ISLAMABAD, March 27: Pakistan has sought special funding from the World Bank to formulate appropriate policies relating to power tariffs, subsidies, increased access to electricity and market competition, it is learnt. Official sources told Dawn here on Friday that the World Bank had been informed that the Pakistan government would pool equal financial resources to help implement comprehensive reforms and restructuring programme of the country’s power sector. The purpose is to accomplish a long-term vision for the reformed and restructured power sector for which a new policy and implementation cell (PIC) will be established in the ministry of water and power to ensure policy decisions by the competent authorities.
In addition, PIC would also help develop policies to promote indigenous power resources such as hydro, gas and coal-based thermal units and renewable energy schemes. At present there is a dearth of professionals capable of addressing complex issues in the reformed and restructured power sector.
More specifically, the power wing of the ministry of water and power lacked the capacity to formulate suitable policies especially relating to tariffs and subsidies. It also did not have professional resources to effectively coordinate, oversee and monitor the performance of public sector entities.
In view of the financial plight of Wapda and the KESC, the government has initiated a financial recovery plan for both the entities which was reportedly at an advanced stage now.
Sources said that steering the financial recovery of both the public sector power companies was also a major challenge for the power sector. Therefore, there was an urgent need to equip the power wing of the ministry of water and power with necessary capability through hiring of specialists and to upgrade the skills of the power wing through comprehensive multi-year training.
The ministry of water and power did not have resources - under any ongoing project or technical assistance programme - which could be utilized for strengthening its policy formulation and implementation capacities.
The World Bank has been requested to provide resources through its Public Sector Capacity Building Programme (PSCPB) for funding the capacity building programme of the water and power ministry. These resources will also be used to provide the much-needed training to power sector entities in modern techniques, procedures and management from the contemporary power markets.
The World Bank funding will be used to transform the integrated state-owned utilities into professionally managed, competitive, financially viable, and efficient electric power system of generation, transmission and distribution, with the participation of the private sector.
The objective is also to reform power market and provide level playing field to all players in the market and to enhance access to electricity and quality of services at affordable prices.
This objective will be accomplished by hiring advisers/experts to assist in preparing a policy framework for components of the power sector reform programme and provide on-the-job training to professionals in the power sector.
The major component would comprise policy analysis, planning, identification of options, ranking of options relating to pricing, investments, efficiency of operations, and access to electricity.
Under the programme, issues of subsidies/cross-subsidies, rural electrification and social aspects will be discussed openly with local and foreign participants at various proposed seminars, workshops, conferences to have the views of all stakeholders before formulating policies particularly relating to power tariff and subsidy.