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ISLAMABAD: The World Bank (WB) has raised alarm at the delay in completion of Electricity Distribution Efficiency Improvement Project (EDEIP) in three Distribution Companies (Discos), well informed sources told Business Recorder. The Bank’s Implementation Support Mission (ISM) reviewed progress on projects in three Discos, Hyderabad Electric Supply Company (HESCO), Multan Electric Power Company (MEPCO) and Peshawar Electric Supply Company (PESCO), on March 29, 2024.

World Bank’s Operation Manager Pakistan Gailius J Draugelis, in a letter to Ministry of Economic Affairs stated that since the last ISM in October 2023, considerable progress has been achieved in advancing various procurement packages. Moreover, the land acquisition process for the eight new grid stations to be constructed under EDEIP, two by HESCO and six by MEPCO, is on track and progressing smoothly; however, there are a few key issues that have started to affect project performance and need urgent attention and close follow-up.

Commenting on delay in the hiring of Project Implementation and Management Support Consultants (PIMSCs), World Bank maintained that the actions agreed during the last mission to engage PIMSCs have not been met and the hiring process is not complete. The procurement and implementation of a few key packages, e.g., grid station works under Component 1 of EDEIP and deployment of technology and smart meters under Component 2 of EDEIP is behind schedule, and will commence after the hiring of PIMSCs.

Discos: massive overbilling detected

These consultants will help prepare the design and associated environmental and social instruments and carry out bidding for these pending activities. In addition, they will also help with the implementation supervision of all activities financed under EDEIP therefore their engagement is crucial and needs to be completed expeditiously. MEPCO should proceed with the contract award by April 20 while HESCO and PESCO should submit their draft negotiated contract and combined evaluation report by April 30 and May 15, respectively for the Bank’s No Objection.

On underutilisation of the Reform Support Component, the Bank said that only $6 million of $20 million available under component 4 of EDEIP have been allocated under the approved procurement plan and disbursement is less than half a percent. The first major activity will be hiring Market Reform Consultants for which Expression of Interest (EoIs) were received in February 2024. MoE, in collaboration with the Central Power Purchasing Agency-Guaranteed (CPPA-G) should complete the short-listing and issue a Request for Proposal (RFP) by April 30, 2024. Procurement of a few Direct Selection packages, including software and tools of about $1 million should be completed as soon as possible. MoE also needs to fill the position of procurement specialist which has been vacant since Feb 2024 to expedite procurement of other activities to support power sector reforms.

Sharing views on strengthening implementation capacity of Project Management Units (PMUs), the Bank said that the departure of key PMU staff and their frequent turnover has caused considerable delays in procurement and timely reporting by the Discos. Therefore, Discos’ Management should avoid frequent transfers of key PMÚ staff and strengthen the PMUs, particularly in HESCO and PESCO, by appointing and filling all vacant positions, including Occupational Health & Safety (OHS) Specialist and Gender Specialist (as agreed in the Environmental & Social Commitment Plan), with competent and dedicated staff by no later than May 31, 2024, to monitor and conduct the implementation of various activities expected to be launched soon.

The Bank’s Manager Operations for Pakistan noted that action matrices to help keep lack of process and the Environmental& Social Mission notes (August 2023 and April 2024) to provide further guidance and ensure compliance with the Bank requirements have been shared separately by the task team with each Disco.

Discos should share the progress on these action matrices with the Bank and MoE by the end of each month and should keep the STEP system always updated.

Copyright Business Recorder, 2024

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