The Water and Power Ministry has sought powers to make changes in the board of directors (BoD) of power distribution companies (DISCOs), as non professionals were said to be obstructing the power sector reforms, Pakistan Today has learnt.
Sources said that BoDs were nominated by the Planning Commission and finance ministry without consulting the water and power ministry and now their failure was being attributed to the ministry. They said that ownership of power sector reforms must be given to the ministry otherwise it was bound to fail. Sources said that removal of non professionals from BoDs will help improve their performance even though the finance ministry and Planning Commission were still seeking more time for incumbent BoDs.
They said that BoDs were even defying government directives, as only three boards had met the deadline to nominate a panel of candidates for appointing CEOs and the rest of the boards were not even bothered yet. The government had sought panels by October last year so that the new management could be in place by beginning of this year. The ministry had referred the panel of three DISCOs to the Cabinet Committee on Restructuring while the remaining six had to finalise their lists yet.
Last year, the government had inducted private sector professionals in boards with the objective to improve DISCOs. Their performance had not improved even though the boards had complete powers under the Companies Ordinance 1984. The boards were introduced to bring corporate governance by effective monitoring of management and accountability. Their task was to optimise operational and financial efficiency, streamlines business processes to improve the company’s profitability and access to outside capital. The directors were responsible to devise policy, business practices, approve plans and budgets, establishment of adequate and sound internal controls, transparent financial statements, maintenance of proper records, accounting policies and safeguarding company’s assets. The ministry had sent a list of 89 key performance indicators (KPI) to boards for immediateimplementation, after noticing that they were not performing their tasks professionally. Instead of policy making, the boards in certain cases, were involved in micro-managing the issues, which was the company management’s prerogative. “The ministry is not satisfied with their working, as already international financial institutions are expressing concern on the slow implementation of power sector reforms”, source said. The boards were directed to make a policy on receivables of three categories of defaulters, including current, permanent and disconnected. It should be handed over to the company management for implementation and monitored on a regular basis. Similarly, they were directed to make a policy on reducing system losses and resultant theft. Boards were asked to collect data about customer complaints, including nature of the complaint, magnitude, redressal time and fatal accidents. They had not compiled any data since last year.
Sources said that the management of DISCOs was opposed to appointment of new CEOs and CFOs. They were pushing the lower cadres to protest against the reform plans. The boards had failed to address the issue despite their duty to improve the company’s working.
