World Bank asks Discos to update PC-1 documents

The World Bank (WB) has asked the power distribution companies (Discos) of Wapda to revise their PC- 1 documents on the basis of new financial projections, official sources told Business Recorder.
"Discos PC-1 documents were old and the figures used in the analysis, tariff, electricity value and investment costs have changed and these should be reviewed and revised as appropriate," the sources quoted the bank''s power sector mission as directing the government and companies during their meetings in October.
The bank was of the view that to avoid lengthy approval process of investment proposals, the project proposals should be consistent with the already approved PC-I documents to the extent possible without compromising the relevance of the projects possible addressing the companies'' priorities, the sources added.
According to these sources the bank''s team has reviewed a sample of PC-I documents to assess to what extent they correspond to project design and selection criteria described above.
The bank observed that the PC-I documents for the ELR appear to be identical in their structure and approach across the companies, with the main objective being reduction of technical losses which may be appropriate for the Discos which have relatively low non-technical losses, but is not appropriate for those companies in which non-technical losses dominate.
The bank criticised the companies for not reflecting loss reduction targets in the PC-1, saying that the resulting loss reduction targets for such companies appear to be quite modest relative to the present level of losses, the sources quoted the bank adding that generally, the problems and the corporate priorities may have common elements across the companies, but are not identical and may - as they probably do - actually differ significantly. It is of serious concern that this diversity does not appear to be appropriately reflected in the project documents.
"Loss reduction targets do not appear always clearly indicated at the company level (they are given at the level of individual feeders). There may be also inconsistencies in the figures (losses, demand, etc) between the ELR and STG documents," the bank pointed out.
The bank also observed that often, only losses are valued or measured, but there were other important indicators which could be included, such as improvements in reliability and quality of supply, increased delivery of power, etc.
The bank has suggested that the Project Description Documents (PDD), to be prepared by the companies to describe their investment proposals for bank financing should adequately deal with these and other issues which have been shared with the companies. Especially important would be to refocus the project on reduction of total losses - not just technical - and adding both ''administrative'' and physical investment measures to achieve this objective.