Power ministry to arrange Rs 550 billion in six months: relief to consumers in election year
The Ministry of Water and Power is reportedly engaged in arranging Rs 550 billion liquidity in the next six months to provide relief to electricity consumers with the objective of ensuring that loadshedding is not an issue that would determine the 2013 general election results.
Copyright Business Recorder, 2012
"We have to generate Rs 550 billion through different measures including subsidy and recovery to run the system satisfactorily. We have installed and generation capacities but the main issue is liquidity for electricity generation," said an official on condition of anonymity.
Secretary Cabinet, Nargis Sethi, who has been given additional charge of Secretary Water and Power, is spending most of her time in the Ministry of Water and Power personally supervising the bill recovery process considered to be a major reason for the intractable inter-circular debt. Her real test will be from December 15, 2012 when hydel generation will be at its minimum due to annual canal closure for maintenance.
"Discos' average per month collection is about Rs 37-38 billion, ie, Rs 225 billion collection in six months. This implies that the government has to arrange Rs 325 billion liquidity to run the system during the next six months," said an official on condition of anonymity. According to provisional Discos financial plan March to December 2012, the amount of gross billing will be around Rs 572 billion, of which normal collection is expected to be Rs 522 billion and arrear collection Rs 59 billion.
The sources said, a Joint Secretary Mussadiq and chief of National Power Control Centre, Masood are working on liquidity, furnace oil, diesel and gas requirements to guarantee reliable power supply in December and January when canals will be closed. The government has to import furnace oil up to 27,000-28,000 tons per day to run thermal power plants at maximum level in winter.
Mrs Sethi, sources said, has also been given tough time by some of the federal ministers in the Cabinet meeting on October 31, 2012. On some queries raised by the Cabinet members, she briefly stated that the energy sector was working on 55 percent efficiency. Explaining the position, she informed the Cabinet that Discos technical line losses were 9 percent, followed by 3 percent NTDC losses, theft accounted for 19 percent while non-recovery was 14 percent.
When the Cabinet members criticised her for not making any progress in power supply, she explained that in a short period of 21 days, she along with her team had worked with full commitment and devotion. According to sources, she used Cabinet Division's helicopter to visit Gencos. Her critics argue that a helicopter can only be used in emergency and presently there is no such situation. Mrs Sethi further said she would make a comprehensive presentation to the Cabinet soon and respond to all aspects of the crisis.
Mrs Sethi has claimed that she ensured electricity during Eid holidays, which insiders say is normal as Eid days are exempted from loadshedding. They further maintain that traditionally there is no loadshedding from October 15 to December 15 because of massive release of water from reservoirs and lower demand due to no air conditioner use.
The country is presently facing 2600 MW shortfall while hydel generation is about 4500 MW and thermal 6800 MW. Insiders in the Ministry of Water and Power, however, argue that power sector can not perform well in the absence of power sector experts. They further accuse Mrs Sethi of giving the control of the entire power sector to District Management Group, brought in the ministry at her insistence.
Naveed Ismail, who is enjoying a package of Rs 2 million per month, has been sent back to Genco Holding created especially to accommodate him. Power sector experts maintain that it is essential to maintain supply and demand equilibrium. Energy security must be the overarching objective in all national development plans. "To achieve this end we need to address specific issues which are related to both technical aspects and governance of the sector," experts argue.