National Electric Power Regulatory Authority (Nepra) on Monday opposed privatisation of power Distribution Companies (Discos), suggesting that the companies should be run on the mode of Public Private Partnership (PPP).
“The current system of Discos cannot work in the long run. Nepra is not satisfied with the performance of Discos but according to my personal opinion their complete privatisation is not the solution of the problem. Discos should be run on PPP mode. Their management should be private, to be run with the support of the government,” said, Rafique Ahmad Shaikh, Vice Chairman Nepra, at a meeting of a Sub-Committee of National Assembly’s Standing Committee on Power.
The meeting was attended by Lal Chand, (convenor), Syed Ghulam Mustafa Shah, Ms. Saira Bano and Engineer Sabir Hussain Kaimkhani.
Rafique Shaikh, who has experience of working at an international level, cited the examples of Morocco and India where such models are working successfully.
He said Karachi Electric (KE) has brought down losses after partial privatisation but the company still has many issues.
He also suggested installation of pre-paid meters in areas where losses are high. He cited the example of Nigeria where he also worked in the power sector.
Rafique Ahmad Shaikh said that Unions in Discos are also creating hurdles in resolution of issues of consumers.
However, Alam Zeb Khan, Senior Joint Secretary (E&D), Power Division stated that the government has already decided to give five profit making Discos to private sector on the basis of Concessional Agreements (CAs) whereas five loss-making Discos will be given to the private sector on the basis of management contracts. He clarified that Privatisation Commission is working on Expression of Interests (EoIs) . Replying to a question, he stated that most of the functions of Pakistan Electric Power Company (Pepco) have already been transferred to the respective Discos.
Vice Chairman, Nepra also commented on Pepco’s status, saying that according to the regulator’s viewpoint and in the light of a High Court decision, the existence of Pepco is illegal.
Nepra also shared its letter written to Power Division, in which it clearly stated that the existence of Pepco is illegal.
The panel also discussed the issue of transformer blast, which claimed 13 lives in Hyderabad Electric Supply Company (Hesco) and Engineer Sabir Hussain Kaimkhani said that the relatives of the deceased are planning to hold a sit-in for not being compensated.
The representative of Hesco noted that the company’s Board is meeting on Tuesday (today) to approve compensation to the relatives of the deceased. He said the Disco has offered them Rs 10 million.
Vice Chairman Nepra informed the committee that it approved Rs 3.5 million for the deceased in KE, Sepco and Pesco and a show-cause notice has already been issued to Hesco, after the death of over a dozen people due to transformer’s blast.
The panel recommended that the amount of compensation should be at par with other Discos. Saira Bano, MNA, said that corruption is at its peak in Hesco as hooks can be seen in several areas of Hesco.
She proposed that Discos should be privatised as these have failed to provide relief to the consumers who pay bills honestly.
Syed Ghulam Mustafa Shah, MNA, raised the issue of net metering in KE and his own constituency in interior Sindh. The officials of Disco assured that they are making all-out efforts to streamline supply of power to the consumers.
The Sub-Committee also discussed closure of power Generation Companies (Gencos). The CEO of CPGCL and Senior Joint Power Division were not seen on the same page on the closure of Gencos.
Nepra officials supported closure of inefficient Gencos on the plea that they fall last in the Economic Merit Order (EMO).
“Dispatch of power plants fall under the purview of NPCC who gives dispatch instructions to all the power plants synchronized with the national grid keeping in view EMO and overall system demand. Hence, the possible reasons for low utilization factor of TPS Jamshoro are higher outages/low availability and expensive generation/higher ranking in the EMO,” said Nepra in its written brief.
