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Nawaz Sharif asked power sector to avoid loadshedding during Ramazan

25 April, 2017

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ISLAMABAD: Prime Minister Nawaz Sharif on Monday asked the power sector to buckle up for the upcoming month of Ramazan and avoid a repeat of the 13-14 hours of loadshedding in April.

Chairing a meeting of the Cabinet Committee on Energy (CCoE) — the third in a fortnight — the PM ordered top officials to remove supply chain hurdles that were adding to outages, even as former water and power secretary Younas Dagha passed the buck on to the ministry of finance and the power sector regulator in the absence of their top guns.

Finance Minister Ishaq Dar and Finance Secretary Tariq Bajwa are currently in the US as part of meetings with the World Bank and International Monetary Fund, while the chairman and members of the National Electric Power Regulatory Authority (Nepra) are seldom called to CCoE meetings.

Sources said that Mr Dagha, who is now commerce secretary, finally showed up at the CCoE meeting after skipping two earlier sessions on April 10 and 18, for various reasons. The prime minister repeatedly asked why there had been 13-14 hours of loadshedding in April when the secretary had assured the government of power cuts not longer than three to four hours.
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Mr Dagha listed three challenges — management problems, tariff and financial issues and distribution challenges — that he had been working around while he was secretary for water and power.

He blamed the finance ministry for not making timely disbursements of tariff differential subsidies, which, at Rs118 billion for the current year, he claimed, were under-budgeted in the first place.

On top of that, the ministry had been reducing the subsidy amount every year under international obligations, even though the requirement for domestic consumers was around Rs170-180bn. He said that a number of power plants were lying idle or operating below optimal levels, despite the fact that furnace oil was abundantly available.

He also claimed that his plan to utilise some rental power plants (RPPs) and independent power plants (IPPs) on a temporary basis had remained unmoved before the Ministry of Finance for almost a year.

Under that plan, the management of such plants had agreed to generate electricity and charge only for the energy component (excluding capacity payments), provided the government supplied them fuel until the two sides reached a settlement.

Loadshedding could, therefore, be reduced to the three-four hour-level even now if funds were made available and paid to the power plants, he said.

Moreover, Mr Dhaga claimed he was not given a free-hand in administrative initiatives over his last six to eight months at the power ministry, which he insisted could have addressed problems with distribution companies.

In their tariff structure, he said, the power regulator was expecting 100pc recoveries and system losses at a level only seen internationally, even though the government had imposed three special surcharges of Rs2.50 per unit and held back tariff reductions by going into litigation against Nepra’s tariff cuts.

Sources said the prime minister, who was livid over the loadshedding situation during a recent address at Bhikki, did not seem in an aggressive mood and did not press for action against the officials responsible for the power gaps.

PM Sharif directed his secretary, Fawad Hassan Fawad, Water and Power Minister Khawaja Asif and Secretary Yousaf Naseem Khokhar to have separate sessions with Nepra officials at the earliest to settle tariff issues.

He warned that he would not tolerate a repeat of the unscheduled loadshedding seen in April during the month of Ramazan.

The PM also took note of repeated reports of transmission challenges when the water and power secretary briefed the meeting on the current load management plan, the implementation status of planned and ongoing energy projects and improvements in the transmission system.

The chairman of the Water and Power Development Authority briefed the meeting on the progress of hydel projects, including Dasu, Diamer-Bhasha and Mohmand dams.

The prime minister directed the power ministry to immediately resolve upfront tariff issues with Nepra for different kinds of fuels, including LNG, solar, coal, furnace oil, diesel and gas. He also ordered all line departments to work out immediate solutions for administrative and legal issues that were holding up the implementation of energy projects on a priority basis.

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