Addressing power sector circular debt in Pakistan requires a multi-pronged approach: (Points # 3 & 15 are a must read)

1. Energy Efficiency: Invest in modernizing power generation, transmission, and distribution systems to reduce losses and inefficiencies.
2. Tariff Rationalization: Implement transparent and consistent electricity tariffs that reflect the true cost of production and discourage overconsumption.
3. Reducing Theft: Strengthen enforcement against power theft through better monitoring, stricter penalties, and community engagement. The government should enact a law to use military for catching theft in industry, business (large and small) and agriculture sector and trial and punishment of such theft cases in the military courts.
4. Distribution Company Reforms: Restructure and privatize distribution companies to improve management, reduce losses, and encourage private sector investment.
5. Renewable Energy Expansion: Increase the share of renewable energy sources, like solar and wind, to reduce reliance on expensive fossil fuels and diversify the energy mix.
6. Metering Upgrades: Deploy smart meters to accurately measure consumption, detect tampering, and enable demand-side management.
7. Subsidy Targeting: Direct subsidies to vulnerable populations instead of across-the-board subsidies, ensuring those who truly need assistance receive it.
8. Debt Resolution Mechanism: Establish a transparent mechanism to gradually settle outstanding debts between power producers, distributors, and government entities.
9. Payment Discipline: Improve payment collection mechanisms and ensure timely payments from government entities and consumers.
10. Consumer Awareness: Launch campaigns to educate consumers about energy conservation and the impact of power theft on circular debt.
11. Capacity Building: Train and empower regulatory bodies to effectively oversee and regulate the power sector.
12. Cross-Border Trade: Explore opportunities for cross-border energy trade to enhance revenue generation and reduce reliance on domestic resources.
13. Technology Adoption: Embrace digital solutions and advanced technologies to streamline operations, reduce losses, and improve overall efficiency.
14. Government Subsidy Reduction: Gradually reduce government subsidies while protecting vulnerable populations through targeted social safety net programs.
15. Transparent Auditing: Conduct regular and independent audits of power sector finances to identify and rectify inefficiencies and financial mismanagement. Here again the government should enact a law for forensic audit of IPP’s (under military supervision) and if found irregularities which has caused and still causing financial losses to the public exchequer then the owners as per the newly enacted law must be tried under military courts and if found guilty the culprits be sentenced to minimum life imprisonment plus 100 lashes with confiscation of entire properties in Pakistan and abroad and maximum penalty of death sentence.

Implementing these measures requires strong political will, effective governance, and sustained collaboration between the government, private sector, and civil society. It’s a complex challenge, but these steps can contribute to minimizing power sector circular debt in Pakistan.

Syed Nayyar Uddin Ahmad

03219402157
Lahore.