March 25, 2006	Saturday	Safar 24, 1427

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ISLAMABAD, March 24: The government has decided to complete transformation of Wapda into 12 fully independent companies before June 2006 and start privatising them one by one.

Sources said the government had appointed two senior advisors in the ministry of water and power to work out the technical and financial modalities of the 12 independent companies in consultation with the ministries of water and power and finance and Wapda.

The sources said Shahid Mehmood, a former federal government officer, and Manzoor Sheikh, a former member Wapda, had been appointed as advisers to complete the privatising process of Wapda.

Two entities of Wapda — Faisalabad Electric Supply Company (Fesco) and Jamshoro Power Generation Company — are already in the advance stage of privatisation. The Nepra has already approved a multi-year tariff for Fesco up to 2009 to facilitate its privatisation on the pattern of the Karachi Electric Supply Company.

The two advisors would help the government prepare a package on how to bridge a wide tariff difference among nine distribution companies of Wapda that has so far hampered the announcement of separate tariffs for each company.

Purely on a cost of service basis, the power tariff in Quetta, Hyderabad, Peshawar and Multan would be much higher, owing to their high losses, than in Islamabad, Lahore, Gujranwala and Faisalabad, which is politically difficult for the government.

The advisers would also identify and determine the assets and liabilities of various companies of Wapda that has been one of the core hindrances to the privatisation of Wapda. The assets and liabilities of these companies have been segregated in papers but both technically and physically they have to be separated from each other so as to lead to formal approval by the foreign lenders to transfer loans from Wapda to individual companies.

About Rs200 billion worth of loans from the international lenders are payable by the Wapda that are being transferred to individual companies. Since, Wapda loans are guaranteed by the federal government, the lenders are also interested in knowing as to how this guarantee would transfer to the individual companies, particularly when they have been privatized.

The transfer of title in terms of assets, loans and listing of shares of the Wapda companies at the stock market in the next few months would be a major step towards completion of the corporatisation process and lead to formal privatisation of their shares to the private sector.