ISLAMABAD, May 31: The World Bank confirmed on Saturday that the government of Pakistan had given an assurance it will not cut power tariff as a result of a reduction in fuel oil prices during the current quarter until the previous Wapda losses were covered.

Talking to reporters here, the World Bank country representative John Wall said the donor agencies wanted to see that the financial health of power companies was not hurt on account of furnace oil prices.

Under the revised financial improvement plan of Wapda submitted to the donors, the government has given an undertaking that a downward revision in power tariff authorized by Nepra under ATA formula would not be passed on to consumers unless the preceding cumulative deficit is met.

Mr Wall stressed the need to run all Wapda’s unbundled power distribution companies (Discos) and Generation Companies (Gencos) on a commercial basis.

Responding to a question about the presence of Pakistan Army in the unbundled eight Discos and three Gencos, the World Bank representative said that power sector business should be run commercially.

He said that everyone had agreed that professionals should be encouraged as chief executives of all the Discos and Gencos.

About the corporatization and privatization of power sector, he said paperwork had been completed in this regard, and Wapda had also been unbundled into Discos and Gencos and now the government was working on the privatization of two Discos and one Genco.

On Wapda’s dues of Rs24 billion payable by Fata, the WB official said Wapda should tackle the issue tactfully in view of the political and social problems there. He also said that Wapda should not use coercive measures to recover its dues from Fata people.

“After reconciliation of dues figures with Fata administration, Wapda should claim for the dues as according to it, Fata has to pay Rs24 billion which needs verification,” he said.

Responding to another question, he said the World Bank had no objection to the government’s decision to increase the size of the PSDP from Rs134 billion in 2002-03 to Rs160 billion in 2003-04 as it had improved the macro economy of the country, and reduced the debt servicing to a reasonable extent which had provided fiscal space to the government for increasing the allocations for the PSDP 2003-04.