Pakistan mulling army crackdown against electricity theft, line losses in distribution companies — official

Pakistani technicians work at a power grid station in Faisalabad on on November 16, 2016. (AFP/File)
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Updated 30 November 2023
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Pakistan mulling army crackdown against electricity theft, line losses in distribution companies — official

  • Power secretary says plan to bring in army will begin with Hyderabad Electric Supply Company as a pilot project
  • Energy Minister Mohammad Ali had said in September a crackdown would start to stop power theft of $1.92 billion

ISLAMABAD: The government has “carved out a plan” to involve the army in a crackdown against electricity theft and line losses of state-run power distribution companies, the federal secretary of the power division said in an interview to a top Pakistani newspaper published on Thursday. 

The South Asian nation’s power sector has been plagued by high rates of power theft and distribution losses, resulting in accumulating debts across the production chain — a concern also raised by the International Monetary Fund (IMF) during recent bailout talks.

There are ten distribution companies in Pakistan, which are locally called DISCOs. The high performing ones, with high recovery of bills, are based in the major eastern urban centers of Gujranwala and Faislabad, as well as in the capital, Islamabad, but other state-run companies make massive losses because of low recovery rates due to theft and line losses. 

The caretaker energy minister Mohammad Ali had said in September a crackdown would start to stop power theft of 589 billion rupees ($1.92 billion).

“We have carved out a plan which is yet to be approved by higher authorities. However, the top functionaries of Power Division have made up their minds to start implementing the plan from HESCO (Hyderabad Electric Supply Company) as a pilot project,” Secretary of the Power division Rasheed Langrial told The News, one of Pakistan’s top English newspapers, referring to plans for the army to supervise a crackdown against electricity theft and distribution losses. 

“This will help identify unscrupulous elements within the DISCO and people hand in glove with theft of electricity and causing billions of rupee losses to national exchequer.”

The army has not yet commented on Langrial’s remarks but the news comes after a crackdown on dollar hoarding and smuggling that has led to a continuing appreciation of Pakistan’s national currency and which currency dealers have widely credited the country’s all-powerful army of spearheading. Tens of millions of dollars have poured back into Pakistan’s interbank and open markets since raids on black market operators began on Sept. 6.

While there have been other attempts to curb the black market when the rupee has been under stress, the latest push came after licensed dealers requested army chief General Asim Munir to take action, rather than leave it solely to the civilian caretaker government that was put in place in August to run Pakistan till elections, currently expected to be held early next year. Munir had reportedly promised dealers “transparency in dollar exchange and interbank rates.”

According to the data for the financial year 2020-21 quoted in The News, the recovery of electricity bills in HESCO was at 73.7 percent, Sukkur Electric Supply Company 64.6 percent, Quetta Electric Supply Company at 34.66 percent and Tribal Electric Supply Company at 25.29 percent.

Pakistan’s resolve to undertake power sector reforms was crucial to reaching a staff level agreement unlocking a $3 billion standby arrangement from the IMF earlier this year.

The power sector has been specifically mentioned by the IMF, which called for a “timely” rebasing of tariffs to ensure that costs are recovered. This means hiking prices for consumers despite already record high inflation.


Pakistan’s finance minister says new IMF loan agreement targeted for early July

Updated 7 sec ago
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Pakistan’s finance minister says new IMF loan agreement targeted for early July

  • The quantum and duration of new loan is still not clear, though the government wants at least a three-year program
  • Muhammad Aurangzeb says the modalities of the new loan will be thrashed out with an IMF delegation next month

ISLAMABAD: Pakistan’s finance minister Muhammad Aurangzeb said on Tuesday the country planned to discuss the contours of a new loan program with an International Monetary Fund (IMF) delegation next month while hoping to reach a staff-level agreement with the global lender by early July.

Pakistan secured a $3 billion IMF bailout last year to avert a sovereign default and hopes to receive the final tranche later this month. However, the government wants a fresh IMF loan since the country continues to face tough economic challenges and plans to implement structural reforms.

“We are still hoping that we can get into a staff-level agreement by the time June is done or early July so that we can move on,” the finance minister said while addressing a news conference.

He informed he had had good discussions with IMF and World Bank officials during the spring meetings held by both international lending organizations in Washington.

Aurangzeb maintained it was not right to say that the IMF was imposing strict conditions on Pakistan since the country needed to carry out reforms on its own to strengthen its economy.

“This is Pakistan’s program which is helped, supported, assisted by the fund,” he said. “This is how we have to see it since this is the way ownership will come.”

He said the quantum and duration of the new IMF program was yet not clear, though the government wanted to secure at least a three-year loan package.

Both sides have said they were already in discussions for the new loan.

A formal request, however, will be made once the current facility expires, with the IMF board likely to meet late this month to approve the second and last tranche of the current support scheme.

The economy is expected to grow by 2.6 percent in the fiscal year 2024, the finance minister said, adding that the inflation was projected at 24 percent, down from 29.2 percent in fiscal 2023.

It touched a record high of 38 percent last May.

Aurangzeb said structural reforms would include increasing the government’s tax revenue-to-GDP ratio to 13 percent to 14 percent in the next two or three years from the current level of around 9 percent, reducing losses of state-owned enterprises through their privatization, and better management of the debt-laden energy sector.

With input from Reuters


Pakistan refiners warn $6 bln upgrades at risk due to fuel price deregulation plan

Updated 23 April 2024
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Pakistan refiners warn $6 bln upgrades at risk due to fuel price deregulation plan

  • Regulatory authority proposes oil marketers, refineries be allowed to set prices instead of government 
  • Refiners demand they be consulted before the implementation of “irrational recommendations”

KARACHI: Pakistan’s plans to deregulate fuel prices could lead refiners to halt planned upgrades worth up to $6 billion and force some refineries to close, some of the country’s top refiners said in a letter to the country’s oil regulator.

Looking to drive down prices for consumers, the South Asian nation’s Oil & Gas Regulatory Authority (OGRA) has proposed that oil marketers and refineries be allowed to set fuel prices, instead of the government setting prices.

As part of the change, OGRA proposed scrapping or reviewing a rule that requires fuel buyers to purchase supply from local refineries, another issue the refiners said could result in “disastrous consequences.”

The refiners — state-run Pakistan Refinery and private domestic refiners Pak Arab Refinery, Attock Refinery, Cinergyco, and National Refinery — said they were already struggling to operate near full capacity and asked that they be consulted before the implementation of “irrational recommendations.”

“The refining sector requires OGRA support through pragmatic and supportive measures, rather than suggesting ways that if implemented would result in their permanent closure,” the refiners told OGRA on Monday in a letter, which was reviewed by Reuters.

The deregulation was aimed at boosting competition and protecting the public interest, OGRA told Reuters in a statement on Tuesday, but did not respond to specific questions on the letter from the refiners. However, it said in an April 17 presentation reviewed by Reuters the potential impact of deregulation on refinery upgrades had to be assessed carefully, calling it a challenge.

“The refineries upgradation will bring in investment of $5 — 6 billion and not only result in cleaner environment friendly fuels but also result in savings of precious foreign exchange of the country,” the refiners wrote in the letter to OGRA.


Pakistan hopes to get new IMF loan by early July, says finance minister

Updated 23 April 2024
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Pakistan hopes to get new IMF loan by early July, says finance minister

  • Pakistan’s current $3 billion financial arrangement with IMF expires in late April
  • Islamabad is seeking “bigger,” long-term loan to ensure macroeconomic stability

Pakistan is hoping to reach a staff-level agreement with the International Monetary Fund by June or early July, its finance minister said on Tuesday.

The country’s current $3 billion arrangement with the fund runs out in late-April, which it secured last summer to avert a sovereign default.

Islamabad is seeking a long-term bigger loan to help bring permanence to macroeconomic stability as well as an umbrella under which the country can execute structural reforms.

“We are still hoping that we get a staff-level agreement by June or early July,” Finance Minister Muhammad Aurangzeb told a conference in Islamabad.

He returned from Washington last week after leading a team to attend the IMF and World Bank’s spring meetings. “We had very good discussions in Washington,” he said.

He said he did not know at this stage the volume and tenure of the longer program.


Pakistan ‘rarely’ punished officials for rights abuses in 2023— State Department report

Updated 23 April 2024
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Pakistan ‘rarely’ punished officials for rights abuses in 2023— State Department report

  • US State Department releases annual “Country Reports on Human Rights Practices” for the year 2023
  • Report says Pakistan witnessed extrajudicial killings, torture and restrictions on media freedoms last year

ISLAMABAD: Pakistan’s government “rarely” took steps to identify and punish officials who may have been involved in rights abuses in 2023, a report released by the US State Department said on Tuesday, pointing out incidents of extrajudicial killings, torture, enforced disappearances, violence against journalists and restrictions on media freedom had taken place in the country last year. 

US Department of State released its annual “Country Reports on Human Rights Practices” to highlight rights issues in several countries, including Pakistan. In the report, Washington identified that Pakistan last year witnessed arbitrary killings, extrajudicial killings, enforced disappearance, torture and “cases of cruel, inhuman, or degrading treatment or punishment by the government or its agents.”

“The government rarely took credible steps to identify and punish officials who may have committed human rights abuses,” the report said. 

Cases of “enforced disappearances” of citizens have long plagued Pakistan, where militants have waged a war against the state for decades. Families say people picked up by security forces often disappear for years, and are sometimes found dead, with no official explanation. Pakistani security agencies deny involvement in such disappearances.

The report also pointed out that last year Pakistan had seen incidents of restrictions on freedom of expression and media freedom, violence against journalists, unjustified arrests, disappearances of journalists, censorship and criminal defamation laws. 

Pakistan’s recent actions to restrict Internet and mobile services throughout the country, especially on days when elections are held, have invited criticism from rights organizations and Washington. The interior ministry last week confirmed it had banned social media platform X in February to protect national security, maintain public order, and preserve the country’s “integrity.”

The State Department report further pointed out that rights issues in Pakistan during 2023 included extensive gender-based violence, including domestic or intimate partner violence, sexual violence, early, child and forced marriages. It said Pakistan had also reported incidents of female genital mutilation and crimes involving violence or threats of violence targeting members of religious, racial and ethnic minorities. 

The report added that violence, abuse and social and religious intolerance by militant organizations and other non-state actors, both local and foreign, contributed to a culture of lawlessness in the country. 

“Terrorist and cross-border militant attacks against civilians, soldiers, and police caused hundreds of casualties,” the report noted, crediting Pakistan’s military, police and other law enforcement agencies for carrying out “significant campaigns” against militants last year. 

The South Asian country has seen an uptick in violence, mainly suicide attacks, since November 2022 when a fragile truce between militants and the state broke down. Pakistan has since then carried out military operations against the Pakistani Taliban or the Tehreek-e-Taliban Pakistan (TTP) and a Baloch separatist militant organization, the Balochistan Liberation Army (BLA) in the country’s two western provinces that border Afghanistan.


Iranian president in Lahore on second day of official visit to Pakistan

Updated 23 April 2024
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Iranian president in Lahore on second day of official visit to Pakistan

  • On Monday, Islamabad and Tehran signed eight accords including on trade, technology, health, culture, information 
  • Interior ministers of Pakistan and Iran agree on joint action plan to deal with terrorism, smuggling, drug trafficking 

ISLAMABAD: Iranian President Ebrahim Raisi arrived in Lahore on Tuesday on the second day of a three-day visit to Pakistan where he will meet top government officials and business leaders before traveling to the country’s commercial hub, Karachi. 

Raisi arrived in Islamabad on Monday on a three-day visit as the two Muslim neighbors seek to mend ties after unprecedented tit-for-tat military strikes earlier this year. The Iranian official’s visit is the first by any head of state to Pakistan after the South Asian nation’s February general elections and the formation of a new government headed by Prime Minister Shehbaz Sharif. The visit also comes as tensions are high in the Middle East after Iran launched airstrikes on Israel a week ago and Israel retaliated with its own attack on Friday.

“Iranian President Syed Ibrahim Raisi has reached Lahore,” state television PTV reported, where he was received by Punjab Chief Minister Maryam Nawaz. 

The Iranian president began his Lahore trip by visiting the mausoleum of Allama Muhammad Iqbal, Pakistan’s national poet, whose literary works in the Persian language have garnered him wide recognition in Iran.

After meetings in Lahore, Raisi will travel to Karachi, where he will hold meetings with the provincial leadership and be awarded an honorary doctorate by the University of Karachi, state-run Radio Pakistan reported. 

Commuters ride past a welcoming billboard displaying an image of the Iranian president Ebrahim Raisi along a street in Karachi on April 22, 2024. (AFP)

On Monday, Raisi held delegation-level meetings in the Pakistani capital as well as one-on-one discussions with the prime minister, president, army chief, chairman senate and speaker national assembly. 

He also witnessed the signing of eight MoUs and agreements covering different fields including trade, science technology, agriculture, health, culture, and judicial matters. These include an MoU on the establishment of the Rimdan-Gabd Joint Free/Special Zone; on cooperation between the Ministry of Cooperative Labour and Social Welfare of Iran and the Ministry of Overseas Pakistani and Human Resources Development of Pakistan; on judicial assistance and legal cooperation at the ministry levels; on cooperation for animal hygiene and health; on mutual recognition in the field of quarantine and phytosanitary; and on the promotion of culture and films.

“The economic and trade volume between Iran and Pakistan is not acceptable at all and we have decided at the first step to increase the trade volume between our two countries to $10 billion,” Raisi said at a joint press conference with Sharif. 

The interior ministers of Pakistan and Iran also met on Monday and discussed border management to prevent smuggling and drugs trafficking, and “decided in principle to ban terrorist organizations in their respective countries,” state news wire APP said.

“The two sides agreed on a joint plan of action to deal with the menace of terrorism being a common problem, with further improving mutual support and exchange of intelligence information.”

A security agreement regarding this decision would be signed “at the earliest,” APP added. 

Pakistan and Iran have had a history of rocky relations despite a number of commercial pacts, with Islamabad being historically closer to Saudi Arabia and the United States.

Their highest profile agreement is a stalled gas supply deal signed in 2010 to build a pipeline from Iran’s South Fars gas field to Pakistan’s southern provinces of Balochistan and Sindh.

Pakistan and Iran are also often at odds over instability on their shared porous border, with both countries routinely trading blame for not rooting out militancy.

Tensions surged in January when Pakistan and Iran exchanged airstrikes, both claiming to target alleged militant hideouts in each other’s countries. Both sides have since then undertaken peace overtures and restored bilateral ties.