ISLAMABAD: Minister for Water and Power Khawaja Mohammad Asif has said the government has decided to privatise generation and distribution companies and power plants under the energy policy being prepared to meet terms of lending agencies.

Addressing a press conference along with Chief Minister of Khyber Pakhtunkhwa (KP) Pervez Khattak after a meeting here on Friday, Mr Asif said the policy would be given a final shape in five to 10 days.

“We are moving very carefully on energy policy. We are entering into an agreement with the International Monetary Fund. The World Bank is going to provide financing for projects under the energy policy. So support of these two would depend on energy policy and hence it requires utmost care. Otherwise, there is no delay,” he said.

He defended the cost escalation of the 425-525mw Nandipur power project from Rs21 billion to Rs57bn which has attracted apex court scrutiny following a letter written by a former managing director of the Pakistan Electric Power Company and said: “We have justifications for the cost escalation but there is no question of corruption because the money has not been spent yet.”

Mr Asif said Rs342bn had recently been paid to the power sector to clear circular debt and the process of making more payments had started.

When asked how provinces could set up power plants when a regulatory framework did not exist in this regard, he accepted that there was a roadblock and said the regulatory bodies would have to move with the fast pace of the government to resolve energy crisis and provide relief to people.

The federal government, he said, would strive to resolve the issue of loadshedding in KP while the provincial government would help in recovery of electricity dues. The chief minister has promised to provide support and security to staff of electricity companies during recovery.

He said the issues relating to transmission and distribution system in the province were of peculiar nature which would be taken up with the prime minister to ensure their resolution.

Mr Asif said KP had a rich potential of generating hydel power and the federal and provincial governments had decided to jointly work to make full use of the resources.

He said the provincial government had been assured that there would be no recurrence of last week’s situation which had led to mass protests.

“We will ensure that there is no discrimination against any province but… there is shortfall all over the country which needs to be shared on equitable basis.”

Chief Minister Khattak described his meeting with Mr Asif as constructive and expressed the hope that the issues of loadshedding, funding and power production would be resolved soon.

Grid stations in the KP were in a poor condition, he said, adding that even if the federal government succeeded in improving generation, power outages would continue in his province because of faults in the distribution and transmission system. He urged the federal government or Wapda to upgrade the system.

Answering a question he said he believed that Kalabagh dam should be built with national consensus and when all provinces agreed to it. Efforts should be made to develop this consensus.

He said the KP had a potential of generating over 24,000MW hydropower and he had requested the federal government and the chief minister of Punjab to invest in the province so that additional electricity could be added to the system in two to three years.

The province required about 2600MW but was currently getting about 2100MW, he said, adding that the shortage was not the only issue. Because of poor transmission and distribution system, many areas were facing forced shutdowns and the situation was creating problems for his government.

He said the province produced more electricity than it received. Its government was willing to take over the Peshawar Electric Supply Company if it was also given control over generation in the province. He said curbing electricity theft was the responsibility of Wapda and the government would provide support and security to its staff during its campaign against theft.