ISLAMABAD, Jan 30: The World Bank is concerned over federal government's move to redefine the role of the National Electric Power Regulatory Authority (Nepra) through a five-member committee
represented by the agencies which are under the regulatory domain of Nepra, it is learnt.
A World Bank mission has especially arranged a meeting with the top brass of Nepra on Feb 1, to discuss its tariff determination and related issues, although it was originally not on its agenda, informed sources told Dawn here on Sunday.
"This is strange that an agency to be regulated has been assigned the job of regulating the regulator itself, which is not only unconstitutional and illegal, but a clear indication of regulatory capture," said a government official.
Last week, Prime Minister Shaukat Aziz has constituted a five-member committee to examine and redefine the role of Nepra to make it investor-friendly, overruling the objections of the cabinet division.
The ministry of water and power and its allied departments, Wapda and Private Power and Infrastructure Board (PPIB), have three members on the committee while Nepra and the finance ministry have one member each. "Practically, this is three versus one," the official said.
The committee led by Minister for Water and Power Liaqat Ali Jatoi, comprises chairmen of Nepra and Wapda, managing director Private Power and Infrastructure Board (PPIB) and a representative of the finance ministry.
The committee, under an earlier notification, was headed by the minister for privatisation and investment and comprised secretary water and power, chairmen of Wapda and Nepra and an official of the finance ministry.
But the notification was withdrawn within a few days and replaced with a new one, making the minister for water and power its head and giving two more members to the power ministry i.e., Wapda and the PPIB.
The sources said the Nepra was a product of the Council of Common Interest (CCI) set up through an act of parliament in 1997, and its members are nominated by the four provinces. Any change in its role could be made by parliament or by the CCI or by a parliamentary committee or a committee set up by the CCI which is represented by the four provinces.
The sources said the primary role of Nepra was to balance interests of all the stakeholders, the government, investors and consumers, but if its powers were curtailed to the benefit of investors, the common consumers would suffer.
The government has not notified for the five months tariff determinations announced by Nepra for various companies of Wapda, restricting their losses at 15 per cent for recovery from consumers. This involved reductions in tariffs while higher losses were required to be met by the companies themselves or government subsidies.
The sources said the government move to redefine the role of Nepra through a committee, which is heavily tilted in favour of the ministry of water and power, was bound to backfire as it would send negative signals both internally and externally.
This was the third time since 2001, the sources said, that powerful stakeholders had tried regulatory capture of Nepra for their vested interests. In 2001, President General Pervez Musharraf on the complaints of the Wapda chairman had asked the governor State Bank Dr Ishrat Hussain to examine the role of Nepra and resolve its differences with Wapda.
The central bank chief held that Nepra's procedures were correct and in line with powers given under the constitution. Again in 2002, a secretaries committee, comprising five federal secretaries of the economic ministry, had proposed some changes in the Nepra's powers, but the recommendations were shelved when former supreme court judge Justice Saad Saud Jan wrote a dissenting note on legal grounds.
Shaukat Aziz has formed the new body on a series of complaints by the PPIB that the Nepra's rigid stance on various power sector issues was hampering new investments in the country at a time when the country was faced with an estimated power shortage of about 2,000mw. Nepra has denied the charges and is expected to stay away from the committee meetings.
