Nawaz approves hike in power tariff

Prime Minister Nawaz Sharif on Friday gave a nod to phase-wise withdrawal of subsidy for the power sector that would result in Rs 2.50 per unit hike in power tariffs from July 1.

A high-level meeting on energy crisis held at the Prime Minister’s Office took stock of the overall energy situation and examined ways and means to improve it.

It was decided that “tangible measures” both at increasing generation through energy mix and exploring alternative resources would be taken to resolve the energy crisis.

According to sources, the prime minister accorded principle approval to the withdrawal of subsidy on power tariff in phases, adding that lifeline consumers, who used less than 50 units per month, should not be burdened.

He also directed participants that providing special care and maximum relief to the common man must be their top consideration at the time of rationalisation of tariff.

The meeting decided to shift on a new power policy to enable the country seek fresh loans from the International Monetary Fund (IMF), the sources said. Per the conditions of the lender, the government would have to do away with subsidies on the power sector and the approval by the committee was a major step in this regard.

The prime minister also directed the officials of Water and Power Ministry to formulate a new power policy with the enhanced focus on energy mix to effectively reduce the power shortage in the country.

Under the new policy, the focus would be shifted to cheaper sources of power generation, including the use of coal, hydel and gas would be preferred rather than going for thermal power generation which was very costly due to rising prices of furnace oil.

Under the policy shift, the government has also made allocation in the federal budget 2013-14 for four new schemes for conversion of thermal power plants to coal-based under the energy mix formula.

Nawaz also directed that options of long-term energy security must also be examined and practical steps should be taken in this regard taking on board all stakeholders, including provincial governments. The meeting also underlined the need to reduce theft, rationalise tariff and minimise line losses.

The participants were apprised by the energy experts about strategy and implementation of timelines for reduction of load shedding.

The meeting was also informed that new comprehensive energy policy, which included short term, medium term and long term energy plan, would be ready by the end of this month as consultation was currently going on with all stakeholders.

The prime minister directed to take on board the provinces in the consultative process. The meeting was informed that a comprehensive strategy for recovery of dues from the defaulters had also been devised.

It was also revealed that a highly-professional project management office was being established at the Ministry of Water and Power that include a policy and an implementation cell. The project management office shall supervise and review the progress on key policy decision and energy implementation plan, it was decided. It was also decided that the prime minister will review energy situation on a weekly basis.

Nawaz expressed confidence that with dedication, better management and facilitation of energy sector companies, the situation would improve in the near future.

The prime minister also directed to examine possibility of importing energy from neighbouring countries to improve the situation on an immediate basis. He, however, directed that the option of long-term energy security must also be examined and practical steps should be taken in this regard.

Pak-China sign MOU for energy cooperation:

Meanwhile, Pakistan and China signed a Memorandum of Understanding (MoU) for cooperation in fields of energy, mass transit, industrial cities and road sector projects.

The MoU was signed between the Ministry of Water and Power and China-based M/s Norinco International as a company’s delegation headed by its Vice President Wang Yitong, who is currently visiting Pakistan.

Amid presence of Prime Minister Nawaz Sharif, Wang Yitong of M/s Norinco and Anwar Ahmed Khan, the Water and Power secretary, signed the MoU.

According to the MoU, M/S Norinco and the government of Pakistan would pursue cooperation in the fields of mass transit, energy projects specifically solar in different provinces.

The company would also help the host country for setting up industrial cities along motorways, solar irrigation and road sector projects.

The Chinese company would also facilitate financial assistance from Chinese government on a fast track basis. Under terms and conditions of the MoU, Pakistan would utilise financial, technical and managerial expertise of M/s Norinco International in the aforesaid fields and other such sectors which may be identified from time to time with mutual consent of both the parties.