PSO finally paid to switch the lights back on

Permanent solutions to energy crisis to be discussed at later meetings.

ISLAMABAD:

Faced with an energy crisis requiring long-term structural change, Prime Minister Yousaf Raza Gilani has opted for the quick-fix solution of closing businesses and shops. The PM has asked the ministry of water and power to persuade the provinces that two-day weekly holidays and shop closures at 8pm will overcome the load-shedding crisis which has led to countrywide protest.

On the PM’s orders, the finance ministry also released Rs9 billion to Pakistan Electric Power Company (Pepco) on Monday, which in turn will be paid to Pakistan State Oil (PSO), whose receivables have crossed an alarming Rs155 billion. PSO reportedly received Rs3.8 billion from Hubco and Kapco on Thursday and Friday.

(Read: Outstanding dues - PSO halts supply to power companies)

For now, the money paid to PSO will result in the resumption of fuel to thermal power plants, which, in turn, will help address the crippling electricity shortage in the country.

During a high-level meeting on the energy crisis chaired by the PM, the complete privatisation of power generation companies (Gencos) was discussed as a measure to tackle the circular debt that has plagued the country’s energy chain.

(Read: Private sector regime - Businessmen welcome transfer of Gencos)

The government is already working on a plan to hire private sector companies for the operation and maintenance of Gencos. The privatisation of Gencos would theoretically enable the government to provide electricity on a cash rather than credit basis, thus reducing the severe circular debt which currently amounts to Rs450 billion. Sources said that, under this plan, Gencos would directly provide power to their consumers.

The special emergency meeting was attended by Minster for Finance Dr Abdul Hafeez Sheikh, Minister for Water and Power Syed Naveed Qamar, Minster for Petroleum Dr Asim Hussain among others.

On the other hand, power tariffs are set to increase by over Rs3 per unit due to fuel adjustments for August, after a decision taken by the National Electric Power Regulatory Authority (Nepra), who are scheduled to hold a public hearing on Tuesday (today).

Pepco is owed over Rs300 billion from clients and Rs 155 billion from government departments, including Rs74 billion from the provinces. The meeting emphasised that money should be deducted directly from provinces’ accounts where there is a reluctance to pay bills.

Sources told The Express Tribune that it was also agreed that an energy conference would soon be held to develop a consensus on the two-day weekly holiday proposal. The Prime Minister also directed the committee members to submit their recommendations in a special cabinet meeting, to be convened shortly, aimed at resolving the load-shedding crisis.

Published in The Express Tribune, October 4^th, 2011.