ISLAMABAD, Oct 25: The World Bank has expressed serious dissatisfaction over the financial position of both the Wapda and the KESC, doubted analytical and regulatory capabilities of the Nepra and feared “great risks” of more money injections unless power tariff increased further.

In its latest report prepared this month, the World Bank expressed serious concern over the performance of National Electric Power Regulatory Authority due to which “regulatory uncertainty remains high” in Pakistan.

The report has been prepared by a WB energy sector mission that was in Pakistan last month but had to cut short its deliberations in the wake of US attack on Afghanistan.

The Nepra objection to write off Rs36 billion public sector and provincial electricity dues by Wapda has also come under sharp criticism.

This is for the first time the bank has criticised Pakistan’s power sector regulator for delays in the reforms and corporatization process including distribution and generation licences to Wapda’s corporate companies.

The World Bank has already put on hold a $350 million power sector loan that is part of an overall $1 billion reforms programme co-financed by Asian Development Bank and other financiers due to delays in completion of reforms as agreed under the policy matrix.

The bank has forecast further disruption in Nepra’s work in view of departure of its ADB-financed advisors from Pakistan in the post-Sept 11 situation. “Some disruption in the work is now expected, since the expatriate advisors have evacuated from Pakistan,” said the report.

The bank agreed with Nepra that it should protect consumer interests and should not reward inefficiencies of power utilities — Wapda and KESC —, it nevertheless called for creating a balance between the interests of consumers and electric industry.

In an indirect message for tariff increase, the report said: “Nepra should also protect the interests of the shareholders of the electric industry — private and public — and ensure that the industry will be creditworthy and capable of raising funds in the capital market.”

Casting doubts on the analytical capabilities of the regulator, the report said: “Nepra’s expectations on how quick efficiency can be improved may not have always been realistic.” There are still considerable gaps in the regulatory framework.

Referring to tariff determination by Nepra in June, the WB report said: “The Nepra did not appear to accept the settlement reached between Wapda and the provinces to correct over-billing, resulting in a substantial write-off of arrears. Such a decision seems to be in line with sound electric utility practices.”