Distributing responsibility: Provinces spurn inefficient power distributors

Punjab proposal to take control of DISCOs rejected by other federating units.

Zafar Bhutta April 04, 2012


Sindh, Balochistan and Khyber-Pakhtunkhwa have turned down a proposal to set different power tariffs for provinces by handing over management of inefficient power distribution companies (DISCOs) to them.

The proposal was floated by Punjab in a preparatory meeting on upcoming energy conference, according to which management and operations of DISCOs should be handed over to the provinces.

At present, stakeholders are discussing different proposals that will be tabled in the energy conference to be held on April 9 in Lahore and chaired by Prime Minister Yousaf Raza Gilani. Chief ministers of all provinces will attend the meeting.

In the preparatory meeting held on Wednesday, no province seemed willing to enforce two holidays a week in an attempt to save electricity during summer. This fiscal year, the federal government is observing two off days a week, but provinces have not adopted it. In the meeting, a proposal to close markets at 8pm also came up for discussion.

“DISCOs are burdened with a host of problems and the three provinces do not want to inherit these,” a meeting participant said.

“The finance ministry had once floated a proposal that provinces will have to bear all liabilities of circular debt as well as subsidy and there will be no role of the federal government in this regard,” the official said, adding Punjab had efficient power distribution companies while companies of other provinces faced high line losses along with many other issues.

It was proposed in the meeting that subsidy on power should be eliminated to wipe out circular debt that had crippled the entire energy chain. Stress was also laid on improving corporate governance of DISCOs.

“The meeting participants called for constituting an expert commission comprising people from the private sector to resolve the issues of power companies,” a meeting participant said, adding the commission would work without involvement of government officials.

Nepra under fire

The National Electric Power Regulatory Authority (Nepra) came under fire for failing to regulate the power sector in a proper manner, including inability to resolve tariff issues, leading to several problems.

It was proposed that a high-level committee, headed by finance secretary, should be formed to reconcile receivables of Pakistan Electric Power Company (Pepco) with those of provinces. Provincial chief secretaries will work as members of the committee.

Representatives of independent power producers (IPPs), who were also present in the meeting, stressed the need for increasing gas supply to power companies so that more electricity could be produced to ease the energy shortage.

Who will organise the
energy conference

Separately, the Ministry of Water and Power and Planning Commission are locked in a tussle over ownership of the energy conference.

“The Planning Commission has been empowered to hold the energy conference, but the water and power ministry wants to organise it,” an official said.

However, the official said, no representative of the ministry attended the pre-energy conference meeting held at the Planning Commission.

The ministry will itself hold a meeting today (Thursday), but the Planning Commission has not been invited.

The ministry’s spokesman did not respond to the phone call when approached for comments.

Published in The Express Tribune, April 5th, 2012.


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