Faced with rising criticism over the slow pace of power sector reforms the government on Thursday urged the board of directors of the power distribution companies (DISCOs) to exercise complete powers without any fear to expedite reforms which were holding hostage the national economy.
Chairmen of all boards took the plea that they were not fully empowered due to which they were unable to address human resource constraints, financial management issues, reduction in lines losses and improvement in recovery. The government had convened a special meeting with the chairmen of DISCO boards and Chief Executive Officers to assess their performance in the last ten months and review business plans for the current fiscal year.
The National Electric Power Regulatory Authority (NEPRA) was severely castigated by the board heads on its failure to timely notify monthly fuel adjustment costs and yearly tariff. They complained that NEPRA had failed to notify tariff for DISCOs even though six months of the current fiscal year have elapsed. They demanded immediate restructuring of NEPRA to address the woes of DISCOs.
Finance Minister Abdul Hafeez Sheikh and Minister for Water and Power Naveed Qamar assured complete support to DISCO boards. However they stressed the boards to take steps to improve governance in the entities for better service delivery to the customers. Addressing the meeting, Deputy Chairman Planning Commission Dr. Nadeem ul Haque said that the losses incurred by the power sector have been a major reason for increasing the fiscal deficit from estimated 4 per cent to over 6 per cent of GDP for the last three fiscal years. He said that the government has incurred Rs1000 billion in costs for providing subsidy during the last three fiscal years.
Nearly all the chairmen of boards sought powers to implement decisions to start reformation of their entities. Head of Economic Reforms Unit of Ministry of Finance Dr. Khaqan Najeeb pointed out that the boards needed no extra powers they were empowered under the companies ordinance 1984 to make decisions. However, chairmen of boards said no one informed them that they could make decisions as their management kept looking to the Ministry of Water and Power and defunct Pakistan Electric Power Company (PEPCO) for decisions. Finance Minister quipped that if they would keep seeking power then they would never get it. They were fully autonomous and should exercise powers which would establish their authority. A representative of the World Bank said that the government and boards were passing the buck to each other and in reality they should work as a team to bring the power sector out of the crisis.
Minister for Water and Power Naveed Qamar asked the boards to take responsibility and ownership of their companies otherwise they would not be able to perform. He said boards will have to take tough decisions. The boards according to him were responsible for policy while the management was responsible for implementation. He asked the boards to fix benchmarks for management to reward or punish them based upon their performance. Chairman IESCO board Mohsin Khalid said that the company was faced with human resource constraints. He said that the company could not reward employees on their performance as under the present rules CEO could not approve any reward for employees. Former MD of SSGCL Munawar Basheer Ahmad said without restructuring the service structure and introducing compensation packages the efficiency of the employees of DISCOs would not improve.
Proposing a solution, former MD PEPCO Tahir Basharat Cheema said that the boards were fully empowered and they should de-link from the national pay scales and notify their own pay scales that would resolve the problem. Dr. Nadeem ul Haque supported his proposal and said that under companies ordinance 1984, boards were empowered to notify new pay scales and hire new staff. Chairmen of all boards complained about political interference in transfers and postings by the Ministry of Water and Power and PEPCO. However, the ministers said that they should not make lame excuses as it was under their power to stop outside interference and take steps to block interference. They said they were full empowered, like any corporate sector entity to make and implement decisions as the board was responsible for the performance of the company.
