ISLAMABAD: The Federal Cabinet has reportedly thrown Power Division’s plan of Performance Monitoring Units (PMUs) in Discos (Distribution Companies) into the dustbin saying that blocking passports, CNICs and stopping foreign travel were diversions from real sustainable solutions, well-informed sources told Business Recorder.
Sharing the details, the sources said, Power Division apprised the Cabinet in its last meeting that after the unbundling of WAPDA, the power distribution business had been entrusted to ten Distribution Companies (excluding Karachi, which was being served by a private company), and that ever since then the appointment of suitable persons as Chief Executive Officers (CEOs) of these Discos had always been a challenge for the Government.
Various modes had been experimented in the past, but all efforts to fill the positions of CEOs, with the required skills and expertise to turn around these companies, had failed.
PMUs at Discos: Army officers’ posting not approved by Cabinet
As a result, the power sector had been beset with grave inefficiencies, which had resulted in the piling up of circular debt up to the tune of Rs.2.310 trillion, as of June 2023. The receivables of Discos had also piled up to the tune of Rs.1.786 trillion, thus making the sector unsustainable.
The Power Division noted that during financial year 2023-24, it was apprehended that these Discos might make losses of around Rs.589 billion, including ‘under recovery’ and losses above NEPRA’s threshold.
The Power Division emphasized that DISCOs were created for corporatization followed by privatisation to bring improvement in the distribution system. However, due to rampant mismanagement, the whole process for further reforms had been derailed. Resultantly, these entities had now become the biggest, and constant, source of bleeding for the national exchequer.
The Power Division further stated that in order to minimise losses in the power sector, the Government had launched a campaign against electricity theft and recovery from defaulters.
However, it was apprehended that weak leadership of Discos might not be able to fetch the desired results. Specifically, Discos – HESCO, SEPCO, PESCO and QESCO were facing serious capacity limitations in terms of management and requisite administrative assistance, which were likely to take a huge toll on the financial position of these Discos.
It was apprised that the Apex Committee meeting of the Special Investment Facilitation Council (SIFC) held on October 4, 2023 had agreed on the establishment of an Anti-Theft Taskforce, comprising officers from law enforcement establishments, District Administration and intelligence agencies’ which would be attached to Discos including those incurring significant losses, ie, QESCO, PESCO, SEPCO, MEPCO and HESCO.
The pilot project would commence with HESCO and then be replicated in other Discos after evaluating the results of the pilot intervention in HESCO.
Power Division proposed that; (i) a Performance Management Unit be established in each Disco. As a pilot the PMU shall be established in HESCO consisting of officers from PAS, FIA and Intelligence Agency headed by a BS-20 officer of Pakistan Army.
This PMU shall report directly to Secretary Power Division; (ii) Ministry of Defence may post one serving BS-20 officer from Pakistan Army, along with team and allied staff, for strengthening the management of each DISCO.
Initially, only one such team would be required for HESCO; (iii) Ministry of Defence may post one officer from Intelligence Agencies in each Disco; (iv) a serving police officer of BS-18 may be posted in each DISCO by respective Provincial Police authorities for coordination with Police authorities in the Anti-theft campaign; and (v) NADRA/IMPASS and the banks may be directed not to issue or renew passports or open bank accounts of those defaulting individuals, whose lists may be shared by Power Division with these authorities based on the input provided by PMU.
It was further contended that BS-17 officers from the Pakistan Administrative Service (PAS) had been posted in all Discos in the past, but had then been posted out. FIA officers of BS-17/18 were attached to three Discos (HESCO, SEPCO and PESCO) in the first instance, to facilitate immediate action against colluding employees of Discos during the theft and under recovery campaign.
The Power Division noted that the summary was shared with Ministry of Finance, Ministry of Defence and Ministry of Interior for comments.
According to sources, during discussion, the Cabinet deliberated at length on the proposals of the summary. The proposal to establish a Performance Management Unit in each Disco, consisting of officers from PAS, FIA and an Intelligence Agency, headed by a BS-20 officer of Pakistan Army, was not agreed to.
The Cabinet argued that the real solution lay in Discos discharging their primary responsibility of stopping electricity theft and resolving their internal institutional inefficiencies, instead of finding quick short-term fixes. It was also observed that blocking passports, CNICs and stopping foreign travel were diversions from real sustainable solutions.
Rather than disturbing the functional bureaucracy and the armed forces, which have more important work to do, there was a need for the Power Division to build its in-house teams to monitor the affairs of Discos.
A Cabinet member observed that that there was no quick solution to this longstanding issue; rather, the proposed arrangement under PMU would only yield an optical illusion, as well as legal and political long-term complications. It was added that a proper plan, with clear timelines and an exit strategy, was needed.
The caretaker Prime Minister expressed his dissatisfaction at the poor performance of Discos and directed the Power Division to submit a comprehensive plan with clear targets, responsibilities and timelines.
An official told this scribe that Power Division has received Cabinet decision including concerns of caretaker Prime Minister, adding that new summary will be prepared in the light of directions of Cabinet.
