Wapda, KESC fail to achieve targets despite Rs55bn help
By Our Staff Reporter
ISLAMABAD, Aug 24: The two power utilities — Wapda and KESC — have failed to achieve their performance targets on all major counts despite injections of around Rs55 billion during fiscal 2002-03.
These targets had previously been agreed with the International Monetary Fund (IMF) under the revised improvement plans.
According to data released by the finance ministry on Sunday, line losses, cash shortfalls and financial losses of the two utilities have increased instead of going down.
The government had secured a one-time waiver from the IMF on non-fulfilment of power sector performance targets and had signed a revised financial improvement plan (FIP) in May 2003. It has, however, once again failed to meet even the revised targets.
Official documents suggest that average transmission and dispatch (T&D) losses of Wapda for the year 2002-03 are 2.4 per cent higher than its original FIP targets and 0.9 per cent higher than the revised FIP targets. In the fourth quarter, the T&D losses were more than the original target by 4.6 per cent.
Wapda’s receipts are Rs9.67 billion more than the financial projections under the revised FIP. This increase is due to the budgetary support of Rs11.6 billion. If this amount is adjusted, then there is a decrease in receipts by Rs1.927 billion.
Cash flow of Wapda was Rs22.948 billion less than the revised FIP projections. This decrease was mainly due to non-payment of Rs20.7 billion debt service liability (DSL) towards the government, Rs370 million decrease in self-financed development expenditure and Rs11.792 billion other cash outflows adjusted by Rs9.497 billion increase in fuel and power purchase costs.
The financing gap of Wapda has reduced by Rs33 billion mainly because of Rs32.3 billion budgetary support including Rs20.7 billion and Rs11.6 billion cash payment of subsidy.
The utility has, however, been able to reduce its payables to fuel and power suppliers from Rs14.571 billion as projected in the original FIP to Rs6.406 billion which is equal to its revised FIP targets.
In the case of KESC, the net after-tax loss during the fourth quarter increased by Rs928 million over target figures. The increase in loss was mainly due to increase in T&D losses by 2.2 per cent over the target losses.
The T&D losses of 43.2 per cent during the same period were reflection of further increases of two per cent over the level of 41.2 per cent in the third quarter. Less than the committed supply of gas also contributed to higher fuel and power purchase costs.
The KESC receipts were more than the target fixed for the fourth quarter. This was due to payment of subsidy by the government for adjustment of additional surcharge against GST in respect of protected consumer categories.
The financial performance of KESC viz-a-viz its financial and operational targets for fiscal 2003 indicates a decrease in receipts by Rs1.618 billion, an increase in payment by Rs471 million and increase in shortfall by Rs2.089 billion over and above the target shortfall of Rs13.481 billion. Total shortfall for the year was Rs15.570 billion. The government provided a budget support of Rs16.381 billion. The change in cash was, therefore, positive.
