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LAHORE: The independent BoDs of Discos, Gencos and NTDC have failed to follow the agenda of reforming the power sector by overcoming system inefficiencies and passing on the actual cost of service to consumers, said Ministry of Power Division sources.

It may be noted that the government had initiated the plan back in 1996 by incorporating Discos, Gencos and NTDC under independent Boards of Directors (BoDs).

The idea behind the initiative was to make the power sector independent of the influence of Water and Power Development Authority (Wapda), Pakistan Electric Power Company (Pepco) and Ministry of Energy.

But, according to the sources, all the three mother organizations have camouflaged the BoDs through their proxies to control Discos, Gencos and NTDC over the last 25 years. Resultantly, customers, regulators and international lenders are unhappy with the performance of all these entities.

Furthermore, they said, some 13 vehicles from different Discos are under utilization of the ministry officials. Senate standing committee on energy has also been pointing out time and again presence of 42 members K-Electric, Engro and Byco in different boards during the period of former special assistant to Prime Minister on energy Tabish Gohar.

It may be noted that the IMF has also been pursuing successive governments to ensure power sector reforms by passing on full cost of service to consumers and improving the efficiencies of power sector agencies. This demand has once again been resonated under the ongoing negotiations between the government and the Fund with little hope to any further improvement.

However, the recovery of Discos has been recorded at 89 percent, instead of an ideal achievement of 100 percent, said sources, adding that line losses stood at 17 percent, instead of the ideal level of 13.5 percent, during the fiscal year 2022-23.

Accordingly, the government had no choice but to pay Rs350 billion as Tariff Differential Subsidy (TDS) during the fiscal year under discussion, they added. The IMF is pressing the government to remove the TDS, which is in actual a subsidy to equalize the tariff differential of Discos.

Besides, recovery of the full cost of service is another area being pursued by the IMF under its power sector reform demand. The K-Electric has recently sought Rs25.6 billion tariff differential claim as it has reached an alarming and unsustainable level of bank borrowings and would not be in a position to clear over-dues.

The purpose of TDS is to unify the tariff of all the Discos, which is Rs18 per unit at present. Former finance minister Ishaq Dar had adopted this formula to ensure a uniform tariff despite different ratios of line losses (power theft).

In the recent past, the federal government has adopted a recovery-based load management plan by carrying out some 20 hours a day load shedding to the feeders with low recovery and high line losses.

Copyright Business Recorder, 2022

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