Tuesday , November 24 2020
Breaking News
Home / Op-Ed / Features & Analyses / Power sector woes
Power sector woes

Power sector woes

The shortage of electricity and circular debt are two chronic issues the nation is facing for the last many years. Electricity is the basic requirement for economic development but the official hierarchy is showing bleak performance both at management as well as operational levels. At the management level, the officials have failed to come up with a workable solution to meet the growing demand of electricity and on the operation level, mismanagement, red tape and line losses are multiplying the economic woes of this country. The issue of circular debt is haunting this nation every now and then – the causes are apparent but the solutions are unperceived. The circular debt is the cash shortfall which the Central Power Purchase Agency cannot pay to power supply companies. The shortfall is the difference between the actual cost of electricity and the revenues realized by the power distribution companies from electricity customers. This shortfall in revenue cascades through entire supply chain of the electricity involving from electricity generators and fuel suppliers to refiners and producers. According to some experts, circular debt is a big threat to the economy while the others believe it is just jugglery of figures.

The fact remains that the government will have to ensure uninterrupted electricity supply to industrial consumers at affordable prices if it is serious in boosting the country’s economy. The present leadership of the country had promised to resolve the issue of electricity shortage, but the issue is still lingering on and it has failed to bridge the gap between demand and supply. The power shortage is slowing down the economic growth. The Ministry of Water and Power has now asked the federal and the provincial governments to pay a certain amount for achieving sustainability in power sector. Without finding a practical solution to the problem of electricity shortage and the circular debt, the government finds it easy to transfer the burden on the consumers. Though the government intends to supply uninterrupted electricity to the industrial areas, but problem is that some industrial units also operate in the residential areas making the situation worse for the department concerned to cope with the problem.

As a matter of fact, the government needs to introduce basic changes in the method of governance. Gone are the days when the government was responsible for the provision of utility services. Now the corporate sector is there to help the government by investing in the utility services. The government should work as facilitator and not as a business concern. The short term as well as the long term solution lies in the private investment.