Circular Debt



  • Pakistan Power sector is currently unable to deliver power supply to the population at full capacity and is undergoing serious stress due to:

    1. WAPDA mismanagement

    2. poor revenue collection ability of the DISCOs.

    3. High fuel costs

    4. Mismatched Power Tariffs

    What is the solution?

    (See http://herald.dawn.com/2011/10/20/the-vicious-circle.html for a good overview of the problem)



  • A very good thread to start;

    One of the problems with WAPDA, as with all monopolies, is that they end up become bloated, lazy and uncompetitive. If you want to keep WAPDA by all means keep it, but do not exclude the private sector from competing and supplying power. Let WAPDA face proper market forces and we will see that it is possible to provide more than enough energy to all of Pakistan and even export some.

    You need to de-politicise WAPDA completely and put in place a highly independent but business savvy group of people as the Governing Board.

    Lastly, you have got to stop power theft even if it means pulling peoples tooth out (I don't mean literally). Only a depoliticised WAPDA can do that. Honest people cannot be expected to subsidise the theft of power by others.



  • @sting

    Thanks

    your first point makes sense but power theft appears to be insurmountable - even for the recently privatised KESC?



  • very nice thread . There are few things which we need to consider.

    a) Line Losses--- These are mainly of two types. First theft and second poor/overloaded distribution system. Due to inability of public sector to make required investment , our distribution system has become obselete and a major cause of line losses.

    b) I totally agree that public sector natural in-efficiency has coupled with monoply , resulting in huge losses.

    c) The subsidy govt is providing to keep prices and govt's inability to pay in time for the subsidies has resulted in circular debt. The only solution to this is to eliminagte the subsidy which would result in price hike but thats inevitable.



  • gv

    "your first point makes sense but power theft appears to be insurmountable - even for the recently privatised KESC?"

    Yes, theft are insurmountable and hence there is a dire need for taking politics out of the business of power.

    You owe it , you pay it, must be the policy in relation to all private or business customers.

    When people think stealing is haram but stealing electricity is different, then it needs to be told about the stark similarity between the two. I understand, poor people who are desperate to run their fans in summer but still you have got to pay for what you consume. Very interestingly an incredible amount of theft happens at the houses of the rich and the super rich who run 10 or 20 airconditioning units, here lies the greatest rub.

    If you are going to stop the poor from stealing, then you have got to stop the rich from doing the same.

    You have got to sack anyone working for WAPDA who colludes with the theft of power. You will be left with perhaps one tenth of the work force.

    I say make WAPDA compete and then let it swim or sink on its own strength.

    There is no other option; with the right will, power theft can be reduced to negligible levels. With the advance in technology; it is not very hard to see which sections of the grid has got 'ghost' users.



  • stingingnettle

    "

    here is no other option; with the right will, power theft can be reduced to negligible levels. With the advance in technology; it is not very hard to see which sections of the grid has got 'ghost' users.

    "

    who will invest in to technology ? Our whole distribuiton system is overloaded and needs overhauling and we don't have money to invest into that.



  • Sharif Aadmi

    I am not talking about overhauling the grid which obviously is a hugely expensive affair, I am talking about the technology that can be deployed to figure out where there is an unexplained bleed of power. Once you plug the leaks, money will start coming in fast. You don't even need technology to catch out power thieves, you can do it with properly trained manpower. The problem is to find the will and the muscle to do so.

    May be we are not institutionally corrupt, we are nationally corrupt. That is a dark thought.



  • stingingnettle

    There is one aspect which probably u r ignoring is that even apart from theft , we have huge line losses which r due to overloaded/overaged grids.



  • Sharif Aadmi;

    Yes, you are right there are huge line losses we must worry about too.

    In a perfect world, we tackle both, but if we had to choose on to start with, perhaps theft might be a good starting point.

    I take your point, the issue is quite complex almost daunting but something has got to be done. Stolen power is paid for by all those who pay their bills; it is not the WAPDA or any other power company that absorbs the losses.

    Another way to look at it, stealing power is akin to someone picking your pocket.