LEJA organizes discussions on energy reforms
LAHORE: Former Managing Director of Pakistan Electric Power Company (Pepco) Tahir Basharat Cheema has said that it was necessary to form an advisory committee of the power sector in the style of the Economic Advisory Committee for policy making and consultation so that the problems of the power sector could be resolved.
Cheema believed that there were still issues in the IPPs’ agreements while the government was not providing any kind of financing to the sector and the sector was being asked to run its affairs on its own.
He was speaking at a discussion session on ‘Energy Reforms – Increase in cost of doing business’ whereas the session was organized by the Lahore Economic Journalist Association (LEJA) here on Thursday at the Lahore Chambers of Commerce and Industry (LCCI).
The session was attended by a number of journalists including LCCI President Mian Nauman Kabir, former Federal Secretary for Energy Division Irfan Ali.
Cheema revealed that of all the power supply companies, Lahore Electric Supply Company (LESCO) had the highest rate of line losses and the units of the said company worth RS 2.7 billion were being stolen.
“Overall default money of the power sector is RS 1.6 trillion out of which RS 1 trillion is due on private sector and RS 600 billion on the public sector,” he added and said that the privatization of the power sector not possible even in the next one and half decade as no government has political capacity of took this huge responsibility.
Speaking to the session the former federal secretary said that appointment of experts with vested interests and conflict of interests while ignoring the fit and proper criteria in the name of power sector reforms was causing further increase in the energy cost which resulted in increase in cost of doing business.
“The concept of Boards in the energy sector was introduced to improve the working of the power sector by formulation of policies which improve the efficiencies and bringing down power generation and distribution cost was marred with the appointment of non-practitioner and political interest appointees. This has increased the cost of the distribution companies (DISCOS), rather than reducing the energy cost of the consumers,” Ali said.
He added that during the last three years the appointees in these Boards in the name of reforms managed to increase their meeting attending fee to three times which increased the expenses of the DISCOS.
“But not a single reform is happening so far. Further, the privatization of the power sector is impossible in the existence of a uniform tariff. The government has notified a uniform power tariff for all DISCOS irrespective of efficiencies and inefficiencies of different companies.
During my two years tenure as secretary of the power division, the massive campaign against power theft was launched across the country which resulted in an increase in additional revenue collection which was nearly RS 260 billion,” former secretary said.
He further mentioned that the International Monetary Fund (IMF) has pressured the government to dismiss the power sector subsidy on the life line consumers which was averted during his tenure.
“However, power tariff is adversely affected by the rupee devaluation and consumers are suffering,” he added.
