Pakistan rules out privatisation of power sector

May 13, 2012 12:00 AM

In the first step towards reversal of the proposed reforms of power sector, Minister for Water and Power Syed Naveed Qamar announced that the government has decided not to privatise public sector power entities. He said an earlier decision to outsource operations and maintenance of public sector power generation companies (Gencos) had also been withdrawn.
Mr Qamar made the announcement after holding negotiations with the mainstream Wapda union in his office.

The union had announced that it would hold a countrywide strike against the phased privatisation of the power sector. The minister assured representatives of Pakistan Wapda Hydro Electrical Central Labour Union that the power sector would not be privatised at any cost and no such plan was under consideration.
He said the decision to outsource the operations and maintenance of Gencos to the private sector had been taken by the ministry because inefficiency was observed in the sector.

“There is limited fiscal space and circular debt is also a major problem. The government is not in a position to invest for rehabilitation of the Gencos,” Mr Qamar said.
However, a ministry official told that the plan for outsourcing was part of a USAID project under which the output of Guddu power plant was enhanced by 80 MW. However, due to some reason USAID was not continuing with the project and the government has decided that functions will continue to be carried out in-house.

The minister said reports about privatisation of power sector were baseless.
“What we are doing are certain steps to eliminate electricity theft and legislation is under way to deal with elements involved in power theft,” he added. He said any official of a distribution company or consumer involved in theft would face stern action under the law.

About the labour union’s demand that the CEOs of Gencos should not be appointed from the private sector, he said: “I will discuss the issue with Prime Minister Yousuf Raza Gilani after his return from the UK because this is a policy issue.”
Refuting allegations made by opposition leaders that unscheduled loadshedding was carried out deliberately, he said: “This is unfair. The Punjab government has not implemented the decision of the energy conference to switch to two holidays a week and close shops at 8 pm. We all need to take collective responsibility for the situation and there will be no results of energy conservation measures if Punjab does not implement decisions taken at the conference.”

He said the National Electric Power Regulatory Authority had determined the new power tariff which had been forwarded to the finance ministry.
“However, the finance ministry has not responded and they do not appear to be in favour of giving subsidy on electricity.”

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