November 20, 2001	Tuesday	Ramazan 4, 1422

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ISLAMABAD, Nov 19: A high level meeting will be held here on Nov 29 to discuss the performance of the KESC and Wapda and finalize a plan for their early privatization.

Chairman Wapda Lt-Gen Zulfikar Ali Khan met Finance Minister Shaukat Aziz here on Monday and discussed with him Wapda’s affairs to further streamline its activities.

Official sources later said that the meeting discussed the performance of both Wapda and the KESC and it was decided to draw a privatization plan at the Nov 29 meeting to be presided over by the finance minister.

The ministry of finance has received the report of M/s Price Waterhouse, the financial adviser of the KESC, about the privatization of the organization.

The sources said the Wapda chairman informed the minister that except for Balochistan and Federally Administered Tribal Area, most of the subsidies had been withdrawn in order to increase the revenue of the organization.

Lt-Gen Zulfikar informed the finance minister there had been a marked improvement in Wapda’s performance as its revenue had increased from Rs97 billion of 1997-98 to Rs176 billion in 2000-2001. Similarly, cash flow has improved from Rs84 billion to Rs124 billion and line losses reduced from 42 per cent to 25 per cent.

They sources said the finance minister assured the chairman that the government and semi-government departments would be asked to pay Wapda’s dues as quickly as possible. In many cases, he said, inter-government receivables of Wapda would be realized through direct deduction.

According to an Asian Development Bank’s report as of June 2000, the total arrears of the government and private customers owning to Wapda amounted to $562 million and $483 million respectively. This forced Wapda to default on its debt service liability to the government, and its loan arrears amounting to $700 million were converted into equity during 1999-2000.

Although Wapda is current on all fuel and debt service obligations, its substantial arrears from the public sector are a formidable obstacle for restoration of financial soundness.

The receivable arrears of the KESC from private consumers amounting to roughly $300m have been a major cause of its liquidity problem. It has been unable to service its payment obligations to fuel suppliers even after a comprehensive debt restructuring in 1998. As a result, KESC’s payable arrears as of June 2000 amounted to $379m comprising fuel and power purchase arrears of $308m and loan arrears of $71 million.