FRIDAY DECEMBER 23: Political interference, regulation issues, law & order: power sector reforms facing big snags

ISLAMABAD: Political interference, non-implementation of tariff determinations, withholding of tariff petitions by National Electric Power Regulator Authority (Nepra) as well as governance issues are major hindrances in the power sector reforms. This was the crux of a meeting on power sector reforms, co-chaired by Minister for Water and Power, Naveed Qamar and Deputy Chairman Planning Commission, Dr Nadeem ul Haq here on Thursday.
These issues were raised by the newly-appointed Chairmen of Board of Directors (BoDs) of eight Distribution Companies (Discos) who were invited by the Planning Commission for discussion on their business plans to implement the envisaged reforms in the power sector.
The management of the Discos pointed out management issues faced to them as well as political interference, regulations issues, and law and order problems challenging the desired reforms in the power sector. Chairman Lahore Electric Supply Company (Lesco) said that they would be able to control losses considerably if political interference is eliminated. He said political interference was at various levels with posting and transfers.
"We are facing political interference in postings and transfers from the federal government and are grappling with the police's refusal at provincial level to register FIRs against power stealers." Chairman Lesco also underlined the need for putting in place electricity theft legislation to empower the distribution companies to resolve all issues.
Chairman Gujranwala Electric Power Company (Gepco) urged the Planning Commission to ensure that there should be no political interference from the Ministry of Water and Power. Additionally, he said there was complete lack of co-operation by police in registering FIRs against those involved in power theft. Similar complaints were made by representatives of Hyderabad Electric Supply Company (Hesco) and additionally Hesco officials also lamented the prevailing 'Kunda system' which was possible through complicity between those with political backing and officials of distribution companies.
About the issue of procurement, Chairman Hesco pointed his finger at powerful cartels and urged the Competition Commission of Pakistan (CCP) to take action against them. The government agreed to the proposals of various distribution companies that there was a need to provide required capacity building support to Nepra to deal with the post-unbundling of distribution companies.
Shahid Hafeez, consultant hired by the government on power sector stated that there was no time limit for Nepra to notify tariff and sometime distribution companies have to wait for months. The tariff determination and notification process must be streamlined in the post-unbundling of distribution companies to achieve their business plan targets and recover fuel charges on a timely basis.
Chairman Islamabad Electric Supply Company (Iesco) requested the government that they should be allowed to renegotiate loans with multilaterals, which have been obtained at high interest rates. The company was reminded by former Managing Director of KESC Naveed Ismail that their assets are not reflected on their balance sheets and they would not be able to take a loan unless their assets are reflected on their balance sheet.