Discos, gencos told to stand on their feet: no more subsidies from government

The power sector entities have been asked to act like private companies, as the government is unable to give subsidies indefinitely, official sources told Business Recorder.
This message was conveyed to the Chief Executive Officers (CEOs) of the distribution and generation companies (Gencos) in a recently held meeting, which was chaired by Minster for Water and Power, Liaquat Ali Jatoi. The meeting also discussed power sector reforms, restructuring, corporatisation, load-shedding and improvement of customer services.
Sources said that the Minister said that power wing of Water and Power Development Authority (Wapda), consisting of discos, National Transmission and Dispatch Company (NTDC) and generation companies(gencos), has now been placed under Pakistan Electric Power Company(Pepco), headed by the Managing Director.
"Wapda Chairman will no more be Pepco Chairman. Discos and gencos have been separated from Wapda and made independent, and now they must stand on their feet and act as private companies," sources quoted the minister as saying.
He was reported to have said that the companies would have to solve their financial problems themselves, and should no longer look towards the government for subsidies, as this facility could not be continued indefinitely. "Discos have the authority, but it must not be misused, and financial targets should be achieved by reducing load losses to the extent that they start showing the positive financial results," Jatoi said.
Pepco Managing Director Munawar Baseer Ahmad explained the ways and means to make the discos financially, technically and commercially viable. According to him, all targets could be achieved through load cycle management, energy conservation, load reduction and theft control. He said that workable policies for the measures to be taken would be made, and strict implementation schedule would be put in place to achieve the better results.
He said that through load management program, a target of 1900 MW saving for summer 2008 was being put in place, apart from other measures for revamping generation units. Additional capacity would be injected in the system to minimise the demand-supply gap of 1900 MW target.
Sources said that Pepco would also install a new system at the offices of CEOs and Ministry of Water and Power, which would display load position throughout the country.
They said that Pepco Managing Director and CEOs of discos asked the minister to clear the outstanding amount of about Rs 50 billion from the Finance Ministry due as differential tariff and other financial problems. They said that the minister assured them that he would hold a meeting with the officials of Finance Ministry for early clearance of the outstanding amount.