Circular Debt Increases by Rs. 600 Billion Annually Due to Discos’ Mismanagement and Losses

Islamabad:Electricity distribution companies (Discos) are contributing to the rise of circular debt by an alarming Rs. 50 billion monthly and Rs. 600 billion annually, mainly due to non-recovery from defaulters, electricity theft, and other inefficiencies.

Recent data regarding the performance of these distribution companies reveals that due to incompetence, Discos have added more than Rs. 600 billion to the circular debt annually, bringing the total amount to a staggering Rs. 2.467 trillion. This indicates a severe failure by government officials to curb electricity theft and improve recovery from consumers, despite claims of a recovery rate of over 92.44%.

An official overseeing Discos’ operations revealed that, to show an improvement in overall recovery, companies engage in over-billing consumers by 10-15% each year.

It is noteworthy that Discos have failed to recover dues from both private and public sector consumers. When compared to the Rs. 1.189 trillion collected in 2021, the dues have surged by 69.64%, reaching Rs. 2.017 trillion. Additionally, when comparing with the Rs. 1.727 trillion collected in 2023, the total dues have increased by 16.79%, contributing only an additional Rs. 467 billion to the circular debt.

According to reports, ongoing defaulters, including major political and industrial figures, owe Rs. 1.094 trillion to Discos, and the amount owed by defaulting consumers has increased by Rs. 194 billion in the 2023-24 period.