Punjab Power Company Recovers Rs93m, Warns of Circular Debt Risk

The Lahore Electric Supply Company (Lesco) has made a significant recovery of over Rs93 million from defaulters within a 24-hour period. This development comes amidst a warning by the power division to provincial governments to settle their electricity bills amounting to Rs 150 billion to prevent power cuts and mitigate financial losses to the national economy.

Lesco's recovery drive, conducted across various circles, has shown promising results, with substantial amounts collected from each region. The company has also introduced an open court system to address consumer complaints, resolving 1,006 out of 1,014 grievances on the spot. However, the bulk of the outstanding debt remains unpaid, with major defaulters including Punjab government departments, provincial agencies, and district administrations. The collective debt of Rs 18.419 billion owed to Lesco by these entities poses a significant challenge for the distribution companies, which are already struggling with limited resources to maintain an uninterrupted supply. The circular debt has become a major concern for the national economy.

Lesco's efforts to curb power pilferage have also been stepped up, with the detection of 493 electricity pilferage connections in five districts. Consequently, 159 FIRs have been registered against the accused, with 25 individuals being arrested. The Punjab Power Department's warning to provincial governments to settle their outstanding electricity dues takes on added significance in this context, as the distribution companies are struggling to maintain grid stability and owe a collective Rs 350 billion to the power generation companies.

The situation is further complicated by the circular debt, which is fueled by the accumulated unpaid bills of provincial governments and other major defaulters. If left unchecked, it can cause significant power cuts, exacerbating economic activity and social discontent. Addressing the root cause of the problem necessitates transparent financial management, equitable distribution of resources, and strict enforcement of tariff discipline to prevent cases of power pilferage leading to higher tariffs for genuine consumers.