ISLAMABAD

The Planning Commission Tuesday proposed the government to decentralise the energy sector to the provinces, as prescribed in the 18th amendment, to improve its efficiency.

“There is no harm in decentralizing the energy sector as it will improve the efficiency of the power and gas companies,” said member energy, Planning Ministry, Syed Akhter Ali Shah while speaking in a consultative meeting of the Planning Commission.

The Planning Commission organized consultative workshop on mid-term performance review of the government here Tuesday. Six consultative groups were established to discuss the achievements, economic situation and challenges faces by the key ministries. The consultative group of Energy, Gencos, Discos, Petroleum and LNG is headed by the member Energy, Planning Development and Reforms, Syed Akhter Ali Shah.

During course of discussion, member energy said that there are voices coming from Khyber Pukhtunkhwa and Sindh for the implementation of energy-related clauses of the 18th amendment. There is confusion over the ownership of the energy sector which is stopping the progress of the sector, he added. However, he said that centralization does have some positive impacts therefore there should be some compromise between the federal and provincial governments.

“I will say the government has failed to control theft, reorganize energy sector, establish energy ministry, make new companies for SNGPL and SSGCL, and merge NEPRA and OGRA” he said. The reorganization of energy sector is required and can resolve the issues facing the sector. Member energy said that the government has also failed in the theft reduction of electricity and gas, he said.

The establishment of the energy ministry was the part of the present government election manifesto but has not been materialized so far. “Throughout the world, except India and Pakistan, one energy ministry takes care of petroleum and power sector,” he added. Similarly, the merger of NEPRA and OGRA could not be materialized, he added.

The government also failed to separate the distribution and transmission services of SSGC and SNGPL. Beside the separation of distribution and transmission services, member energy proposed the establishment of small gas companies which can be controlled easily.

Similarly, he said, the larger Discos should be also divided into further companies. “Take for example the Peshawar Electricity Supply Company (PESCO) which is controlling the whole of Khyber Pukhtunkhwa. It is hard to manage such a big area by just one utility company and therefore the companies are facing problems,” he pointed out.

Additional Secretary ministry of water and power, Umer Rasool said that the current government has reduced the cost of the electricity generation. He said earlier there was mafia which used to bribe the authorities for running their inefficient power plants which was increasing the generation cost of the electricity but now everything is controlled by NPCC. “The NPCC issues instructions for running the power plants in proper order and according the electricity requirements,” he said.

Rasool said that there are bad Discos in Sindh, Balochistan and KP and they are the ones responsible for losses. “There is less recovery and more losses in these areas which is the main reason for the loadshedding in these areas. Those who will not pay their bills will have to face loadshedding,” he said. He said that the present government has reduced the subsidies to power sector from Rs 334 billion in 2012-13 to Rs113 billion 2014-15. “The subsidies, which were 2.4 percent of the GDP, have been brought down to 0.67 percent of GDP,” he claimed.

Similarly, circular debt has also been brought under control as in 2012-13 Rs 203 billion were added to the circular debt but during 2014-15 only Rs 49 billion were added to the circular debt, he claimed. He also said that all the major power projects launched are near financial close.

Another participant of the consultative group said that the government needs to make new water reservoirs and warned that if no new reservoir was constructed in next five to seven years the country will become a water scarce country.

Once again, the Ministry of Petroleum and Natural Resource deputed only one DG Hydrocarbon who was not concerned about the major issues of petroleum sector particularly LNG. Therefore, the issues related to petroleum sector were not discussed in the forum.