 per cent crossed 93 per cent in 2015 and 2016, the highest in the history of the sector. Similarly, the Transmission and Distribution (T&D) losses which were around 19 per cent in 2014 came down to 17.8 per cent in December, 2016.
These two accounts by themselves have provided a positive cash flow to the power sector totalling Rs 116 billion in the past two years. Gencos were making a cumulative loss of Rs 7.785 billion in 2012-13, Rs 7.345 billion in 2013-14 and not only overcame their losses but reported a profit of Rs 5.772 billion in 2015-16. However, no details of this "miracle" are available. Insiders claim that this was done by minimum utilisation of Gencos expensive plants.
Secretary Water and Power further revealed that all achievements as well as historic drop in oil prices helped to keep the power sector's circular debt within the range of Rs 320-330 billion from December 2014 till June 2016. These two years (2014-15 and 2015-16) were the only fiscal years in more than a decade, when no losses of the power sector were paid out of the federal budget which previously on average was around Rs 200 billion annually. This brought down power sector's burden on the national budget from ( Rs 676 billion ) 2.4 per cent of GDP in 2012-13, Rs 430 billion or 1.7 per cent in 2013-14 to around 0.76 per cent of GDP in 2014-15, (only subsidy allocations). These improvements were recognised by multi-lateral partners and IMF as well.
Ministry of Water and Power, in its presentation did not mention how much difference was recorded in demand and supply in 2013 but just informed the committee that load shedding was 12 and 15 hours in urban and rural areas respectively in 2013. The industry was also facing eight hour load shedding. The overall improvement in performance has resulted in reduction of load shedding to zero for industrial sectors and 3-4 hours for other sectors.
The Ministry has also claimed that 3 hour load shedding will be implemented in urban and 4 hours in rural areas in June 2017 but the country would be load shedding free in January 2018.
According to the presentation, generation and demand deficit was 5521 MW in July 2016, which would be reduced to 3027 MW by July 2017 whereas the country would be surplus by 2029 MW in November 2017, 3196 MW in March 2018 and 5480 MW in November 2018.
The committee was also informed that out of total power generation of 19917 MW in 2016, 30 per cent power generation was furnace oil, 36 per cent hydel, 20 per cent local gas, 8 per cent LNG, 3 per cent renewable energy and 3 per cent nuclear.
In 2018, the share of furnace oil-fired generation will reduce to 19 per cent from 30 per cent in 2016 whereas the share of LNG fired generation will increase to 17 per cent from 8 per cent in 2016. Hydel will remain at 31 per cent, local gas 13 per cent, local coal 1 per cent, imported coal 8 per cent, renewable energy 7 per cent and 4 per cent nuclear.
According to Pepco, country's power sector receivables have soared to Rs 726.19 billion as of December 2016 as compared to Rs 684.06 billion on June 30, 2016, showing an increase of 6 per cent in just six months.
Energy sector analysts argue that of Rs 726 billion, Rs 300-530 billion does not exist as Discos piled this amount through over billing and other tactics, adding that Discos profits will further slash when these fake receivables are shown on the books.
"Receivables are increasing 10-12 per cent per annum, which shows that half of the increased receivables are from over billing and are meant to show less line losses," said one of the power sector experts.
He further stated that power sector's loans have reached at Rs 370 billion in addition to Rs 370 billion circular debt which implies the power sector circular debt has again touched alarming level of Rs 740 billion.
Copyright Business Recorder, 2017