PESCO Liabilities Spike to Rs. 620 Billion

The National Assembly Standing Committee on Privatization, chaired by Farooq Sattar, convened today to discuss the privatization of power distribution companies (Discos), HESCO and PESCO, and the financial issues faced by Postal Life Insurance. HESCO officials briefed the committee, stating their average demand is 968 megawatts. Farooq Sattar questioned the load shedding hours to provide the media with accurate information. HESCO officials clarified that industrial zones are entirely load-shedding-free, and they have recently declared three general feeders as load-shedding-free. They explained that load shedding schedules are determined by the federal government and some HESCO areas experience up to ten hours of load shedding. Regarding electricity theft, committee member Saba Sadiq inquired about measures taken. Farooq Sattar commented that while load shedding, recoveries, and losses are managed globally, “nothing is managed in our Discos.” HESCO officials are committed to declaring more feeders with lower theft rates as load shedding-free by July, acknowledging that load shedding is difficult for both the public and their staff, who have to repeatedly switch controls. The CEO of PESCO informed the committee that PESCO’s financial losses in the last fiscal year amounted to Rs. 143 billion. He projected a reduction of Rs. 20 billion in losses for the current fiscal year. The company’s total losses stand at 35 percent, and its overall liabilities are Rs. 620 billion. PESCO expects a loss of Rs. 62 billion in the current fiscal year. Committee members expressed extreme frustration, with one suggesting, “It’s better to close down such a company.” Zulfiqar Ali, another member, asserted that “Awais Leghari cannot solve PESCO’s problems; only a field marshal can fix PESCO.” He also claimed that PESCO had filed several FIRs against him. Farooq Sattar noted that not answering a respected member’s phone calls and filing FIRs constituted a privilege issue. The PESCO CEO, however, responded that he remains in contact with the esteemed member. The committee also discussed the Postal Life Insurance Company Limited (PLICL) and its Rs. 48 billion budget. PLICL officials stated that they previously had 270,000 active customers, but due to a financial crisis, only 90,000 active customers remain. Committee member Noman Islam Sheikh questioned why the company was established in the first place. PLICL officials explained it was formed to meet FATF requirements. They stated that they had requested Rs. 6 billion immediately to clear the backlog of payments. Saba Sadiq remarked that “this money belonged to the people, which the Ministry of Finance sat on.” Ministry of Finance officials stated they had promised Rs. 48 billion as per SECP directives. They added that the responsibility to verify claims lay with the Ministry of Communications, and they had previously cleared Rs. 8 billion in claims. PLICL officials countered that verifying claims was their company’s responsibility. Committee member Sehar Kamran emphasized that “this is public money and should be paid to those it belongs to.” She also asked what fault lay with those who haven’t received their money. Ministry of Finance officials clarified that the Ministry of Communications is the custodian ministry for PLICL. Khawaja Shiraz, a committee member, accused the Ministry of Finance of failing to fulfill its responsibility, stating, “Many people died struggling to get their money back.” He called it an injustice that the money of poor people is not being returned. Saba Sadiq proposed forming a subcommittee on the matter. Farooq Sattar suggested summoning the Secretary Finance to the committee first. He stressed that “this money is a trust of the public and is due.” Sattar added, “These are public funds, and we are not doing justice to the people.” Ministry of Finance officials stated that PLICL currently has Rs. 1 billion, and they would allocate Rs. 3 billion for PLICL in the next fiscal year’s budget. Committee members found this unacceptable, suggesting that the Secretary Finance be called to the next meeting. Farooq Sattar asserted there should be no problem in releasing Rs. 6 billion, and the committee directed that Rs. 6 billion be disbursed to PLICL by September. Sattar concluded, “If we destroy this institution, what will we sell? This is against policy.”