LAHORE: The Water and Power Ministry has warned Lahore Electric Supply Company (Lesco) Chief Executive Arshad Rafique that he should either “improve situation at the company, or the ministry will take direct action”.

Pointing out total collapse of governance – falling recoveries, increasing line losses, excessive and wrong billing – at Lesco, the ministry has issued second warning to the its CEO in the last three months.

“Remedial measures to correct the situation need to be taken at your personal level. It is most pertinent to say that any further silence on your part would be suicidal for power sector and against supreme national interest,” says the ministry letter.

“You are, therefore, directed to explain your position in fifteen days and also initiate action against delinquents. Failing which, the Ministry of Water and Power will take action directly if the situation is not improved,” the letter warns Mr Rafique.

According to the contents of the letter, bill recoveries fell to 81 per cent during this February, against 98 per cent during the corresponding month last year.

“It shows average recovery of your company has fallen by 17 per cent than the corresponding month and is much below 100 per cent recovery target. It also reflects your poor vigilance and lack of control over your subordinate officers.”

“The position of receivables is also not up to the mark as they have risen from Rs31.66 billion in June last year to an alarming figure of Rs38.89 billion by the end of February. Dues against even government departments have gone up from Rs2.9 billion in June last year to Rs4.7 billion this February. The unresolved issue of bill reconciliation, amounting to Rs343 million is a clear-cut indication of over billing to government connections.”

Analysis of units and amounts credited proves that “so-called reduction in losses is shown by having incorrect billing and average recovery is shown improved by withdrawing amounts without adjusting units.”

“Transmission and distribution losses have increased from 4.3 per cent in February last to 5.3 per cent this February. This indicates that theft detection campaign in your company has been slowed down, which shows your poor vigilance and monitoring.”

“From the above, it is evident that poor average of recovery as well as increase in line losses will hamper the entire efforts of the Ministry of Water and Power and the Government of Pakistan regarding revenue collection and overall improvement of operational efficiency of the sector.

“It is, therefore, desired to start forthwith vigorous recovery campaign against the defaulters on war-footing and ensure disconnection of defaulters, besides making strenuous efforts for the reduction of line losses within the ambit of the National Electric Power Regulatory Authority (Nepra) target. Moreover, disciplinary action against defaulting officials who failed to get targets may also be taken to improve efficiency of the company.

A similar warning letter was issued to the CEO in December 2014 but the situation only deteriorated in the next two months when average bill recovery fell from 88 per cent in October last year to 81 per cent this February, prompting the ministry to issue second warning letter to the Lesco head in the last four months.