ISLAMABAD, Feb 27: The federal cabinet on Wednesday approved the financial restructuring of the Karachi Electric Supply Corporation that would convert the government guaranteed debt of about Rs90 billion into equity.

The decision will help find out viable and attractive offers to privatize the KESC which is currently incurring losses to the tune of Rs50 million daily.

The cabinet meeting, which was presided over by President Pervez Musharraf, also approved the privatization plan for KESC, including the sale of up to 74 per cent of shares to an investor who would be obligated to finance investments and losses in early years.

The cabinet told that privatization of KESC was expected to eliminate fiscal haemorrhaging, reduce power outages and voltage fluctuations and improve customer service and billings, while ensuring that tariffs would also go down in real terms.

The cabinet also approved the promulgation of the Oil and Gas Regulatory Authority (OGRA) Ordinance, which would enable the development of a comprehensive regulatory framework for the petroleum sector.

The ordinance covers all aspects of the transmission, distribution and sale of natural gas, transportation, refining, and marketing of oil, and the production and transport of LPG, LNG and CNG.

With a view to ensuring continuity and separation of the policy and regulatory functions after its establishment, the OGRA will be placed under the administrative control of the Cabinet Division.

The President also directed the ministers to ensure implementation of the decisions, taken by the cabinet within the prescribed time-frame in letter and spirit.

He said issues should be addressed promptly and bottlenecks in implementation should be brought to his immediate notice for decision and resolution. The implementation status of the decisions, the president said, would be monitored by the cabinet every week.

The President also directed the finance ministry to help the provinces in getting out of the debt trap. The provinces, he said, could only undertake development projects and plans for socio-economic uplift of the masses if they were financially strong and had fewer liabilities.

He directed the ministry of finance to ensure access to required funding by the district governments so that the devolution of power at the district level was implemented effectively through undertaking of projects. Financial autonomy at the district level must be ensured, he added.

While taking stock of the performance of different sectors, the President emphasized the need for improving the investment climate which would generate economic activity and enhance employment opportunities besides increasing the national income.