Power distribution companies complain about political interference

New board of directors fails to get plans implemented.


Express December 22, 2011

ISLAMABAD: The government seems working against its own agenda of reforming the power sector as all newly constituted boards of directors of power distribution companies complained on Thursday about ‘too much political interference and absence of decisive powers’.

The other common thing was that none of them could introduce significant reforms in their respective entities despite the fact that the delay has already cost Rs1,000 billion in subsidies in the past three years.

In a meeting of Boards of Directors of power distribution companies, the chairman of each board spoke about the miserable state of affairs that has brought a situation where these boards, made of eminent people, could not initiate much-needed reforms.

For the past year, the Ministries of Finance, Water and Power and Planning Commission have been saying that these boards would introduce corporate culture in the government-owned distribution companies.

“Islamabad must behave and stop interference in running these companies,” said Ahmad Rafay Alam, chairman of BoDs of Lahore Electricity Supply Company (Lesco). He said these political forces have barred the LESCO management to even take actions against those who are involved in power theft. He said the police were not cooperating to catch those involved in power theft.

Multan Electricity Power Company (Mepco) Chairman Rehman Naeem said that the boards’ powers have been overlapped by the powers of Pakistan Electric Power Company and all transfers and postings are made on the directives of the parliamentarians. He said so far the board could only approve a short-term business plan.

Mepco has the third highest losses of 18.5 per cent while its collection is 94 per cent of the billing due to non-payments of dues by the public sector. Naeem said the company’s receivables have shot up to Rs14.2 billion and it cannot collect more than Rs2.4 billion.

“There should not be unrealistic hopes for immediate drastic reforms but what is important that the government has set right directions”, said Naveed Qamar Federal Minister for Water and Power. He confessed that with present status everything will go down and despite all efforts the reforms were moving very slowly. He said the distribution companies have to take responsibility.

Peshawar Electric Supply Company (Pesco) – the company having highest line losses of 37 per cent – instead of reporting any progress on reforms asked the government to clear its Rs18.6 billion dues on account of freezing tariffs from 2008 to 2010. The board chairman said that the company’s accumulative losses have increased to Rs80 billion while in the last fiscal year it suffered Rs16 billion losses. He said 35 per cent area of the province was a no-go area.

General Manager Wapda Tahir Basharat Cheem criticised the government for delaying the reforms. He said currently seven distribution companies have acting chief executive officers who are unable to deliver due to various compulsions.

He also criticised the National Electric Power Regulatory Authority (Nepra) for delaying a decision on monthly fuel adjustments charges, as the people have refused to pay the amount.

Chairman of Islamabad Electricity Supply Company said that the company was dealing with multiple authorities. He said continuous rise in power tariffs was encouraging electricity theft.

“We all have collectively failed and there is a need to write a new chapter”, said Dr Nadeem ul Haque, Deputy Chairman Planning Commission. He said the sector has already cost Rs1,000 billion in three years and still bleeding.

“It is little sad the country could not make things happen in 20 years and now it reached a point where up to 3 per cent of economic growth is shaved off every year due to power outages and the budget deficit remains beyond the target due to massive subsidies,” he added.

Published in The Express Tribune, December 23rd, 2011.

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