Stopping Power Theft in Pakistan

[Riaz Haq]

"Do your fasting, pay zakat (charitable donations) and serve your parents, but do these things by the light of legal electricity." Peshawar Electric Supply Company (PESCO)

Peshawar's electric utility has published full page advertisements in major Peshawar newspapers to appeal to its customers' religiosity in the holy month of Ramadan to stop stealing electricity and pay their bills.

According to news reports, PESCO ads exhort the local power consumers to do the right thing by citing religious edicts as follows: "Clerics have ruled that doing good deeds by the light of stolen electricity is against sharia, so let us stop using stolen electricity and beautify our day of judgement."

A combination of deadbeats and power thieves brazenly flout the law by not paying for electricity they use. Many of them are often politically powerful or connected to political bosses who protect them from the law. Some even shamelessly assert their right to steal electricity and refuse to pay bills. The state-owned power companies' employees are often corrupt and complicit in perpetuating the problem which is hurting the entire country. As a result, Pakistan's power sector and its fuel supply chain have been crippled by years of underinvestment, leaving people to endure blackouts of up to 20 hours a day in scorching summer heat.

The problem is widespread. It may be bigger in Peshawar but it is certainly not limited to any one particular city or province. In Islamabad, the nation's capital, it's fairly common for people living in large luxury homes to bribe corrupt utility officials to cap their monthly bills to just Rs. 1000 ($10) regardless of how much electricity they consume.  It's a key reason for Pakistan's worsening energy crisis. By some estimates, more than 40% of the power generated in Pakistan is not paid for.

It can be argued that the power theft is just one manifestation of the fraying moral fiber that is responsible for much of what is wrong in a country where religious fervor has been on the rise particularly since 1980s. Pakistan has rapidly climbed Transparency International's corruption rankings with more and more Pakistanis wearing religion on their sleeves. Symbols of religiosity like beards and hijabs are far more common in Pakistan now than I ever saw when I was growing up in the country in 1960s and 1970s.  Violence against fellow Muslims has also grown along with increasing religiosity. Huqooq-ul-Ibad have been almost completely ignored as Huqooq-ul-Allah have dominated religious discourse in the country.

KESC (Karachi Electric Supply Corporation), Pakistan's largest city Karachi's privately held utility, has started to reward those who pay and punish those who don't. It's a collective reward and punishment scheme to deal with the problem in Karachi. Areas where there is 80% money recovery see almost zero load shedding, 70% get a couple of hours of power cuts and those with less than 50% endure very long hours of black-outs. This policy has helped KESC reduce power theft from about 40% a few years ago to about 28% now  It has also resulted in about 50% of Karachi being supplied uninterrupted power.

There are many steps the new government can take to reduce power theft and improve revenue collection in the power sector. Here are a few of them:

1. Lead by example. All government ministers, top officials and members of national and provincial legislatures should pay their bills.

2. Implement the KESC's Karachi policy in more cities and towns to show consumers the benefits of paying for electricity by rewarding those who pay and punishing those who don't.

3. Deploy technology such as remotely read automated smart meters (AMR) and pre-paid electric meters (remotely shut-off when accounts run dry) to track consumption accurately and control electricity flow.

4. Appeal to people's deep religiosity to fulfill their obligations of paying for what they use. Encourage mosque leaders such as imams and khatibs to reinforce the message through their daily and weekly sermons.

5. Enforce the law. Cut off power to the delinquent consumers. Use police and paramilitary forces to remove kundas, illegal hooks slung over power lines to steal electricity in broad day light.

There is little hope of fixing the worsening crisis without strong action to improve the finances of the power sector to attract more investment.

Related Links:

Haq's Musings

Blackouts and Bailouts in Energy Rich Pakistan

Remembering Huqooq-ul-Ibad in Ramadan

Culture of Corruption in Pakistan

Circular Debt and Load Shedding in Pakistan

Twin Shortages of Gas and Electricity

Corruption and Incompetence Hobble Pakistan Power Sector