Bringing transparency: SECP to initiate ‘cost reporting regulatory’ framework

Order introduced for companies wholly or partially engaged in power generation

ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has notified the Electric Power Generation Industry (Cost Accounting Records) Order 2015 to introduce cost reporting regulatory framework for power sector companies and bring transparency in them.     

The Cost Order 2015 has been introduced for the companies engaged wholly or partially in generation of electric power energy in Pakistan under the licences granted by the National Electric Power Regulatory Authority (Nepra), a statement of the Commission issued here said.

The purpose of the Cost Order was to introduce cost reporting regulatory framework for power sector companies in order to bring transparency and to increase public confidence, in view of the fact that power sector is central to public policy.

The Vision 2025 of Pakistan also takes into account power sector as major pillar of progress.

It may be mentioned here that the Cost Order is not Independent Power Producers (IPPs) specific but for all current and prospective power producers.

Similar orders have been issued for the chemical, fertiliser, sugar, cement Industry, and the vegetable ghee and cooking oil companies.

Previously, Transparency International Pakistan (TIP) had also approached SECP and stressed the need for conducting cost audit of IPPs under the applicable laws.

In SECP’s view, the issuance of Cost Order would provide a legal framework within which Nepra would be able to determine prudence of costing claimed by the generation companies while seeking tariff.

Further, by introducing these and similar initiatives in the oversight of generation companies, the power purchaser would be in a stronger position to determine whether billing by the company has been done in a transparent and fair manner, which will be a great service for the general public in the current scenario.  

Published in The Express Tribune, September 24^th, 2015.

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