Rs448b investment sought in power sector

Cabinet body recommended several measures to mitigate line losses, power theft

ISLAMABAD:

The federal cabinet, in its recent meeting, has recommended the government invest Rs448 billion on account of technological interventions to mitigate power line losses and theft.

The power division secretary said that the committee formed by the cabinet had held a series of meetings and recommended several measures to address line losses and power theft.

One of the measures recommended include paying a Rs225 billion tariff differential subsidy through the Benazir Income Support Programme (BISP). The committee also recommended an investment of around Rs60 billion on the installation of transformer metering.

“Line losses and power theft are key reasons to have resulted in the multibillion rupees circular debt,” underscored the committee.

The members of the committee also recommended investing Rs38 billion immediately on the installation of Advanced Metering Infrastructure (AMI) meters, and suggested an additional investment of Rs260 billion later to install AMI meters to control power losses incurred during transmission and distribution.

The committee has also recommended outsourcing the management of the power companies; a process which requires an investment of Rs8 billion in annual funding.

The committee observed that every successive government has made political appointments with respect to the Board of Directors (BoD) for power distribution companies (Discos) and National Transmission & Despatch Company (NTDC). They highlighted that such appointments also contributed to the losses incurred in the sector.

To address the issue, the committee recommended constituting a professional BoD and professional management of Discos and NTDC to ensure competence and relevance.

Earlier, the cabinet members had also suggested that the Discos either be privatised or provincialised as soon as possible, while their boards be reconstituted in the form of technical/sectoral experts.

Similarly, the committee suggested appointing professional management team in Water and Power Development Authority (Wapda), while a central authority should be identified for better coordination among the power sector agencies.

It recommended restricting outside Interference in the functional and operational activities of Discos.

It has also recommended implementing pilot project for pre-paid metering through subsidy. Under the project, cost of installing pre-paid meters for agricultural is Rs50,000 per tube well. Besides, per connection cost for commercial consumers will be 5% at the rate of Rs50,000 and 95% at Rs25,000/Connection)

Minister for Narcotics Control Shahzain Bugti proposed that a pilot project may be launched in his native district for solarisation of electric tube wells. As a whole, the members believed that there should be more than one pilot project for solarisation of tube wells in Balochistan and proposed to constitute a smaller committee in this regard with the Minister for Defence as convener and also Minister for Power and Minister for Commerce as its members.

The power division also submitted an inquiry report on the country wide power breakdown.

Earlier, the cabinet members had pointed out flaws in the inquiry report and said that it had mainly shifted the onus on the archaic system and not fixed any responsibility on the negligence of concerned officials.

A cabinet members exhorted that for such a major event, which engulfed the entire country in darkness, inflicting tremendous financial cost besides the hardship caused to the general public, the responsibility must be fixed and action taken against the erring officials.

Attention was drawn to billions of dollars committed by the Asia Development Bank (ADB) for refurbishment of transmission lines, which unfortunately remained under/unutilised. Alluding to operationalisation of SCADA based power management and distribution, the question was asked as to who was responsible for the abject delay.

The participants of the meeting also underscored the need to rectify energy mix by reducing dependence on imported fuels and enhancing reliance on renewable energy.

They stressed on correcting inefficiencies of regulatory authorities and endorsed the findings and recommendations of the inquiry committee, however, cautioned that allowing deviation from the merit order system would not be desirable, as billions of rupees were involved.

Published in The Express Tribune, March 14^th, 2023.

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