ISLAMABAD:  Political interference, lack of policy guidelines, ad hoc appointments to key posts and security situation in the country are hampering the functioning of Water and Power Development Authority's (Wapda) distribution companies on professional lines, affecting the power sector reforms aimed at benefiting consumers.

This was the gist of a rare feedback shared by the newly-constituted boards of directors of power companies at a seminar organised by the Planning Commission on Thursday.

It was also clear from the seminar attended among others by Finance Minister Abdul Hafeez Shaikh and Water and Power Minister Syed Naveed Qamar that the government continues to pass on to the honest consumers the negative impact of external factors through increase in tariff.

These factors included high line losses arising out of the security situation, non-recovery of arrears and slower tariff determination by the regulator and stay orders issued by courts.

The ministers told the board of directors that while they would support them in changing the working culture by not taking decisions on operational matters relating to their companies, the boards would also have to exercise their authority under the Companies Ordinance,1984.

Mr Shaikh said the government had injected over Rs1 trillion into the power companies, but the policy was no more sustainable.

He said such a huge amount could have been better utilised for health, education and infrastructure development.

While directors questioned the utility of proposed smart and pre-paid meters, most also complained about 'cartelisation' of manufacturers of transformers, meters and other equipment and lack of support from the police to register electricity theft cases.

Seeking support from the finance minister and Deputy Chairman Planning Commission Dr Nadeem ul Haque, they quoted instances where officials identifying theft cases had been removed.

The chairman of the Multan Electric Power Company said his firm faced interference from members of assemblies even in posting of subdivisional officers, adding the board was at a loss how to hold such officers accountable when they were transferred on the recommen-dations of politicians.

Not only this, he said, the board members were threatened with dire consequences if they resisted such political interference.

He said losses of his company were the highest in the province because of extensive electrification of villages and tubewells on political considerations.

He said a ban had been imposed on transfers and postings for six months and sought the help of the two ministers in this regard.

The Gujranwala Electric Power Company and Lahore Electric Supply Company also complained political interference in the affairs of the companies.

Mr Haque, who presided over the session, did not allow an answer to a question if the prime minister and his family also influenced the decision-making process in the companies.

The chairman of the board of directors of Peshawar Electric Supply Company said the company was suffering about 37 per cent system losses because 35 per cent of its service area was still a 'no go area'. As a result, he added, the company's liabilities had increased to Rs80 billion.

Most directors also complained about legal difficulties that had led to delayed recovery of fuel price adjustment.

The chairman of the Islamabad Electric Supply Company talked about multiple authority levels, starting from the water and power ministry down to Nepra, NTDC and the management of the company, saying at times these authorities played conflicting roles.

He said his company was bigger than many multinationals operating in the country but it had been unable to become a listed company.

He said the government had signed loan contracts with international agencies at 16-18 per cent interest rates even though they could have raised finances from the domestic market at 12 per cent mark-up. T

hese loans would create serious cash flow problems for the power companies at the time of maturity, he feared.

Pepco's former managing director Tahir Basharat Cheema said the Electricity Act, 1910; Electricity Rules, 1937; and Telegraph Act, 1885, were being redrafted to deal with issues of thef t, disconnections, etc. He said the matter had been awaiting vetting by the law ministry for the past 10 years.