ISLAMABAD, Aug 31: The World Bank has asked the government to notify separate tariffs for all distribution companies of Wapda to allow them become completely independent and bring in transparency in the power sector.
Sources told Dawn on Thursday that the Bank has told the government that a unified tariff under Wapda was a major cause for continued power sector problems in the country.
The sources said the Bank believed that it was right time for the government to announce differential tariffs for all distribution companies of Wapda, because if delayed it would become more difficult due to the expected elections next year.
The sources said that a World Bank mission that visited Islamabad a few days ago insisted that unless all companies were made responsible for their finances and allowed to function independently, it would not be possible to bring in efficiency in the power sector because inefficient companies like Quetta, Hyderabad, Peshawar and Tribal and Multan companies were being subsidised by some profit making companies like Lahore, Islamabad, Faisalabad and Gujranwala.
The government had been delaying announcement of separate tariff for all the corporate companies for the last 15 months despite separate tariff determinations made by the National Electric Power Regulatory Authority (Nepra) in February 2005.
The government has now allocated about Rs22.5 billion for the current year as subsidy to maintain electricity rates at the existing level. Over Rs60 billion has been injected into Wapda companies in the last five years to improve their financial conditions but most of them are still in bad shape.
The government, official sources said, has reached the conclusion that a power tariff increase would negatively impact the overall growth momentum and push up inflation. It also views separate tariffs as a politically difficult proposition.
It is often criticized in parliament for different tariffs being charged to Karachiites and the rest of the country under Wapda jurisdiction. It finds it difficult to defend if tariff in Islamabad and Punjab remains at the current level but increases manifold in Balochistan, Sindh and the NWFP and Fata. Mainly because of no progress on differential power tariffs, the corporatisation of Wapda and power sector reforms programme had been stalled for the last two years and none of its companies could be privatised despite continued efforts.
