ISLAMABAD: Minister for Planning, Development and Special Initiatives Asad Umar has reportedly expressed annoyance at the Power Division and Petroleum Division for employing delaying tactics in implementation of decisions of Cabinet Committee on Energy (CCoE), well informed sources told Business Recorder.
Asad Umar who is Chairman of CCoE conveyed his ire during a meeting of the committee held on July 20, 2020.
Sharing details, sources said, on March 27, 2020, the CCoE noted the presentation made by the Power Division regarding circular debt reporting format and approved the proposed formats for monthly reporting on billing, collections and circular debt of power sector, with the direction that detailed information on subsidy may also be made part of the report. The CCoE further directed the Power Division to present figures of billing collections and circular debt of power sector for the month of February 2020 on the new formats to the CCoE in its next meeting for consideration. The Committee also directed NEPRA to ensure the integrity of the data contained in the reports to be prepared under the new format.
On July 30, 2020, Power Division, informed the committee that NEPRA team visited PITC from July 1-3, 2020. A revised format was given by NEPRA to the PITC on July 3, 2020. Power Division has certain reservations on the revised format as it takes into account average unit cost of electricity.
The format was earlier approved by the CCoE and Cabinet and NEPRA cannot change / revise the format. PITC has consumer wise tariff billing consumption and collection data which may be used for said purpose. The comments have also been shared with NEPRA on July 8, 2020 and July 14, 2020. The process is expected to be completed shortly. Once the due process is completed, Power Division will submit progress report to the CCoE accordingly.
On March 27, 2020, CCoE took note of the presentation and while emphasizing the criticality of the reforms, directed the Power Division to: (i) ensure completion of requisite actions by the concerned entities within their given timelines to achieve Commercial Operation Date (COD) of Competitive Trading Bilateral Contract Market (CTBCM) by November 2021; (ii) make detailed presentation to the CCoE on the design of the scheme, in a single agenda meeting in two weeks time; and (iii) submit a monthly report to the CCoE on the progress towards achieving COD of CTBCM.
The Cabinet Committee on Energy (CCoE) considered the summary of April 16, 2020 submitted by the Power Division regarding "Presentation to the CCoE on the Design Scheme of CTBCM and constituted a committee under the chairmanship of Minister for Power comprising SAPM on Petroleum, Secretary Power Division, Chairman NEPRA and representative of CPPA G to deliberate on the issues related to the CTBCM and come up with firm proposals thereon to the CCoE for consideration.
On July, 30, 2020, the CcOE was informed that monthly progress report for the month of June has been prepared and the same is under review by NEPRA and Power Division etc., and will be submitted to CCoE shortly. NEPRA requested to further abridge the report which was done and shared with NEPRA on July 10, 2020. Monthly progress reports will be submitted to CCoE by mid of the following months. A committee led by Minister for Power deliberated in detail on the four issues: forecasting, transparency, supply matching, demand growth and payment and settlement. It was agreed that these four issues/ areas were already properly addressed in the CTBCM design and proposal plan.
The presentation in this regard will be made to the CCoE. The forum may .provide some dedicated time for delivering presentation on CTBCM concept and Plan, as it includes key policy decision recommendations related to market opening. A presentation will also be given to SAPM for Power on the issue.
On April 2, 2020, CCoE took note of the presentation made by Power Division regarding capacity charges of Government-owned power plants and directed Power Division to consider reduction in Return on Equity (RoE) on Government IPPs upto 10% and the same in rupee terms, rather than in dollars, within a month of April, 2020 and submit a formal proposal to the CCoE, Power Division will keep Finance Division on board while formulating the proposal.
The CCoE directed Power Division to present the cash flow situation of power projects under WAPDA and PAEC to CCoE in its next meeting. Representatives of the two entities may also be invited to the meeting.
On July 30, 2020, CCoE was informed that the Minister for Power and Additional Secretary, Power Division had held a meeting with WAPDA. The meeting with SDP was to be scheduled. DG (SPD) had requested that the meeting maybe convened after Eid due to his engagements. Once the meeting is convened, the final report would be presented to the CCoE accordingly.
On April 2, 2020, CCoE noted the contents of the presentation made by the Power Division regarding fuel cost optimization of power plants and constituted a committee under the chairmanship of Minister for Power comprising Special Assistant to the Prime Minister on Coordination of Marketing and Development of Mineral Resources, Secretary, Finance Division, Secretary, Power Division and Secretary, Law & Justice
Division to negotiate with IPPs on heat rate test, currency indexation for local investors,' lengthening debt term, O&M costs and Return on Equity. The committee was to submit its report to the CCoE by June 2020 for consideration.
Regarding coal pricing optimization, the CCoE directed that this should be included in the mandate of OGRA to the extent of imported coal. Further, in case of any legislative changes required in the OGRA Ordinance, the same will be presented for approval at the appropriate forum to be completed by June 30, 2020. In the event, that legislatives hanges are not required the action shall be completed by 30 April, 2020.
The CCoE further directed that in case of any violation of the power plants economic merit order of dispatch, the same will be presented in the following meeting of the CCoE with reasons and the expected duration of the violation.
The CCoE approved the proposal for handling of interest payment, between various sectoral entities and directed the Power Division to include non-cash settlement therein as well.
Power Division in collaboration with Finance Division will finalize these proposals for Government entities and Private sector entities by May 2020 and June 30, 2020 respectively.
On July 30, 2020, A separate Committee was constituted by the government, pursuant to the decision of May 4, 2020 . The committee is carrying out this task. However, NEPRA may be in a better position to regulate coal pricing. The Power Division is working with the Petroleum Division and NEPRA as well as IPPs to determine viability of bulk coal purchasers. The SAPM (Power & Minerals) shall lead the process.
The Cabinet Committee on Energy (CCoE) considered the summary April 16, 2020 submitted by the Power Division regarding "Privatization of Power Sector Entities" and decided, as under:
Power Division may discuss the matter with Government of Balochistan on the proposed provincialization of QESCO and inform the CCoE regarding outcome of the discussion within one month.
On July 30, 2020, Minister for Power spoke to the Chief Minister Balochistan. Subsequently, the follow-up meeting with Balochistan Energy Department was conducted and an action plan to decentralize the management of QESCO to the provincial authorities had been agreed for implementation in a specified time-frame.
On April 20, 2020 CCoE considered a summary of Power Division regarding "Governance Reform of Power Sector" and approved a .proposal with the modification that the proposed experts may be hired in SPPS scales instead of MP scales. The committee also directed Power Division to come up with a 'comprehensive plan for governance reform covering all aspects, including reform of Boards of Directors, reporting structures, and empowerment for companies to take their own decisions. The action was to be completed in two weeks time. A Committee under Minister for Power, with Adviser Institutional Reform and SAPMs, Petroleum & Minerals was tasked to deliberate: a) whether decision making structure in Power Sector entities is appropriate or whether it requires changes and whether quality of Human Resource available at companies is appropriate and to submit a report by end May, 2020.
On July 20, 2020, Power Division said that Power Sector Governance Reforms agenda (work-in- progress document) was presented and it was stated that the final and detailed plan, indicating concerned entities for execution along with timelines for completion of tasks, was being developed and would be submitted in 4 weeks' time. The CCoE noted the position presented in the implementation report and expressed concern over non-implementation of the CCoE's decisions despite a lapse of considerable time.
The Chairman CCoE, Asad Umar, pointed out that since the CCoE decisions were ratified by the Cabinet, therefore, they were in fact Cabinet decisions and under the Rules of Business, 1973, implementation of the Cabinet or Cabinet Committees' decisions was the responsibility of the concerned Ministries/Divisions.
However, they were not paying enough heed to their implementation and no reports thereon were submitted to the forum for its consideration. The Committee directed the Power and Petroleum Divisions to implement CCoE's decisions related to them in letter and spirit, and also directed the Cabinet Division to keep a close watch on the implementation of CCoE's decisions and submit a report thereon to the CCOE for its consideration.
Copyright Business Recorder, 2020
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