According to the Asian Development Bank (ADB), up to 70 percent of Pakistan’s serviced population does not pay their electricity bills. This non-payment is attributed to both financial constraints and widespread inefficiencies and irregularities in billing and collection.
The Asian Development Bank’s report, “Pakistan National Urban Assessment,” highlights that Pakistan’s flawed tariff system harms the financial health of power distribution companies (Discos). In rural areas, 50% to 70% of people do not pay their electricity bills due to financial difficulties and inefficiencies in billing and collection.
The Bank criticized courts for exacerbating the issue by issuing stay orders that delay legal actions for a year and allowing offenders of meter tampering and similar violations to pay a fixed fine instead of facing stricter penalties.
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The Bank reported that only K-Electric, which became financially sustainable after privatization, effectively operates from its revenue. Despite challenges, it has successfully installed meters across its 6,500 km service area, reducing electricity theft and income losses.
K-Electric has controlled losses from illegal connections through load-shedding. Despite its success, political and union resistance has stalled the privatization of other Discos.
The government is exploring splitting utility operations and infrastructure, as well as potentially listing companies on the stock market while retaining majority control.
