November 3, 2003	Monday	Ramazan 7, 1424

My last article outlined eight areas of Wapda operations, which would need to be tackled by any management worth it’s salt, in case the much criticised utility desires to come out of its present morass.

Incidentally, but intentionally all these areas basically pertained to re-habilitation of Wapda’s human resource and as less than two points remained, where a new direction was sought in the basic body politic of the Authority.

This too, however, remained a specific issue whereby errant managements could be estopped from mauling the existing, prior to 1997 meticulously built-up, structure of Wapda and a resolve to ensure that future managers may not mismanage or mal-administer the organization. This resolve attains greater importance when we consider the hundreds of the billions lost during half a decade between 1998- 2003. Alongside is the resolve to put to an end the perennial figure-fudging sustaining the present management and the strange but eerie acceptance by the powers that be. The second part of the series (hopefully) would focus on only one aspect. This would be the blueprint for increasing Wapda’s nearly fledging revenue receipts -the same which the present management propagates as something of an achievement.

The fact remains that Wapda’s revenue of Rs123.00 billion for 1998-99 has only increased to Rs169.00 billion for FY 2002-03 - a mere 37 per cent increase. This is against the 51 per cent increase in tariff and a 19 per cent increase in demand during the same period. As a consequence, we see that in fact revenue receipts have dropped during the last five years and remain amongst the main reasons for the ongoing debacle. What would a professional management do? How would it strive to improve upon these figures? It would first of all separate this issue into two clear divisions. The first would be the commercial angle to the problem, the second being the purely technical. Strangely, we see that the losses on account of simple commercial lapses out-strip the technicalities. As such we would first look into the commercial inadequacies.

Starting from the application for an electricity connection to the bills being dispatched to and received by the presently much harried customer, we see that the applications being made are at best perfunctory and contain inherently false information. The chance for correct information being ever provided simply vanished when the most necessary test report was simply considered unnecessary and done away with,considering this as a help to the customers and an effort to reduce red tape. One has to find a more damaging decision in the history of electricity operations in Pakistan.

Little knowledge indeed is dangerous. Misuse of this requirement contributes to as much as up to Rs5 billion each year, besides the millions likely to be saved in the shape of extended lives for the electrical equipment. With the availability of a proper mechanism and the issuance of true and correct test reports— an attainable goal with Nepra looking after the earlier below mark nearly independent electric inspectorates of the provinces, besides these extended life spans we can also reduce safety hazards and thus save on accidental injury and deaths to Wapda line staff and public men — a sad fact but something very much on the rise since the last five years.

Thus the professional management would not just re-introduce the requirement of the test report, but would also take measures to strengthen this requirement. The issue of huge receivables and Wapda’s inability to reduce upon the same are also considered a part of the present bad state of operations and similar customer discipline. Besides being particular in recovery and an apt use of the recovery tehsildars (presently on R&R before proceeding for greener pastures) and allied staff, enhancement of security deposits up to the two-month billing level is thus considered as the answer. This would be maintained through adding or subtracting to the monthly billing spread over the first twelve months— the only answer to the quest for zero receivables.

The second issue, tackling of which would result in rich dividends, is the at present loss due to incorrect tariff application and less billing through misuse of the tariff. A regular check would be put in place to arrange correct application of tariff in each and every case. This action is expected to result in addition of at least Rs1 to 2 billion to Wapda’s revenue each month. With this would be an upgraded meter reading programme— also leading to buttressing of the above extra revenue. Though it may sound a little farfetched and surely impossible if we go by the present management’s mindset, a very serious effort needs to be undertaken to reduce the present exorbitant electricity rates— a goal not beyond reach.

The third important area of leakage and revenue loss is at present the stunted billing against the public sector. According to rough estimate as much as Rs5 to 10 billion is lost here. The new management would have to focus on this sector and its billing and do away with the wrong assumption of over-billing here. Available statistics suggest that certain areas of the public sector are most notorious and contribute as much as 50 per cent to the whole loss, this being the residential colonies attached to various governmental institutions. In this regards, it is also pertinent to suggest that the plan to correct things can easily be worked out on paper through a simple comparison of consumption, load requirements and the bills being eventually paid by the various departments.

The fourth work to be undertaken is to conduct an immediate customer survey for seeking the latest information/data about the various facets governing usage/subsequent billings. This, incidentally, remains a mega-issue and thus would need to be tackled as such but surely has the potential of adding in billions to the presently fledging revenue of the utility. The solution to the resolution of this issue, however, needs separate space, but one can very well imagine the poverty and paucity of a utility which does not possess up-to-mark data of its customers. The fifth important step would be taking-up immediate upgrading of the Wapda’s revenue offices and an effort to truly implement the most up-to-mark commercial procedure formulated as far back as 1979 by the World Bank.

In addition, the local audit parties working in these offices also need to be made to operate in accordance with the laid down rules. All this, as per experts, is sure to net another Rs5-10 billion each year— indeed a colossal amount. Concurrently, Wapda needs to be in constant liaison with the government audit instead of the present animosity and efforts to remain at daggers drawn.

Thereafter would be the formulation and introduction of innovative tariffs, enabling Wapda to attract more consumption and as a consequence be able to utilize the 1000 to 3000 MW of spare power - especially during the peak hours. This would also help in an even-out of the high cost of the IPP purchases. Much can be written about this scheme of things, but implementation squarely depends upon the will of the management and nothing else. It would be interesting to see that no effort at all has been undertaken during the last five years to ever come up with anything new or innovative, but for an effort to forcibly thrust a two-part tariff for the general (domestic and commercial) customers— probably pending with NEPRA and likely to emerge one day to the chagrin of all. This proposal has all the bureaucratic hallmark about it and in the end customers would be forced to pay for the shenanigans of Wapda. This would also add to the already very high electricity tariff.

As a seventh pre-requisite, the incoming management would have to study, comprehend, arrange and then introduce special metering packages through calling for and requiring up-to-mark manufacturers to set-up pilot project. Here wide publicity would have to be given in order to attract the very best. However, between the pilot projects and actual ground use of special packages the least possible time periods need to be expended. This is all the more so because the last decade or so and specially the last five years have been a wastage. On the eight rung would come the setting-up of marketing and sales offices in the distribution companies; but in the absence of innovative tariffs, nothing much can be achieved here.

Within this effort would lay the answer to the trend for self-generation by bigger industrial units / groups. In this regards the recent decision by the government to allow EPZs to have their own power generation should act as a wake-up call for Wapda. Though self- generation cannot be appreciated, as in a way it all amounts to going back half a century, but this essentially remains an indictment of Wapda and the KESC and their orphan electricity operations.

Thereafter would be the need to utilize the existing staff on imperative jobs, while normal maintenance and even chores like meter- reading should be got done through contracts. Here necessary checks can be implemented through provision and installation of check- metering at the distribution sub-stations. As a consequence, the contractor would be made responsible for 100 per cent true sales in his area of operations. All this can subsequently act as an impetus for a smooth transition to privatization.

Help in setting up co-operatives in villages, mohallas and even small towns is another facet of the commercial requirements being faced by Wapda in pursuit of the goal to inhibit illegal abstraction (theft) of energy. The utility thus needs to liaise with the various cooperative departments at the federal and the provincial levels. A little effort here would result in lesser theft— leading to some reduction in the present 26 per cent or so of the line losses and in a situation where each cent converts into as much as Rs2 billion per year.

With the implementation of the above ten,imperative operations, Wapda should be able to come out of the present sticky situation and then start making profit. All this would also enable Wapda to become more adaptive to cope with the current changes and the newer requirements of the times. Here a word of caution is most apt- the technical staff has to be given preference other-wise the earlier lopsided working would never change.