Power Division seeks Rs161bn from provinces

The Power Division has asked the Ministry of Finance to recover around Rs161 billion in unpaid electricity bills from provincial governments, according to Power Minister Sardar Awais Leghari. 

As per reports, while speaking during a Senate Standing Committee on Power meeting, Awais Leghari outlined how the Council of Common Interests (CII) had already approved a mechanism. Under this mechanism, the federal government can deduct 25 percent of the outstanding dues directly from the provinces’ shares, while the rest would be recovered once bills are reconciled.

Reports indicate that the committee, chaired by Senator Mohsin Aziz, was briefed regarding these unpaid bills that had piled up over the last three years mainly due to the provinces’ unwillingness to cooperate in reconciling the figures. Data from reports suggests that Sindh owes a staggering Rs67 billion followed by Punjab and Balochistan at Rs42 billion each.

Khyber Pakhtunkhwa owes Rs10 billion as well. The panel showed strong dissatisfaction with the delays and demanded urgent action to recover the dues.

Back in February 2014, the CII had already settled the framework for how such payments would be handled, including the principle of deducting dues directly from the provinces’ federal transfers. This was followed by a detailed meeting in August 2014 with all stakeholders in the Ministry of Finance, where SOPs were finalized. Since then, the federal government has been deducting 25% of pending power sector payments at source using a uniform process.

Reports reveal that in addition to recoveries, the committee also turned its attention to ongoing efforts to privatise several power sector entities. Leghari confirmed that three distribution companies, namely Iesco, Fesco, and Gepco, are up for privatization in the first phase. 

Lesco, Mepco, and Hesco will follow in the next phase, along with the Guddu and Nandipur power plants. Investor outreach, restructuring efforts, and promotional roadshows are currently in progress, with the entire process expected to wrap up by January 2026.

According to reports, the committee voiced concern over what this shift means for employees of these companies. It urged the ministry to come up with fair and worker-friendly policies, including options for voluntary early retirement, to protect workers' rights during the transition.

Another key issue raised was the high cost of electricity during peak nighttime hours. Reports reveal that Leghari has attributed  this spike results from reliance on expensive Residual Fuel Oil (RFO)- based generation to meet demand. The committee was unimpressed and pushed for a shift toward more efficient and affordable power plants to ease the burden on consumers.

Meanwhile, the installation of 800,000 Advanced Metering Infrastructure (AMI) meters across Islamabad, Rawalpindi, and Taxila has already been completed. This move has helped reduce line losses by 2%, offering a glimpse into how technology can play a role in addressing some of the power sector’s chronic inefficiencies.