ISLAMABAD, Oct 16: The Water and Power Development Authority (Wapda) is seeking arrangement of about Rs50 billion financing through banking sector to partially offset its cash shortfalls over the next four to five years.
Sources in the finance ministry said that the federal government was currently assisting Wapda in negotiations with a consortium of banks to arrange Rs45-50 billion that would be available to the utility over a period of four to five years.
The sources said that Wapda’s overall cash shortfall as of June 30, 2006, stood at about Rs56 billion that was projected to increase to about Rs80 billion by the end of current fiscal year. The shortfall was a difference between the total revenue collection and cash required to meet expenses for fuel, private power purchases, debt servicing, salaries and other miscellaneous expenditures.
A Wapda official said that among other reasons non-recovery of about Rs50 billion arrears from Fata, Peshawar and some other public sector consumers was a major factor contributing to Wapda’s cash shortfalls. “Non-payment of such a big amount not only creates cash problems for Wapda but also compels it to borrow from the market, that too has an additional impact running into billions of rupees,” he said.
Wapda’s member finance was not available for comments on the situation.
In addition, Wapda was facing another Rs55-60 billion on account of system losses which continued to be in the range of 23-24 per cent despite lot of efforts and investments to improve the system. One per cent loss in Wapda, said the sources, translates into a financial loss of Rs2.5 billion per annum.
Similarly, Wapda payments to independent power producers (IPPs) also surpassed Rs100 billion per year.
Without giving details, the sources said that the National Transmission and Dispatch Company (NTDC) recently raised about Rs11 billion from the banking sector while distribution companies of Multan, Faisalabad and Gujranwala had also raised substantial funds at their own to meet expansion and improvement plans.
The said that most of the distribution companies in the Punjab were raising finances at their own, without guarantees from the federal government because of their stable financial position. However, banks were reluctant to provide funds to loss making companies particularly Hyderabad and Peshawar electric supply companies.
Recently, the finance ministry on the instruction of Prime Minister Shaukat Aziz had decided to provide government’s guarantees to Hesco and Pesco to raise required funds from banks.
