Bidders show no interest in tendering process due to PKR slide: Power cos facing equipment shortage

ISLAMABAD: The power sector companies are facing acute shortage of equipment as bidders are not showing an interest in tendering process due to frequent depreciation of PKR against the dollar.

This was disclosed by the team of Islamabad Electric Supply Company (Iesco) headed by its Chief Executive Officer (CEO) Dr Amjad Ali Khan during a public hearing on adjustment request for indexation of Multi-Year Tariff (MYT) components for FY 2021-22 and other adjustments in the consumer-end tariff of Iesco.

Iesco has sought an increase in its tariff by Rs 3.73 per unit for annual indexation of Rs 44.448 billion for FY 2021-22, of which Rs 11.671 billion would be for salaries, Rs 5.249 billion for post-retirement benefits, Rs 4.420 billion other expenses, Rs 5.674 billion for RORB, Rs 6.643 billion as depreciation, Rs 6.947 billion for sales mix, Rs 2.367 billion as advance tax (FY 2020-21) and Rs 3.164 billion as supplemental charges for (FY 2020-21). The company’s other income will be Rs 2.687 billion which will be reduced from total revenue requirement.

The Authority comprising Chairman, Tauseef H Farooqi, Vice Chairman, Rafique Ahmad Shaikh and Member KP, Engineer Maqsood Anwar Khan questioned the reasonability and justification of amount sought for annual indexation for FY 2021-22 when the company’s provisional licence will expire after six months.

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The officials of Nepra, however, clarified that the petition of Iesco for extension in its licence is already with the regulator which is expected to be decided before the expiry of provisional licence.

The Authority also sought deficiencies in the system of the company including pendency of meters and rehabilitation of its distribution system. Iesco’s team informed the Authority that it is facing acute shortage of equipment meant for rehabilitation as bidders are not showing interest in tenders due to frequent depreciation of Pak Rupee verses dollar.

“Bidders did not participate in three tenders due to frequent devaluation of currency as the validity of tender was 90 days. In this last tender only a single party offered bid. We have now reduced the validity of bid to 45 days,” said the officials of Iesco.

Chairman Nepra also suggested that Iesco should reduce the validity period from 90 days so that bidders supply required equipment early.

He also enquired about pendency of meters in Iesco. CEO noted that presently pendency in domestic and commercial connections is around 22,000 while industrial connections applications are just around 13.

Copyright Business Recorder, 2021