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Power rates can be cut right now

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A few days ago, it was Prime Minister Nawaz Sharif who said that the rates of electricity would be brought down after three years. A day later it was President Mamnoon Hussein\'s turn to repeat the same claim. Now everyone in PML-N government will be ready to sing the same theme song.

All these claims are made to justify the raise in electricity tariff and give hope to the masses that better days are ahead..
The fact, however, is that a massive cut, almost fifty percent, in the current electricity rate per unit is possible in a month without negative impact on the nation\'s revenues:

There are about four hundred and fifty billion rupees the defaulters, including government departments, owe the electricity companies. This is equal to the amount of the annual subsidy that the government paid to the people on electricity bills. If the government squeezes the payment from the defaulters; the subsidy amount will be paid. Nothing but vested interests and irresponsible attitude of the government is responsible for non-payment of this amount. Twenty-five percent of the electricity generated and supplied is stolen not just by the poor but also by the very rich. If the pilferage of electricity is stopped, it will mean the power companies\' revenue will go up by twenty-five percent per unit and that will also mean a twenty-five percent cut in per unit rate of electricity. Here again vested interest is hindering the way.

There are some power generating units which are using thirty to forty percent more gas or furnace oil to generate electricity per unit than ordinary plants. There is no incentive for the owners to reduce this wastage because it is the government which pays their oil and gas bills. Make the owners pay for the wastage of fuel and they will immediately improve their machinery and produce as much electricity per unit on as much gas and oil as per international standards. Because not all power is produced by these fuel wasting plants and the share of these plants is said to be about twenty percent, if these plants are fixed, it will reduce the over all production cost of electricity in the country by at least ten percent and that will be a ten percent cut in electricity rate per unit for the consumer. However, if these power plants are not repaired or their old machinery not replaced, they will be wasting coal as they are wasting gas and furnace oil now.

While it is true that shifting oil and gas run power generating plants to coal will reduce the price per unit; it, however, is not possible in the current conditions as our rupee is falling steeply in value and it is quite possible that after three and a half years when most of our units are run by coal, the price of imported coal, because of fall in rupee, may offset the low production cost of coal generated electricity.

Already, the rupee has fallen about ten percent against the dollar in three months and it is feared that before this year ends, a dollar maybe worth one hundred and twenty rupees. There seems no effort by the government to arrest this fall of and it is quite possible that in three years the value of rupee may have been reduced by half. It would mean buying coal at double the price of imported coal. Plus there will be a general inflation.

Coming back to the reduction in the cost of production of electricity and ultimately cut in its per unit price to the end consumer, the fact is that the government owned electricity generating plants and the electricity distribution companies are not just overstaffed but that they liberally give overtime to its employees. There is a need for staff performance audit of all these power generating units and power distribution companies to heftily cut the number of their workers and as such reduce the cost of production and supply of electricity, which ultimately the consumer has to pay.

Then there are the staff members of the purchase departments of all these electricity units and supply companies which are ready to squander public money for personal gains. The situation needs to be corrected on this front too.

Let us not forget the old and faulty high voltage lines; if these are repaired, at least four percent of line losses can be avoided. Most of the above steps suggested for substantively reducing electricity rates are of administrative nature and wouldn\'t need to spend money and would have taken a few months to take. It boggles the mind that the government which should have taken all these steps and already steeply cut electricity rates is giving us the good news that the electricity rates will be reduced in three years time.

The government should mend its ways and stop listening to vested interests and instead of giving false hopes; it should work on actually and immediately reducing the price of electricity.

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