PMO for Energy Efficiency Programme: Hafeez trashes Ministry's proposal

Finance Minister Dr Abdul Hafeez Shaikh has trashed a proposal of the Water and Power Ministry on establishment of Project Monitoring Office (PMO) for Pakistan Energy Efficiency Program, being funded by the Asian Development Bank (ADB).
Official documents available with Business Recorder suggest that the Executive Committee of National Economic Council (Ecnec), in its recent meeting was informed that the Ministry of Water and Power has sponsored the project at a cost of Rs 2.170 billion, including foreign exchange component (FEC) of Rs 1.741 billion. As far as the funding of the project, the Ecnec was informed that 80 percent of the funds are available under ADB TA 7060 for Pakistan Energy Efficiency Investment Program, and the remaining 20 percent are proposed to be met out from PSDP allocations.
The Ecnec was further informed that the umbrella project envisages establishment of a PMO to serve as a supporting arm to execute and ensure the Pakistan Energy Efficiency Investment Program spread in four Multi-Tranche Financing Facility (MTFF) for a period of six years up to 2016-17, identified by ADB report on "Sustainable Energy Efficiency Development Program".
The scope of the Pakistan Energy Efficiency Investment Program includes the following major components, to be executed by relevant energy sector organisations: (i) establishment of PMO office; (ii) investment program management and project preparation; (iii) strengthening of standards, labelling and testing facilities; (iv)) institutional capacity development for energy efficiency; and (v ) lamp waste management facility.
In discussion at Ecnec meeting, it was noted that management of a project is not alien to Ministry of Water and Power, which has already handled a number of other projects and has the requisite resources to do the same. Thus, there was no need to establish a new PMO. It was also explained that there was no ADB TA 7060, as mentioned in the summary. Rather, this is a loan. It was also stated that creation of PMO would entail unnecessary expenditure, which is not required. Besides, the relevant Ministries/ Divisions/ Departments should develop their own capacity to develop and execute such project.
The Ministry of Water and Power was of the view that establishment of PMO for the project was ADB's conditionality, which could be re-negotiated with it. After detailed discussion, the Ecnec turned down the proposal of the Ministry of Water and Power, backed by the Planning Commission.
The ECC also directed that the matter should be re-negotiated with Asian Development Bank and, if needed, it may be re-submitted to Ecnec. According to ADB website, the Government of Pakistan is planning to acquire, and implement, a phased strategy for undertaking a systematic, broad-based national energy efficiency program.
The TA will enable the Government to develop and implement a comprehensive energy efficiency sector development and investment program. The TA will design a suitable program proposal that supports the Government efforts to (i) establish an enabling policy and business environment for energy efficiency; and (ii) provide immediate financing of priority projects.
Key activities will include (i) in-depth energy efficiency market and economic assessment; (ii) awareness building for energy efficiency through short-term policy and regulatory recommendations as well as developing targeted public relations programs; (iii) strategy and action guidelines for initiating a sustainable long-term national energy efficiency program; (iv) a roadmap for implementing the national energy efficiency program with corresponding investment plans; and (v) design of bankable investment projects.