The national assembly standing committee on economic affairs and statistics was shocked to learn on Thursday that the utiliation of $105 million out of the first tranche of $242 million from the ADB in 2008 for improving power transmission has reduced line losses of DISCOs by 0.5 per cent.
Enhancing efficiency: The meeting of the committee was held under the chairmanship of Malak Azmat Khan. The committee was informed by the additional secretary economic affairs division (EAD) Hassan Nawaz Tarar that the multi tranche financing facility of over $800 million for power distribution enhancement investment program was signed with ADB in November 2008. The first tranche of $242 million was meat for extension, augmentation, addition, new grid stations and transmission lines to provide an adequate and reliable power supply to customers. The conclusion date of first phase of the program is June 2012. Chief engineer Pakistan electric power company (PEPCO) Rai Khalid said the first tranche aims to enhance the efficiency of power distribution system. He said till June 2012, 146 projects are to be executed out of which 81 have been completed. He also said the loan has increased annual power distribution from 23,967 GWh in 2008-09 to 34,043 GWh in 2010-11. When Palwasha Khan of PPP asked how much the loan has helped in reducing line losses, he said annually power losses had declined from 21.1 per cent in 2008-09 to 20.6 per cent in 2010-11.
Reduction in line losses: She asked about the need for taking such an expensive loan if it did not yield reduction in line losses that were cause for massive financial losses to DISCOs. Rai Khalid claimed that the loan had helped to increase the base line of village electrification from 61 per cent in 2008-09 to 75 per cent in 2010-11, as additional 10,000 GWh per annum was available to the system. However, the members did not agree with the PEPCO figure. In reply to members’ queries relating to transparency in the program, Rai Khalid informed said the program was carried out under the strict criteria of ADB and all contracts were awarded on the basis on international competitive bidding. He said ADB would issue a project completion report after June 30, 2012.
Tarar told the committee that the Hyderabad electric supply company (HESCO) could not manage to utilise $13.5 million disbursed to it and it was refunded to ADB. He said the second tranche of $242 million would be utilised to improve power distribution infrastructure of the secondary transmission network to relive the system from distribution bottlenecks. He said the loan was not declared effective due to the absence of board of directors of Quetta electric supply company (QESCO). The government has fulfilled the requirement and the loan would be due for disbursement on September 30, 2011.
Additional responsibilities: Briefing the committee on post devolution functions of EAD, additional secretary Tarar said the division was entrusted with the international collaboration task of 10 devolved ministries. He said two separate wings have been set up to handle additional functions. He said 72 different posts were created against the estimated requirement of 187. The establishment division has agreed on 57 more, but the finance division has yet to approve the budget. However he said that EAD lacked the expertise to handle many of the issues and would be dependent upon the provincial governments to develop proposals for presenting to the donors. The committee recommended that more staff and office space should be allocated to EAD to handle additional responsibilities after devolution.
