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CCI defers approval of power policy

Updated July 24, 2013

ISLAMABAD, July 23: The Council of Common Interests deferred on Tuesday for a week the approval of a new power policy on the request of chief ministers of Khyber Pakhtunkhwa and Sindh.

Although a meeting of the CCI lasted for over two hours, it could not approve the policy because KP Chief Minister Pervez Khattak expressed his inability to make suggestions or recommendations before going through its draft and getting an expert opinion on it.

According to a government official, Sindh Chief Minister Qaim Ali Shah shared the views of his KP counterpart and sought some time.

The prime minister accepted their plea and constituted a special committee, comprising chief secretaries of the four provinces with one nominee each of the provincial governments. The committee will submit its report within one week.

The official said earlier a detailed briefing was made, particularly for Khyber Pakhtunkhwa and Sindh chief ministers.

Punjab Chief Minister Shahbaz Sharif has been the core member of a government team which worked on the power sector reforms and Balochistan Chief Minister Dr Abdul Malik is an ally of the PML-N.

At least three smaller provinces are not happy with a recommendation in the proposed policy that provincial governments will be responsible for 70 per cent of recovery of electricity bills in their domains, failing which a deduction will be made at source from the federal divisible pool.

Since the provincial governments had the constitutional protection for distribution of funds from the federal divisible pool, why would they forgo their right just to benefit the federal government, wondered an energy expert.

The provinces would be least interested in sharing the burden of Wapda’s mismanagement because electricity was a federal subject, he said.

According to another recommendation, the federal government intended to stiffen punishment for electricity and gas theft.

But the KP government felt that it would not be easy to enforce strict punishments at a time when the provincial police was already at the receiving end in its fight against militants, a PTI source said.

The legal framework worked out by the federal government needed provincial governments’ consent for implementation. According to it, anyone found involved in tampering with the transmission of electricity will be awarded a three-year imprisonment or Rs10 million fine or both.

It has suggested a two-year rigorous imprisonment or Rs3m fine or both to those involved in damaging the transmission line or power theft, one-year jail sentence or Rs1m fine or both for tampering with domestic power meters and a three-year imprisonment or Rs6m fine or both for tampering with commercial meters.

Provincial governments will be responsible for arresting and prosecuting the accused because law and order is a provincial subject.

The meeting also discussed the issue of restricting government subsidy to the domestic consumers who use 200 units per month. The Sindh chief minister wants the limit to be raised to 300 units.

The prime minister told the CCI meeting that major problems being faced by the power sector were demand-supply gap, lack of affordability, inefficiency and power theft.

“Pakistan is producing 45 per cent of electricity with expensive furnace oil, resulting in higher tariffs. The distribution losses of 25-28 per cent and electricity theft worth Rs140 billion per annum are major causes of power shortfall,” Mr Sharif was quoted as having said at the meeting.

After the CCI meeting, the prime minister and his energy team had a meeting with newspaper editors, TV anchorpersons and owners and managing directors of media houses.

Dr Musadik Malik, special assistant to the prime minister on energy, gave a briefing. It was followed by a question-hour session.

A cursory look at the energy policy and strategy draft suggests that the government wanted massive privatisation of the power sector, but in a phased manner.

According to a participant of the meeting, there was nothing new in the policy because international donors had been pushing the governments in the past for tariff increase and improvement in the management of the power sector.

Mr Sharif agreed with a questioner that one should not expect new investment in the absence of a good law and order situation.

The government is working on a national security policy.

The prime minister said that poor policies and a lack of attention by previous governments had put the energy sector in a shambles.

He said the generation of cheap electricity was a challenge, but the transmission and distribution system also needed revamping and huge investments.