ISLAMABAD: Pakistan’s federal cabinet has rejected a Power Division plan to significantly reduce the Rs 589 billion loss estimated to be incurred by the distribution companies (Discos) in the current fiscal year 2024, by blocking the passports and CNICs and preventing defaulters from travelling abroad.
According to local media the plan was discussed during a cabinet meeting held in the first week of January. According to a senior official of the ministry, the cabinet deemed these measures as distractions from genuine, sustainable solutions.
The Power Division was also instructed to develop a comprehensive plan with clear timelines and an exit strategy from the economic challenges faced by Discos. Pakistan’s Prime Minister Anwar-ul-Haq Kakar voiced dissatisfaction with the poor performance of Discos and instructed the Power Division to present a thorough plan with defined targets, responsibilities, and timelines. Following the unbundling of WAPDA, the power distribution business was delegated to 10 companies (excluding Karachi, served by a private entity).
Appointing suitable CEOs for these distribution companies had consistently posed a challenge for the government. The circular debt had surged to Rs 2.75 trillion as of mid-November 2023, with distribution companies’ receivables reaching Rs 1.786 trillion, rendering the sector unsustainable.
