May 15, 2006	Monday	Rabi-us-Sani 16, 1427

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LAHORE, May 14: Wapda’s entire system of power transmission and distribution is loaded to its capacity, and there is no standby or alternative arrangement to cope with any major power breakdown in the country.

This was revealed by authority’s former member (Power) and the Electric Power Forum vice-chairman Syed Tanvir Husain Naqvi in an interview with Dawn here on Sunday.

He said the present incidence of power failures being reported from different parts of the country, particularly in the big cities, were due to the prevailing over loaded system.

He said all high-voltage (HV) transmission lines and grid stations were over loaded and all power transformers and 11KV and LT distribution system were loaded to their capacity. With the current rise in temperature, the demand for power had increased beyond the available generation capacity of 12,000 megawatts (MW). He said the present load demand was about 12,200MW which meant there was a shortfall of about 200MW, which could increase further with the rising demand. He said many people have started installing air-conditioners at their residences without ensuring whether the required power load was available or not. The overloaded system was also one of the causes of increasing technical power losses, while the increasing tariff was resulting in more incidence of power pilferage, done often in connivance with the subordinate power distribution staff.

Mr Naqvi said that present overloaded power system was due to the fact that no serious attention was given to the upgradation and modernisation of the system because of the funds shortage, mismanagement and heavy losses incurred by Wapda during the past six years.

He said in the past Wapda used to have standby capacity of power generation and transmission, but since the private thermal power stations had come up and the authority started purchasing power from them, little focus was placed on the maintenance of the stand-by arrangement. As a result, he said, much of the system had become worn out. Wapda had no other option but to resort to loadshedding to save the system, particularly during the peak hours in the evening, he added.

Referring to Wapda’s financial position, he said that the authority had been running in profit for 41 years, since its inception in 1959, till 2000. He said it had been incurring an average loss of Rs40 billion a year since the financial year 2000-2001. According to Wapda, the rising cost of oil used as a fuel in thermal power generation and purchase of thermal power from IPPs were the main factors for the loss.

“I subscribe to the argument that IPPs are the main burden on Wapda, but the fact was that it had been purchasing power from the IPPs at a cost of Rs50 billion a year till the financial year 1999-2000, after which the cost more than doubled to Rs110 billion a year as it started purchasing more power from the IPPs to meet the rising demand for power from all categories of its over a million consumers. The cost will continue to increase as the demand was constantly rising. More power from the IPPs was being purchased because about half of Wapda’s own thermal plants were either closed while the remaining half were producing power much below their capacity due to deterioration. Long before the IPPs, the federal government had refused to allow Wapda to set up its thermal plants, nor had it started work on any hydro-electric plant due to the controversy on the Kalabagh Dam Project. This policy upset, rather reversed the hydel-thermal balance. Before the IPPs’ arrival in 1994, the hydel-thermal ratio was 60:40. After the IPPs, up to 1998-99, it reversed to 40:60 (Wapda’s own thermal generation was 40 per cent, while IPPs contributing 20 per cent). After 2000-2001, hydel share dropped to 35 per cent (IPPs jumping to 40 per cent). This shows that IPPs share in power supply doubled from 20 to 40 per cent, causing over 100 per cent increase in IPPs’ power cost,” he said. While WAPDAs own thermal power cost was Rs2 to Rs2.50 per unit it was purchasing power from the IPPs from Rs5 to Rs7 per unit. This, he pointed out, was the main cause of Wapda’s financial crisis.

Replying to a question about the future of the power distribution system in view of the present power crisis, the EPF vice-chairman said Wapda had eight power distribution area boards in the country, excluding Karachi which had its own KESC (The boards include five in the Punjab and one each in Sindh, NWFP and Balochistan). He said as the process of privatisation started in Wapda, the boards were turned into separate companies named after their respective head-offices located at Lahore, Faisalabad, Gujranwala, Islamabad, Multan, Quetta, Peshawar (including FATA) and Hyderabad, and were called Lesco, Fesco, Gesco, Iesco, Mesco, Quesco, Pesco, Hesco, respectively. Four of them — Mesco, Quesco, Pesco, Hesco— were running in loss and the remaining four were profitable concerns, he said. He said the government was providing subsidy to the first four companies running in loss. Previously, in the days of combined accounts under Wapda administration, the loss was shared by the profitable area boards. Now the government had a programme to sell them out and the process had started from Fesco to be followed by the sale of other companies. He said that the owner of each company would charge his own rates of electricity to earn profit that would upset the present uniformity of power tariff. The owners of the losing companies would make investments to make them economically viable and profitable and would charge much high tariff which could go up to Rs7 to Rs8 per unit as against the prevailing Rs4.50 per unit of the profitable companies. Such a situation could create great unrest among the people. He said before privatisation, Wapda was like a joint family of eight brothers, four of them being poor and helped out by the rich ones. After separation, the poor would starve. “This is what I fear is going to happen when the people of Sindh, NWFP, Balochistan and Southern Punjab would face perpetual power crisis after privatisation,” he warned.

He said the experiment of the KESC privatisation had not been a success so far, rather it aggravated the power crisis in Karachi. He urged the federal government to wait and see the ultimate result of the KESC’s sell-out before proceeding with privatisation of power distribution companies.

Similarly, he said, Jamshoro thermal power house should not be sold after the heavy loss Wapda had incurred on the sale of its prestigious and most profitable Kot Addu thermal power station at a throw-away price. Kot Addu power was available to Wapda at Rs2 per unit before its sale, and now it was purchasing the same at Rs6 per unit, causing a loss of Rs4 per unit, he lamented.