National Assembly Special Committee on Energy Crisis on Tuesday warned that the lethargic attitude of Ministry of Water and Power (MOWP) in resolving the power tariff differential of Rs3.29 per kWh could further deteriorate the economic conditions of the country.
The committee was held under the chairmanship of Usman Khan Taraki. Only three members of the committee out of total 17 attended the meeting. Bushra Gohar of ANP, Shahid Khaqan Abbasi of PML-N and Rana Farooq Saeed Khan of PPPP attended the meeting. While Muhammad Jadam Mangrio of PPPP left soon after the meeting started.
The members kept asking MOWP to give amount of loss due to theft alone. However, it could not give even an estimated figure which forced the committee to ask DISCO representatives to give their estimated theft figure. Their estimates projected 2.46 million units loss in theft during the first six months of the current fiscal year. The estimate for whole year was 5,000 million kWh or Rs38 billion. The committee noted with concern that the power distribution companies (DISCOs) were unable to collect Rs63 billion in bills during the last fiscal year.
Shahid Khaqan Abbasi noted with concern that the system needed immediate radical changes otherwise it would drive down the country. The minister for Water and Power Syed Naveed Qamar also agreed that if the system was not improved the baggage of the government would increase. Abassi proposed that instead of subsidising the first 300 units of all consumers, the higher tariff slabs should be applied from the start. Chairman NEPRA also supported the idea of one tariff slab by doing away subsidised tariff.
Abbasi had said at the outset that he was not satisfied with the working of the committee as MOWP was not been able to define the problem. He said the ministry had not come up with facts to ascertain whether it was a management, financial, or capacity crisis. “Under the present circumstances, the government has no solution till 2015”, he added.
Noting with concern, Bushra Gohar said the government has large army of departments and human resource but lacks will to end inefficiency, mismanagement and corruption in the system. She said there appears to be no commitment and plan from the government to resolve the crisis.
Secretary Water and Power Imtiaz Kazi proposed that the officials and some members of the committee could sit together to draft final recommendations of the committee. However, Chairman Taraki ruled out the move and said that the committee would finalise recommendations after open hearing.
Abbasi noted that MOWP had not come up with answers of even simple queries of the committee. “How could a ministry that has not even got simple basic numbers guide its minister and the prime minister? He wondered. In reply, Secretary Kazi said basically the difference in sale and purchase price was the issue for which a number of steps were being taken to eliminate the crisis. The minister stressed induction of professional management as he said even the parliamentarians too were influencing posting and transfers in DISCOs. Every MNA wants to have his own XEN and SDO in his constituency. However, Abassi took exception on his remarks, on which the minister said that he meant that the system was not being run on merit.
Chairman National Electric Power Regulatory Authority (NEPRA) Khalid Saeed informed the committee that the determined average sale tariff was Rs11.07 per kWh for the current fiscal year, while the government’s notified tariff was Rs7.78 per unit. He said there was a differential of Rs3.29 per kWh. Last fiscal year NEPRA had determined an average tariff of Rs9.58 per unit, while notified tariff was Rs7.78 per unit with a differential of Rs1.80 per kWh.
Chief Operation Officer of Central Power Purchasing Agency (CPPA) Arshad Raza informed the committee that National Transmission and Despatch Company (NTDC) purchased in total 90,481 million kWh (MkWh) at a cost of Rs639.6 billion on average rate of Rs7.07 per kWh last fiscal year. He said they sold 87,782 MkWh and the billed amount was Rs659.06 billion at an average of Rs7.51 per kWh to DISCOs and KESC.
Abbasi asked what the transmission losses of NTDC were. Raza said it was only three per cent last year as against NEPRA’s allowed limit of 2.5 per cent. The total loss of three per cent converts to Rs18 billion per annum. Mere half a percentage point loss than the target limit caused a loss of Rs3 billion to the entity. MD NTDC Rasul Khan Mehsud said that previously there was no metering at NTDC but after the installation of meters the losses were in the range of 3.5 to 3.8 per cent per annum. Chairman NEPRA said they have raised some specific queries and on appropriate reply from NTDC the regulator will help accommodate their genuine losses.
Raza said DISCOs transmission losses on average were 19 per cent against the allowed limit of 16 per cent during the first half of the current fiscal year. Chairman NEPRA asked the committee to seek yearly comparison as six monthly figures could be misleading, as DISCOs have never come up to the mark. Abbasi said the transmission losses figure apparently didn’t prove that theft was a major issue. However, the minister said theft was a major issue along with other problems. He said changes in management were required to insulate it from outside influences.
Chairman NEPRA said other than IESCO, GEPCO, FESCO and LESCO all other DISCOs were faced with massive losses. He said the regulator has allowed higher transmission losses to DISCOs to avoid their bankruptcy. However, he said the consumers could not be penalised for the government inefficiency.
He said for KESC they were reducing the line losses by two per cent and it was a performance based system which could be implemented for other DISCOs. He said the line losses and theft was a major issue that was the heart of the problem.
He said PESCO, HESCO, SEPCO, MEPCO and QESCO were billing for only 65 percent of the total electricity supplied and the matters were further compounded when they managed to collect only 60 percent of the billed amount.
