17% power tariff raise plan under IMF pressure: PM expresses reservations

[Naveed Yaseen]

MUSHTAQ GHUMMAN
ISLAMABAD (June 17 2009): Prime Minister Yousaf Raza Gilani on Tuesday expressed reservations about the plan to increase power tariff by 17 percent across the board under the Letter of Intent (LoI) signed with the International Monetary Fund (IMF) until people were provided electricity, sources told Business Recorder.

He gave this reaction while presiding over a meeting in the Ministry of Water and Power as part of his plan to visit every Ministry to understand their working and give them guidelines for future. "Do you think that raise in power tariff is justified when there is no electricity in the country," sources quoted the Prime Minister as questioning the top brass of Water and Power Ministry.

The government of North-West Frontier Province (NWFP) has already termed the upcoming increase in power tariff as anti-business, anti-people and an attempt to cover the incompetence of Pakistan Electric Power Company (Pepco). Sources said that the Prime Minister also sought a couple of clarifications from officials.

"We are writing a letter to the Finance Ministry, which signed the LoI with IMF, for seeking exemption from the condition of increase in tariff in the present circumstances," sources added. It is pertinent to mention here that National Electric Power Regulatory Authority (Nepra) is near finalisation of tariff determinations filed by the power distributions companies (discos).

Besides others, the meeting was attended by the Minister for Water and Power, Pervez Ashraf, Secretary, Water and Power Shahid Rafi and Managing Director of Private Power Infrastructure Board (PPIB) Fayyaz Elahi. Journalists from print and electronic media and cameramen, who waited for hours for the Prime Minister's arrival at the reception of Block A of Pakistan Secretariat, boycotted the event en bloc for the inordinate delay in the arrival of the Prime Minister.

According to sources, the Prime Minister was requested to allow deduction at source from funds allocated to the provinces, especially Sindh, NWFP and Balochistan. Secretary, Water and Power said that the decision taken by the Economic Co-ordination Committee (ECC) of the Cabinet was to allow deduction at source when 75 percent bills are reconciled.

Sources said that when the Water and Power Ministry officials tried to shift the responsibility of all wrongdoings to the previous government, the Prime Minister reacted sharply stating: "Please, do not accuse the previous decision makers now; you are in the government for the last 15 months. Judge your own performance and plan for future projects".

The issue of inter-circular debt did not come under discussion, as the government has already earmarked Rs 126 billion in the federal budget 2009-10 for this purpose, claimed one of the officials. However, another official stated that the issue did come under discussion. Sources said that the Minister for Water and Power expressed resolve to do away with power shortage by the end of this year, with the good news that three more power projects would be inaugurated by the Prime Minister himself.

According to an official statement, the Prime Minister said, "Fast track IPPs, however, would help in addressing the energy shortage in the short term, but the Ministry must focus on developing indigenous energy resources like coal, hydro and wind, which the country has in abundance and if these resources are developed, this can secure cheap energy supplies for the next 100 years.

He said that indigenous fuel-based power generation projects need to be fast-tracked to effectively confront the challenges of energy shortage. Lauding the crash program in the power sector undertaken by the Ministry of Water & Power to overcome the power deficit of 3060 MW, the Prime Minister expressed hope that the ministry would fulfil its commitment to end load shedding in the country by the end of 2009.

The Prime Minister added that elimination of wastage and inefficiencies within energy production and distribution system was a must, and the Ministry should invest in system upgradation to bring energy losses in line with internationally accepted levels by developing a viable investment plan.

He emphasised the need to focus on promotion of energy conservation measures, and called for the formulation of a realistic conservation plan in consultation with all stakeholders to save 20-25 percent energy, thus saving foreign exchange, which is being spent on account of imports.

The Prime Minister said that service providers need to be made more efficient and client-responsive in order to achieve commercial viability and reduce the present reliance on heavy subsidies which are directly as well as indirectly being paid by the taxpayers and the Ministry should focus on this aspect as well. He said that transparency and merit should be the criteria and should be observed at all levels while making appointments.

http://www.brecorder.com/index.php?id=924964