ISLAMABAD, Nov 2: The government is in a fix whether to introduce separate electricity rates for consumers under eight distribution companies of Wapda and Karachi Electric Supply Corporation or pick up the losses of five companies through federal subsidy.
The policy committee on power sector reforms, comprising federal secretaries of finance, water and power, industries and production, petroleum and natural resources, Privatization Commission and Planning Commission, is expected to meet next week to consider this question as the power sector reforms enter a crucial stage, official sources told Dawn.
The distribution companies (Discos) of Wapda like Peshawar, Quetta, Hyderabad and Multan besides KESC were highly indebted and loss incurring companies and if the tariff was rationalized accordingly could multiply in some cases by over 50 per cent, Wapda sources said.
On the other hand, these sources said, that tariff of these would be much lower than current tariff of companies namely Lahore, Gujranwala, Islamabad and Faisalabad and would create a lot of social imbalances within various districts of the same province and among various provinces.
Wapda sources told that the policy committee has only two options; (i) Seek a government decision on fixing separate tariffs for the consumers of various distribution companies, (ii) Ask the federal finance ministry to pick up the losses of five companies (PESCO, QESCO, HESCO, MESCO and KESC) so as to provide a uniform tariff for all consumers across the country.
Wapda sources however said that the world bank authorities did not realise this factor since they were unaware of the ground situation in various parts including far-flung areas of Balochistan and tribal areas and government’s social and political obligations.
“The world bank officials during the last months visit here insisted to go ahead with the reforms programme notwithstanding social and practical difficulties”, said a government official.
The question whether aligning electricity tariffs solely to the cost of supply would not substantially increase the cost of electricity for many consumer categories and areas and whether it would be socially sustainable, needed to be addressed before implementation of reforms process.
Wapda officials believe that loan and equity portions in the corporate companies was also a difficult issue.