Causing of rise in energy cost highlighted

LAHORE: Appointment of experts with vested and conflict of interests while ignoring the fit and proper criteria in the name of power sector reforms is 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-practitioners and political interest appointees. This has increased the cost of the distribution companies (DISCOS), rather to reduce the energy cost of the consumers.
These views were expressed by the experts including former federal secretary power division Irfan Ali, Former Managing Director PEPCO Tahir Basharat Cheema, President Lahore Chamber of Commerce and Industry (LCCI) Mian Nauman Kabir on a discussion organized by the Lahore Economic Journalist Association (LEJA) on ‘Energy Sector Reforms – Increase in Cost of doing Business’, here on Thursday. The session was convened by LEJA President Muhammad Sudhir Ch.
Irfan Ali speaking on the occasion said 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 come so far. Further, the privatization of power sector is impossible in the uniform tariff existence. The government notified a uniform power tariff for all DISCOS irrespective of efficiencies and inefficiencies of different companies.
Irfan referring his two years tenure as secretary of the power division pointed out that the massive campaign against the power theft was launched across the country which resulted in increase in additional almost Rs 260 billion revenue collection from the previous year. This was made possible only with the political support. Thus, the power theft could be minimized with political support when the elected government decided that it will not back the power theft activities, nor ask the transfer and posting of the officials than it could be controlled.
On energy mix, he pointed out that a demand driven estimate was already prepared during his time from National Transmission and Dispatch Company (NTDC) till 2040 under which the cheapest available energy will be acquired in accordance with the country requirements while no additional energy will be added into the system to avoid any capacity and other charges. However, this mix was changed by NEPRA. He believed that the power sector issues could not be resolved in one night. There is need of concentrated efforts on energy generation, distribution, supporting the line staff and political will as the theft was bringing down during his tenure.
Tahir Basharat Cheema suggested establishment of Power Sector Advisory Committee similar like Economic Advisory Committee (EAC) with a task of policy making and advise on the sector to the government. There are issues in the IPPs contract, while the government is not financing the sector while the sector is asked running own its own. So once the project is completed on investors money, or with loans than the cost of the energy increases. Additionally, the higher invoice of the power station which also approved by the government increasing the energy cost. Further, the consumer is indiscipline. He believed 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.
Responding to a question about appointments in the Board including the Chairman of the NTDC, Naveed Ismail, Cheema said the SECP made a fit and proper criterion for Boards member appointments which should be followed. Those should not fall on the criterion should not be on Board. Further, he pointed out that one former official managed to place 42 of his close aides on the power sector Boards than how the good policy could be made. He believed that the Boards should be worked within their limits and should not took or use the powers of the CEOs.
Irfan Ali commented that Lahore High Court referred it to the Secretary Cabinet Division and hoped that the Division will address it in accordance with the court orders.
Mian Nauman Kabir pointed out that the government ends the stakeholders’ representation on the DISCOS as previously the business community representatives were also on the LESCO Board. However, now the government did not give them representation on Boards. He said the cheap energy and cheap financing were two key components for the economic growth of the country. If the government ensure these two components than nothing can stop the country from progress. He also stressed the need of improving the energy mix by focusing towards the renewable cheaper and environment friendly energy generation.