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Monday, May 12, 2008
ISLAMABAD: The government is all set to merge the Pakistan Electric Power Company (Pepco) into its parent organisation the Water and Power Development Authority (Wapda) as was demanded by the Independent Power Producers (IPPs).
"The government has decided in principle to merge the Pepco into Wapda and a formal notification would be issued shortly," sources in the Water and Power Ministry told The News here on Sunday.
After its separation from Wapda, Pepco was practically made functional in Oct 2007 as a real independent entity to exclusively deal with matters related to the power generation. Under new arrangements, Pepco will lose its independence. Pepco was an independent entity and all matters relating to the electricity went to the company while Wapda was left with only operational command of dams and hydropower houses.
"The IPPs wrote a letter to the federal government last week and conveyed their reservations about Pepco's independent position and pinpointed difficulties they were facing during the last four to five months," sources maintained.
Sources said the Pepco had already been given under Wapda for all practical purposes with the removal of its Managing-Director Munawar Baseer and taking up the charge of the entity by Wapda (Member) Power Fazl Ahmed Khan.
"At present, the water and power secretary is Pepco chairman and if its chairmanship is given to Wapda, it would serve the purpose and would be a step tantamount to bringing the company to its previous position," the sources said.
Water and Power Minister Raja Pervez Ashraf called a meeting of officials of his ministry, Wapda, Pepco and IPPs last Friday but it was cancelled at the eleventh hour without announcing a new tentative date for the purpose.
"Representatives of the private power producers were told that the government is either abolishing or merging Pepco into Wapda," sources further said. In their set of demands, the IPPs refused to accept Pepco guidelines following delay in payments of power charges to them.
"IPPs also demanded that they had struck power purchase agreements with Wapda and not with Pepco," the official added. The government had made Pepco an independent body under the World Bank-funded restructuring and reforms programme, namely Power Sector Strategic Plan, started in 1992.
Under the plan, the power wing of Wapda was structured into four Generation Companies (GENCOs), National Transmission and Dispatch Company (NTDC) and nine Distribution Companies (DISCOs).
Pepco was established in 1998 as an independent body with a mandate to restructure the power sector, corporatise and commercialise restructured entities, and to bring about reforms through competition, enhancement of efficiencies and best financial and prudent utility practices.
Pepco initiated restructuring and reform process in 1998 with limited success. The reform process slowed down considerably after 2001 when Pepco was reduced to a division of Wapda. The government reactivated the mandate of Pepco in Oct 2007 to bridge the increasing demand and supply gap and to reduce load shedding in the country, officials said. Munawar Baseer was appointed Pepco managing-director in Oct 2007 will all decision-making powers. From the very beginning, Wapda Chairman Shakeel Durrani and Pepco Managing-Director Munawar Baseer were at loggerheads and blamed each other for the power crisis.
ISLAMABAD: The government is all set to merge the Pakistan Electric Power Company (Pepco) into its parent organisation the Water and Power Development Authority (Wapda) as was demanded by the Independent Power Producers (IPPs).
"The government has decided in principle to merge the Pepco into Wapda and a formal notification would be issued shortly," sources in the Water and Power Ministry told The News here on Sunday.
After its separation from Wapda, Pepco was practically made functional in Oct 2007 as a real independent entity to exclusively deal with matters related to the power generation. Under new arrangements, Pepco will lose its independence. Pepco was an independent entity and all matters relating to the electricity went to the company while Wapda was left with only operational command of dams and hydropower houses.
"The IPPs wrote a letter to the federal government last week and conveyed their reservations about Pepco's independent position and pinpointed difficulties they were facing during the last four to five months," sources maintained.
Sources said the Pepco had already been given under Wapda for all practical purposes with the removal of its Managing-Director Munawar Baseer and taking up the charge of the entity by Wapda (Member) Power Fazl Ahmed Khan.
"At present, the water and power secretary is Pepco chairman and if its chairmanship is given to Wapda, it would serve the purpose and would be a step tantamount to bringing the company to its previous position," the sources said.
Water and Power Minister Raja Pervez Ashraf called a meeting of officials of his ministry, Wapda, Pepco and IPPs last Friday but it was cancelled at the eleventh hour without announcing a new tentative date for the purpose.
"Representatives of the private power producers were told that the government is either abolishing or merging Pepco into Wapda," sources further said. In their set of demands, the IPPs refused to accept Pepco guidelines following delay in payments of power charges to them.
"IPPs also demanded that they had struck power purchase agreements with Wapda and not with Pepco," the official added. The government had made Pepco an independent body under the World Bank-funded restructuring and reforms programme, namely Power Sector Strategic Plan, started in 1992.
Under the plan, the power wing of Wapda was structured into four Generation Companies (GENCOs), National Transmission and Dispatch Company (NTDC) and nine Distribution Companies (DISCOs).
Pepco was established in 1998 as an independent body with a mandate to restructure the power sector, corporatise and commercialise restructured entities, and to bring about reforms through competition, enhancement of efficiencies and best financial and prudent utility practices.
Pepco initiated restructuring and reform process in 1998 with limited success. The reform process slowed down considerably after 2001 when Pepco was reduced to a division of Wapda. The government reactivated the mandate of Pepco in Oct 2007 to bridge the increasing demand and supply gap and to reduce load shedding in the country, officials said. Munawar Baseer was appointed Pepco managing-director in Oct 2007 will all decision-making powers. From the very beginning, Wapda Chairman Shakeel Durrani and Pepco Managing-Director Munawar Baseer were at loggerheads and blamed each other for the power crisis.
