Clarification

This refers to Business Recorder editorial titled "Power sector reforms" of (07.10.2010) wherein Pepco's dissolution has been commented without reference to relevant context and lacks appropriate information that was needed to reach credible conclusion. It is clarified that Pepco dissolution, as it has been reported in media, has not been hurriedly put in place.
Instead the Government of Pakistan has decided its winding up through a well considered process of due diligence and necessary power sector-related consultations and studies spanning over one and a half decade. The Companies Ordinance 1984 vide Sections 403-404 provides for winding up of any corporate sector company in the wake of controlling partners well-thought out decision. Comments of Business Recorder editorial therefore, are contested on following grounds:-
a. The recent dissolution announcement about Pepco as apex management company originates from Wapda's strategic plan for privatisation of Pakistan's power sector prepared in 1992 to meet three critical goals focusing enhanced capital formation for power sector outside GOP budget, improve sectoral efficiencies and rationalise pricing + social subsidies. It is obvious that due diligence and a consultative process was initiated during 1992 and continued in the following decades.
b. According to GoP's corporate governance plan in power sector, the ultimate structure was conceived on the principles of PSEs corporatisation, partial private generation, efficient functioning of Discos, socially desirable and subsidised services and putting in place a power sector regulator (Nepra) with necessary legal empowerment to regulate power sector operations plus tariff rationalisation. Consequently, Pepco was formed in 1998 with a two-year mandate to manage unbundling and corporatisation of then Wapda entities. It led to privatisation of Kapco and KESC only. The process, then slowed down, led to multiple complexities leading to circular debt, distribution inefficiencies, line losses and power theft.
c. Factually there are no disagreements within the GoP's power sector set up on implementation of power sector reforms, which focus the primary objective of public interest. The Ministry has designated a Transition Team to relocate Pepco's functions under the principle of rationalisation of state institutions.
d. The power sector reforms implementation plan has a history of more than one decade's consultation and deliberation process, which now is reaching its logical conclusion. No individual figure in power sector has been sidelined. Instead, it is part of a well thought out reforms process, which has actively been supported by media through stories, comments and editorials over a period of last decade.
e. This Ministry finally would support the core conclusion of Business Recorder editorial which states: "these reforms have the capacity to allow the power sector to operate at full capacity which, if implemented, would automatically reduce the massive power shortfall."-PR