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ISLAMABAD: Power Division has reportedly decided to adjust Gencos’ surplus employees in power Distribution Companies (Discos) subject to assurance of over Rs 14 billion by the Finance Ministry for onward payment to Discos in accordance with the actuarial value of pension and pension benefits of 1806 surplus employees, well-informed sources in Finance Division told Business Recorder.

The Cabinet Committee on Energy (CCoE) during its meeting held on September 10, 2020 decided immediate closure of certain power plants/ units of Generation Companies (Gencos) having an aggregate capacity of 1798MW.

Pursuant to the CCoE decision, Gencos were required to apply to Nepra for amendment in their respective generation licences (licencee, proposed modification-LPM) to accordingly reduce their capacities.

With such modification in the generation licences, tariff of respective plants will be discontinued, resultantly Gencos will cease to get capacity charges in lieu of 1796MW units.

Gencos are paying salaries and pensions out of the capacity charges. Gencos will not be in a position to pay salaries to 1937 employees and pension to 2268 pensioners after delicencing of these plants.

On the direction of Power Division and based on the detailed list provided by GHCL, Pepco has worked out the possibility of adjusting surplus employees in various Discos. Accordingly, Pepco has confirmed the possibility of adjustment of 1806 employees (ranging in BPS-1 to BPS-16) in Discos subject to payment of their accumulated pension contribution by respective Gencos to Discos on the cut-off date. The remaining 131 employees (out of total 1937 employees) are either retiring shortly (70 employees) or working on contract (21 employees) or otherwise working on higher scales (40 employees) that will be adjusted within Gencos as and when vacancies become available.

The amount of pension expenses for 2268 pensioners is Rs 3.134 billion per annum (based on FY 2019-20). Actuarial valuation of pension benefits of employees (proposed to be adjusted in Discos) is Rs 14.409 billion as on June 30, 2020 that will be subject to adjustment as on the cut-off (actual adjusted) date.

The sources, said, Power Division has submitted two proposals to sort out employees issues: (i) Finance Division may give a one-time grant of Rs 14.435 billion, subject to adjustment on cut-off date, to Gencos for onward payment to Discos in accordance with the actuarial value of pension and pension benefits of 1806 surplus employees of plants to be closed immediately and;(ii) Finance Division may take over the liability of existing 2258 pensioners of the power plants with annual liability of Rs 3.134 billion.

According to the CCoE decision the government decided to close defunct plants (Gencos) of 1519MW which will result in saving of Rs 5.674 billion per annum. There are 2,015 working employees and 2,077 pensioners attached to these plants whose annual salaries’ and pensions’ impact is of Rs 1.326 billion and Rs 2.9121 billion, respectively. The accumulated liability on account of pension benefits amounts to Rs 24.614 billion as on June 30, 2020.

The plants/units to be retired are as follows: (i) TPS Jamshoro(unit 2&3) 340MW (strategic asset); (ii) GTPS Kotri (unit 3&7) 130MW (delicenced by Nepra); (iii) Block 3&4, 450MW (delicened by Nepra); (iv) TPS Quetta, 22MW (delicenced by Nepra); (v) TPS Muzaffargarh (5&6), 355MW; (vi) SPS Faisalabad units (1&2) 92MW (delicenced by Nepra); (vii) GTS Faisalabad (units 1&4), 75MW (delicenced by Nepra); (viii) NGPS Piranghaib, Multan (units 1, 3 & 4) 192MW (delicenced by Nepra); (ix) GTPS Shahdara (units 1 to 6) 85MW and; (x) FBC Lakhra (units 1&2) 70MW.

Retained plants will result in saving of Rs 8.608 billion per annum and a permanent reduction in capacity by 2475MW. There are 2,987 working employees and 2,215, pensioners attached with these plants whose annual salaries, and pensions impact is estimated at Rs 2.318 billion and Rs 4.416 billion respectively. The accumulated liability on account of pension benefits amounts to Rs 37.560 billion as on June 30, 2020.

TPS Jamshoro 400MW (units 1 & 4) will be retained during low wind; GE Block (units 5 to 10) 415MW to be retained on merit order; Siemans Block (units 11 to 13) 413MW to be retained if unit 13 is restored; 747KW Block (units 14 to 16) 747MW to retained; TPS Muzaffargarh (units 1 to 14) 920MW to be retained in the system as contingency reserve with gas fuel; GTPS Faisalabad (units 5 to 9) 140MW will be retained till commissioning of Trimmu power house and also reactive compensation in Faisalabad area till installation of SVC and 525MW CCPP Nandipure 525 MW to be retained on merit order.

Talking about the impact of plants on active list for privatisation, the sources said, privatisation model will be decided by Privatisation Commission. However, there are 634 working employees and 498 pensioners attached with the plants whose annual salaries’ and pensions’ impact is Rs 305 million and Rs 666 million respectively. The accumulated liability on account of pension benefits amounted to Rs 10.293 billion as on June 30, 2020.

Copyright Business Recorder, 2020

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