Talks under way with WB, ADB to sort out issues pertaining to Discos, says energy minister

ISLAMABAD: Caretaker Minister for Energy, Muhammad Ali said on Friday that Power Division is in discussions with the World Bank (WB) and Asian Development of Bank (ADB) including on three options to sort out issues pertaining to power Distribution Companies (Discos).

Replying to a question during a press conference, he said, overall circular debt has reached Rs 5400 billion of which power sector’s circular debt is Rs 2500 billion and gas sector debt Rs 2900 billion. He noted that the government is paying interest of nearly Rs 1000 billion.

The minister contended that political governments of the past did not take steps to usher basic reforms in the energy sector but the “caretaker government is on it.” He; however, stated that technical experts would be needed for this purpose as the incumbent team is insufficient to work on reforms.

Smart meters, TMS: World Bank asks three Discos to start bidding process

“I have held discussions with World Bank, ADB and International Finance Corporation (IFC) for future line of action on Discos, i.e., privatisation, handover of Discos management control. ADB has been requested to help in basic reforms in the power sector,” he added.

He said ongoing massive crackdown against power theft is yielding significant results. He said drive against power theft is not for a limited time period, but it will continue in future, as well and “we will expedite and expand its scope.”

The Minister said the government is working on a comprehensive plan to change the Board of Governors of the Distribution Companies. He said the CEOs of the Discos will also be reshuffled to improve their governance and capacity.

Muhammad Ali said steps are being taken to check electricity theft and to pass-on minimum burden of an increase in electricity tariffs onto the consumers.

The Minister further stated that QTAs of KE have not been adjusted for the last one year. Now the government has involved Nepra and K-Electric’s management to stagger it so that minimum burden is passed on to the consumers of Karachi.

He informed the media that the government is taking practical steps to ensure availability of gas in the winter season. He said we are expediting efforts for exploration of new oil and gas reserves as no significant attention was paid towards this sector during the past ten years.

The Minister said we have established a Central Control Room in the Power Division to monitor the ongoing campaign against power theft.

Responding to another question, he said that negotiations with international IPPs on dollar-based PPAs is not possible as any such attempt will hurt Pakistan’s position at the international level.

Responding to a question, the Minister said that the price injustices in the gas sector must be removed.

Ali argued that the rich buy gas at Rs 1100 per MMBTU whereas poor section of the country buys an LPG cylinder for Rs 4500, adding that this gap has to be minimised if not eliminated.

He further stated that in one country, one region buys gas at Rs 1100 per MMBTU while another region buys gas at 2700 and 3700 rupees.

Later on talking to reporters, he said that new gas prices will be notified within two weeks after formal approval from the federal government.

Copyright Business Recorder, 2023