As periods of power load-shedding lengthens, suspending supplies for up to 12 hours a day in major cities even before summer has set in, the government reached the conclusion that the power sector cannot be refurbished without changing the basic structure of the Water and Power Development Authority.
Although late by at least five years, the first step after the departure of the federal cabinet was to partially revert to the old system of a central command to take over WAPDA’s 16 corporate power companies strengthening the chairperson’s authority. There are 10 companies in distribution and three in generation and transmission of electricity. WAPDA was split by Nawaz Sharif government under a World Bank ‘corporate plan’ in 1998. The first step towards “unbundling” the utility was taken in 2005. The plan was opposed tooth and nail by the opposition wondering how an organization which was steeped in the evil of corruption and inefficiency could adopt a corporate culture. The fear that WAPDA’s division would lead to a huge energy crisis proved genuine because the amount of the circular debt alone rose to a whooping Rs136 billion besides a staggering mark-up of Rs15 billion early in January 2013. In a way, the pre-1990 has been restored and this step in the right direction will go a long way in mitigating the country’s energy crisis.
As things stand now, not only the ‘corporate plan’ seems scrapped but WAPDA’s privatization as well, the ultimate goal of the plan, has suffered apparently an irretrievable setback. This must make its employees happy as they have long been demanding the roll back of the corporate-ization process. WAPDA itself never made its peace with this move and having resisted the reforms all along, has maintained a steady drumbeat of opposition to the ominous unbundling programme.
What lies ahead is the remedy and that in the shortest possible period because power load-shedding has already has heavy impact on the national life. According to conservative estimate, a day without electricity eats up on an average about one billion rupees of the national economy. The shortest possible way out, without a penny being spent, is to bring down the system and line losses substantially.
This loss leads to the wastage of power up to a huge 35 per cent while the overall shortfall is one-third of power generated. What the authority will need to do is to give tasks to its transmission and supply companies to gear up their efforts to minimize losses.
The task may seem easy but given the fact that corruption has permeated in supply companies in addition to power thefts and a host of other irregularities, it may become an intricate assignment in the end. But it must be kept in mind, and matching steps taken, that this is the only short-term solution available.
Friday, March 22, 2013
Pakistan : Power sector restructuring
As periods of power load-shedding lengthens, suspending supplies for up to 12 hours a day in major cities even before summer has set in, the government reached the conclusion that the power sector cannot be refurbished without changing the basic structure of the Water and Power Development Authority.
Although late by at least five years, the first step after the departure of the federal cabinet was to partially revert to the old system of a central command to take over WAPDA’s 16 corporate power companies strengthening the chairperson’s authority. There are 10 companies in distribution and three in generation and transmission of electricity. WAPDA was split by Nawaz Sharif government under a World Bank ‘corporate plan’ in 1998. The first step towards “unbundling” the utility was taken in 2005. The plan was opposed tooth and nail by the opposition wondering how an organization which was steeped in the evil of corruption and inefficiency could adopt a corporate culture. The fear that WAPDA’s division would lead to a huge energy crisis proved genuine because the amount of the circular debt alone rose to a whooping Rs136 billion besides a staggering mark-up of Rs15 billion early in January 2013. In a way, the pre-1990 has been restored and this step in the right direction will go a long way in mitigating the country’s energy crisis.
As things stand now, not only the ‘corporate plan’ seems scrapped but WAPDA’s privatization as well, the ultimate goal of the plan, has suffered apparently an irretrievable setback. This must make its employees happy as they have long been demanding the roll back of the corporate-ization process. WAPDA itself never made its peace with this move and having resisted the reforms all along, has maintained a steady drumbeat of opposition to the ominous unbundling programme.
What lies ahead is the remedy and that in the shortest possible period because power load-shedding has already has heavy impact on the national life. According to conservative estimate, a day without electricity eats up on an average about one billion rupees of the national economy. The shortest possible way out, without a penny being spent, is to bring down the system and line losses substantially.
This loss leads to the wastage of power up to a huge 35 per cent while the overall shortfall is one-third of power generated. What the authority will need to do is to give tasks to its transmission and supply companies to gear up their efforts to minimize losses.
The task may seem easy but given the fact that corruption has permeated in supply companies in addition to power thefts and a host of other irregularities, it may become an intricate assignment in the end. But it must be kept in mind, and matching steps taken, that this is the only short-term solution available.
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