Govt proposes incentives to curb electricity theft, recover arrears

ISLAMABAD: The government is set to introduce a unique financial incentive package for civil administration, police, and Law Enforcement Agencies (LEAs) to combat electricity theft and ensure recoveries from defaulters of power distribution companies (DISCOs).

According to sources, an attractive incentive package has been meticulously crafted for district administration, police, and LEAs to bolster efforts against electricity theft and ensure recovery from defaulters. Notably, officers and staff of DISCOs who demonstrate exceptional performance in these areas will also be rewarded with substantial financial incentives. 

The upcoming meeting of the Cabinet Committee on Energy (CCoE) is expected to approve this proposal, said sources.

As per sources, the incentive package, as detailed in the available documents, proposes a multi-tiered reward system. 

For recoveries from private defaulters with outstanding dues for two to three years, a 5% reward is proposed. This reward increases to 7% for recoveries from private defaulters with arrears exceeding three years. 

Similarly, recoveries from private disconnected defaulters will yield a 5% reward for arrears spanning two to three years and a 7% reward for those exceeding three years. 

Additionally, up to a 10% reward will be offered for ongoing theft detection efforts, benefiting whistleblowers and police/LEAs who contribute to these recoveries.

A significant meeting of the CCoE, chaired by Prime Minister Shehbaz Sharif, was initially scheduled for May 16, 2024, to discuss three key agenda items. These included the Circular Debt Report for February 2024, the proposed incentive mechanism for electricity arrears recovery and theft prevention, and the extension of the deadline for the Pakistan Oil Refining Policy’s upgradation agreements. However, this meeting was postponed for unknown reasons, and the CCoE will address these issues in its next meeting.

It is also learnt from sources that the summary prepared by the power division, titled “Illegal Spectrum of Goods and Services: Incentive Mechanism for Recovery of Electricity Arrears above Two Years and from Theft of Electricity from Private Consumers,” outlines the detailed framework of the proposed incentives. The disbursement of rewards will be managed through cheques issued by the Deputy Commissioner of the respective DISCOs, ensuring a transparent and accountable process.

It is pertinent to mention that the financial incentive package is seen as a critical step in addressing the pervasive issue of electricity theft and the massive backlog of unpaid bills. By engaging multiple layers of the civil and law enforcement infrastructure, the government aims to create a robust system of accountability and motivation. This initiative is expected to significantly enhance the efficiency of DISCOs in recovering dues and curbing illegal electricity consumption.