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Government decides to amend power theft law

Imran Khan’s government has decided to penalize the consumers for theft of electricity in a recent amendment proposed by the Power Division. The law will allow police to be arrest criminals if a DISCO or a grade 17 officer of the Government provides information by writing.

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National media has reported that the government has decided to amend Pakistan Penal Code (PPC) 1860 to enforce prosecuting consumers allegedly involved in electricity theft.

The arrest would be made following the order of the court on the application of an officer of grade 17 or above.

However, Business Recorder said that the amendment of the bill is being opposed by the parliamentarians who think that this amendment is being pushed by the government because it wants to hide its bad track record and protect vested interests.

It must be mentioned that during the recent fiscal year 2020-21, Distribution companies (DISCOs) have increased in their inefficiencies by 28 percent to reach Rs54 billion compared to Rs42 billion in the preceding financial year.

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The new amendment                                      

Power Division, in its arguments in favor of the amendment in the Pakistan Penal Code Act XLV of 1860, states that the power sector has been facing a situation whereby recoveries affected by the Distribution Companies from consumers are insufficient and inadequate to meet the cost of generated electricity.

As a result, the government has to provide subsidies, especially to those DISCOs where leakage, pilferage, and theft are rampant. Primarily, this phenomenon emanates from a fragile legal and enforcement structure. Resultantly, the conviction rate of such offenses is very low, the Business recorder reported.

 

According to recent research, among the five DISCOS in Punjab, the greatest losses have been reported in Lahore Electric Supply Company (LESCO). Data available to Business Recorder showed that the LESCO has registered a distribution loss of 2161 million units against 756 million units by GEPCO, 1004 million units by FESCO, 645 million units by IESCO, and 2154 million units by MEPCO.

Even compared to the distribution companies around the countries, the LESCO remained at the top position in terms of its contribution to loss in terms of revenue so far. The company suffered a loss of Rs43, 263 million against Rs13,396 million by GEPCO, Rs17,901 million by FESCO, Rs13,016 million by IESCO, and Rs34,270 million by MEPCO, the Business recorder reported.

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World Bank report

In its recent report, the Inter-governmental organization World Bank has observed a liability on Pakistan’s economy for a long time, contributing hugely to sector deficits and creating inefficiency in the sector.

The reason for this has been poor planning, implementation bottlenecks, and limited access to financing, due to which long periods of load-shedding have been created. Financial deficits with power sector State-Owned Enterprises (SOEs) have been building up as successive governments have not passed on the full cost of power to consumers.

Inadequate choice of power generation technology and inefficiencies in distribution have resulted in high costs of electricity damaging Pakistan’s competitiveness, business recorder reported.

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Recent corruption revealed

In a recent report, the World Bank Group (WBG) Integrity Vice Presidency (INT) has unearthed a “racket” of 23 Pakistani companies regarding a “cartel” operating in the electricity sector in Pakistan. The report stated that at least 23 companies had organized themselves into “cartels”.

According to the World Bank, “evidence” indicates that for years, the publicly procured market in Pakistan for certain electricity transmission equipment was controlled by a group of companies; specifically, “evidence” indicates that Group members arranged in advance which companies would win contracts, including World Bank-financed contracts, and collaborated on bid prices.

Considering the inefficiencies and corruption in the sector, the government’s recent step is a positive one for strict regulation of the sector and making it efficient.

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