The World Bank (WB) has linked Poverty Reduction Support Credit II (PRSC-II) with tariff notification for Wapda's distribution companies (Discos) and progress on power sector reforms programme, sources in Finance Ministry told Business Recorder. The bank, which is now monitoring Pakistan's economic progress, said that power sector reform programme, developed by Ministry of Water and Power last year, was the instrument for PRSC-I, but most of the agreed points are yet to be implemented.
"Tariff notification for discos and Wapda's corporatisation are the two milestones for PRSC-II, but progress on these two sectors is not mentioned. Timely execution of these two matrix is essential for achieving the full benefits which the reforms programme is expected to deliver," sources quoted from the latest letter from the bank to Finance Ministry and Water and Power Minister Liaquat Ali Jatoi.
Wapda is also hindering progress on power sector corporatisation as desired by the bank, and already agreed upon between the federal government, Wapda and the donors.
Shifting the companies to be effective independent financial entities is the final objective of the corporatisation work, which also depends on the final notification of tariff, creation of appropriate contractual and financial relationship between the entities, the bank pleaded in its aide-memoire.
According to sources, the bank has also advised the Ministry of Water and Power to make an agreeable arrangement with the National Electric Power Regulatory Authority (Nepra) as soon as possible on determination of tariff and issuing notification for the individual Discos.
"We have a written a letter to the Minister for Water and Power, asking him to resolve the issue of tariff with Nepra so that new entities would have their own independent financial flows," said an official of World Bank.
Ministry sources said that Additional Secretary, Finance, Asif Bajwa, has convened a meeting of all concerned ministries on Thursday to review and finalise the progress on the commitments made with the bank. This feedback would be placed before the bank's mission, which is scheduled to arrive here on May 12 for fixing targets for the next fiscal year.
The bank is of the view that Wapda does not take significant action to improve the governance structure within the entities in power sector. Action in this area, especially on the guidelines on the responsibility and accountability of the board of directors, management of entities, appointment of new directors and new management, is needed.
The bank said that the framework for comprehensive actions to support cost reduction, performance improvement plan element of the Financial Recovery Plan (FRP)/Strategic Business Plan (SBP) that each entity has to prepare have yet to be completed.
Ministry sources said that bank's mission is to take up all these issues with the government, and Thursday's meeting has been called to deal with the mounting pressure of the bank.
Comments
Comments are closed.