ISLAMABAD The history of supply of electricity in the country has been characterised by consistent power supply deficits, massive loadsheddings, resource constraints, extensive government involvement in finance and management, political interference in the management of the sector, and heavy dependence on weather-based hydel power. To add fuel to fire, genie of corruption and negligence has caused huge losses to Water and Power Development Authority (WAPDA). As many as five power generation and distribution companies have suffered a huge loss of Rs 16,402.925 million (197.62 million US dollar) during the fiscal year 2008-09, TheNation has learnt reliably. According to the documents available with TheNation, three power generation companies including Jamshoro Power Generation Company, Central Power Generation Company and Northern Power Generation Company have been facing huge losses for the last three years. Net loss of Jamshoro Power Generation stood at Rs 1761.147 million during the financial year 2008-09. Same company earned profit of Rs 308.489 million during the FY 2007-08. Central Power Generation Company Limited suffered a heavy loss of Rs 2,131.232 million despite increase in sale by 36 percent. During 2008-09 the Company sustained a gross loss of Rs 1,437 million, which showed that the revenue was not enough to cover even generation cost. Northern Power Generation Company suffered a heavy loss of Rs 2,330 million during the financial year 2008-09 as compared to a profit of Rs 266.790 million during 2007-08. This was mainly due to increase in cost of sales by 21.52 percent and administrative and general expenses by 157.58 percent. According to documents available with TheNation, a huge increase in administrative and general expenses needs justification. Lakhra Power Generation Company sustained losses of Rs 465.849 million and Rs 585.331 million during 2007-08 and 2008-09 respectively, while net losses for the same company stood at 404.081 million during the financial year 2006-07, revealed the documents available with TheNation. Four electric supply companies including Lahore, Multan, Peshawar and Tribal suffered huge losses due to poor management and maintenance. Lahore Electric Supply Company suffered a loss of Rs 25 million during the financial year 2008-2009. Multan Electric Supply Company sustained loss of Rs 3,305.505 million during the financial year 2008-09. Net losses for this company stood at Rs 3,362.921 million and Rs 11,885.340 million in 2006-07 and 2007-08 respectively. Consequently the profitability ratios remained negative during these years, the documents revealed. The documents further revealed that the Company suffered a huge loss during FY 2007-08 because it was not allowed to increase tariff by NEPRA/ Government of Pakistan despite filling tariff petition by the Company according to their requirements. Peshawar Electric Supply Company sustained losses of Rs 6,251 million during the financial year 2008-09. Loss for the same company stood at Rs 3514.751 million during 2006-07 and Rs 8,067.519 million in 2007-08. Net profit ratio remained negative during these years. Tribal Areas Electric Supply Company faces a decrease in revenue by 13.71 percent as well as cost of sales increased by 5.85 percent with the result that the gross loss of Rs 440 million (2007-08) increased to Rs 2,716 million during financial year 2008-09, revealed the documents. The high-ups of the Company said that they had told the authorities concerned that theft of material (Rs 1.504 million) and non-recovery on account of unauthorised extension of load (Rs 5.962 million) were main causes of huge losses. The demand for electricity during the financial year 2008-09 remained in excess of supply even the shortfall ranged from 1,286 to 4,878 MW. The Electric Coordination Committee approved installation of rental power plants for a total capacity of 2,700 MW (800-1200 & 1500 MW) through PEPCO and Private and Infrastructure Board in February 2008 and September 2008 respectively to reduce gap between demand and supply. However, only two rental plants with 180 MW could be added to the system, which did not serve the purpose. The shortfall was coped by the massive loadshedding which almost paralysed the social and economic sectors inviting wide spread protest of all segments of society. As a matter of fact PEPCO failed to minimise the loadshedding in the country, leading to closure of industry, unemployment and poverty. The normal power shortfall has been crippling the economic and social sectors since 2007-08 and until the gap between demand and supply is removed, the national economy can hardly be on track. According to careful observation by this correspondent (also supported by the documents available with TheNation), the operational management of PEPCO is responsible to assess and execute schemes for generation transmission and distribution of power through commercial procedures, technical instructions and electricity tariff. According to documents, five distribution companies including LESCO, MEPCO, PESCO, TESCO, and HESCO could not achieve targets set by NEPRA to control the transmission and distribution losses. It is believed that the failure involved monetary loss of Rs 3,456.43 million on this account. Distribution losses are composed of administrative and technical losses. As regards administrative losses, measures taken to control theft of energy were insufficient and ineffective. Utterly alarmed by the consistent power supply deficits, massive loadshedding, resource constraints, extensive government involvement in finance and management, political interference in the management of sector and heavy dependence on weather-based hydel power, need of privatisation of power sector was realised. However, challenges of Pakistani power sector, such as cross-subsides, flat tariffs, fixed tariffs, and revenue sharing with provincial governments have been complicating the privatisation efforts. In a bid to address the problems of power sector, WAPDA entrusted the International Resources Group to formulate a strategic plan to restructures and eventually privatise the electric power industry in Pakistan. The group submitted strategic plan in 1992, entailing quadruple phased implementation programme. To the shock of many in the country, the said implementation programme could not be materialised to the extant of privatisation of power sector entities. However, in 1998 the exigency of transformation of the power sector into privatised competitive electricity industry was realised which prompted the Government to establish PEPCO, a management company, 100 percent owned by Government of Pakistan. It was given the mandate of two years to implement the strategic plan by restructuring WAPDAs power function into corporate companies. It was also tasked to establish business relationship amongst them. However, PEPCO couldnt achieve the ultimate desired objective of preparation of the corporate entities towards privatisation with stipulated period of two years. Hence its viability, as a management company at the cost of management fee being charged to corporate entities, is a question mark, which warrants attention of the incumbent Government, it is believed.