PEOPLE were relieved when the budget for FY 05-06 did not raise the electricity tariff, although the expected revenue from ‘petroleum developmental levy’ (PDF) showed an increase up to Rs58 billion for the up-coming financial year which was much more in comparison to the figure for the outgoing fiscal.
What does it all translate into? It is a harbinger to more expensive fuel oil for Wapda’s thermal plants and probably also for the common man as he too faces the onslaught of expensive transport and price spiral of commodities of daily use.
Coming to Wapda and the fact that it’s oil bill was Rs14.107 billion for the last fiscal against Rs8.916 billion only for the FY 2003-04 (an increase of 58.2 per cent), we need to understand as to how it is or planning to absorb this increase, specially when it has not been granted any tariff increase since mid 2003 (and in face of a 10 to 58 paisa decrease too as of 1.7. 2004).
For all this, we would delve into the inner minds of the utility’s upper management, the manager generally running the system on ground and the results of the last eighteen months. This would be of interest in face of accusations during 2003 about possible falsification of the balance sheet of the Utility.
Wapda at present, is headed by an experienced corporate man, who besides running a big industrial set up has been the privatization czar for Punjab, its finance minister with additional charge of excise and taxation and also the P&D, the CEO of Corporate and Industrial Restructuring Corporation (CIRC)) and the crowning glory of being the Chairman of the venerable Bank of Punjab too.
This vast experience from the private sector is bolstered by in-service Utility and developmental experience of the two technical members of the Wapda. It all is then further added up by the finance member, who comes by the CBR. The various GMs heading different departments are also experienced and posses not less than thirty five years of direct experience.
The senior management seems to have got together and decided to fish-out Wapda from the stagnation of the period 1999 to late 2003 through an in-house effort which is evident from the end/ final results of the FY 2003-04 and also from the results of the just concluded fiscal.
The results show that the line loss level of 26 per cent for the period ending June 2003 has been brought down to a record low of 24.7 per cent, which translates into a reduction of 1.3 per cent- a stupendous figure considering that load-growth during the last eighteen months sometimes even crossed the 20 per cent level.
All this is even more remarkable when we see that nearly no out-lays were made on infra-structure development for the earlier seven years or so.
As further details would be helpful, we see that as many as seven mega-transmission line projects, at a cost of tens of billions of rupees have been completed during the last eighteen months and as many as thirteen are in various stages of completion. All this is after the drought of many years.
However, Rs90.00 billion ‘system augmentation plan’ (SAP) spread over the coming five years has as yet to make a mark. On the other hand, it is understood that the implementation plans are ready in this regard and the same may start showing results by the end of the current fiscal.
Actually, injection of the Rs15 to 17 billion to the existing transmission and distribution system each year should improve the situations radically.
Besides the ubiquitous losses, there is a need to comprehend the revenue collection which has reached the 95.4 per cent level up from the 93.5 per cent mark of FY 2002-03. This increase of 1.3 per cent in revenue collection is impressive; any-thing above 90 per cent is simply hard to get by.
Collection from private consumers has been near the 100 per cent mark, while receivables did accrue on account of non-payment by the government and specially FATA, which contributed nearly Rs47.5 billion to the total receivables of the Utility at the end of the FY 2004-05.
On the other hand, continuity of supply remains a sore point as the public is facing disruptions. It is besides the point that easy access to heavy load appliances and a blatant loading of the utility’s transmission and distribution system has left it reeling.
In order to understand the quantum of the load growth, it is seen that the peak hours demand of 11,985 MW for June 04 has now reached a level of 12,585 MW, which is a hefty 8.5 per cent more than the compatible figure of the last year.
Whether the growth directly translates into an increased GNP is another story. Could this be comprehended by the power engineers and thereafter converted into an effort to enhance/supplement the decaying infra-structure? This is a question needing not one but quite a few answers.
More insight makes us understand that this level of growth has no parallel and it, probably, is because of consumerism, a very aggressive consumer banking and availability of new found gains for quite a big chunk of the Pakistani population.
According to available figure as many as 500,000 AC units and like number of refrigerator units were imported alone in the just concluded fiscal year and all this, added up to the local production, makes a chill run through the spines of power engineers. When the fans and other appliances are added up to the load one can imagine the load growth.
Wapda’s figures tell us that as many as 23,785 distribution transformers of varying capacities were added to the system along with 8789 km of 11 KV lines and 5088 km of LT lines, but all to nearly no avail. This proves that Wapda did try to provide for normal growth but that probably was not enough.
Actually, something special and particular would have to be done to counter this unprecedented load-growth and then convert it into real time engine of growth for the economy. This is so because no country can afford un-bridled growth, which then does not convert into an addition to the GDP.
Another interesting issue is the once shining air fleet of WAPDA, the Utility’s recent effort to buy an aircraft of 1985 and onwards vintages costing just $0.4 to $0.8million and the ensuing hype created by certain quarters ostensibly on the basis of GOP’s reported subsidy to the tune of Rs27 billion or so. The subsidy is mainly to cater for the social responsibilities of the State and the earlier sale of the air fleet in 1998 was ill-advised and surely a result of infighting between the bureaucracy of the ministry of Water and Power.
Wapda‘s earlier general Chairman reportedly kept on trying to arrange for at least one airplane, but it did not happen. Now the need for the aircraft can be gauged from the fact at least fifty air planes, including jets, are already providing corporate charter in Pakistan. Another twenty or so are also in the pipeline.
In the present times, corporate needs and requirements of mega-departments like Wapda merit modern and quick means of transport. It is also a fact that owning and maintaining an airplane is cheap in comparison to charters in case the use is on a regular and sustained basis.
Wapda’s various projects are far and away and a diligent monitoring can only take place if quick means to reach the site are available. However, it needs to be ensured that airplanes are not misused by un-connected persons.
Another issue that merits attention is the present efficiency of Wapda’s own thermal and hydro power stations and whether the required ‘economic dispatch order’ (EDO) is being maintained in calling for the IPP produce or not.
According to the available data, the thermal units, on the average, are operating at nearly 33 per cent efficiency although some of the machines are 45 years old, the hydro stations have produced more energy per machine in comparison to FY 2002-2003 and the present EDO has led to the capping of the IPP payments to the old level of FY 2002-03- not a mean achievement specially when the graph of such payments was simply rising in the past.
Looking at the water sector, we see that at present as many as 20 mega projects are underway at places thousands of kilometres apart. These are all progressing as scheduled, baring a few hiccups at Mangla Raising where the issue of high rates of fill has since been duly addressed.
An efficient running of Utilities can contribute to the national economy and that Wapda needs to keep its operation on the right track. However, a very strict monitoring and evaluation regime would have to be put in place to ensure positive outcomes. Similarly, cost effective generation, transmission and distribution can ensure an affordable tariff, which in turn can lead to a viable industry and agriculture that is sustainable.
PEOPLE were relieved when the budget for FY 05-06 did not raise the electricity tariff, although the expected revenue from ‘petroleum developmental levy’ (PDF) showed an increase up to Rs58 billion for the up-coming financial year which was much more in comparison to the figure for the outgoing fiscal.
