Approval of Rs72bn project by Discos BoDs a must: CDWP bars PPMC from negotiating APMS project with ADB

ISLAMABAD: The Central Development Working Party (CDWP) is said to have barred Power Planning and Monitoring Company (PPMC) from negotiating APMS project with Asian Development Bank (ADB) sans approval of over Rs72 billion project by the Boards of eight DISCOs, well-informed sources told Business Recorder.

The decision was taken by the CDWP which met under the chairmanship of deputy chairman Planning Commission (DCPC).

Chief Energy (Power) MOPD&SI apprised the forum that objective of the proposed project is to establish real time access to 100 and 200kVA Distribution Transformers (DTS) for improved visibility, close monitoring and preventive actions. Besides, DT monitoring, APMS will record energy supplied and will be used to localize losses through energy accounting. Load disconnection mechanism as part of APMS solution will provide protection on LT side of 3 phase 100kVA and 200kVA general duty DTS against system overload and fault current.

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He pointed out that 134,413 Transformer Monitoring System (APMS - Asset Performance Management System) on General Duty Distribution Transformers are proposed in the PC-I. It will comprise of Smart Metering Device, GSM/GPRS Communi-cation Module, Current Transformers, Molded Case Circuit Breaker (MCCB) and enclosure for APMS unit. He further stated that the per unit cost of APMS is Rs457,888 and Rs543,658 for 100 kVA and 200 kVA DTS, respectively.

He said the original PC-1, at a cost of Rs61.163 billion, was previously discussed in a pre-CDWP meeting on March 31, 2023 and was returned for re-submitting an updated PC-1 after compliance of certain observations, mainly regarding techno-economic feasibility, alternative options of financing of project, the project’s contribution (DISCO-wise) in achieving the performance targets set by the regulator, ie, NEPRA, performance reports and lessons learned from other under- implementation projects of similar nature.

The Chief Energy (Power) informed the forum that since the PC-1 is uploaded on IPAS on June 25, 2024 due to paucity of time pre-CDWP/review meeting could not be held. As per inclusion of the PC-1 in the agenda of CDWP, the working paper was prepared with number of observations regarding feasibility, financing, and selection of technology and status of similar projects of EDEIP funded through the World Bank.

Keeping in view of the observations, Energy Wing submitted the proposed project for consideration of CDWP with the recommendations that Power Division may clarify whether it is advisable to make an investment of Rs72.203 billion while the government is mulling over a Concessional Model for private sector participation for eight DISCOs and Management Contracts for QESCO and TESCO.

The Power Division will validate the feasibility study carried out for the project by third panel of experts of international repute, considering huge cost of the project.

The Power Division will implement the project first in those DISCOs (on pilot basis), which are not going to be privatised in near future and Power Division will furnish certificate of the financial close of the project for timely completion of the project within stipulated implementation period of three years.

The CDWP directed Member (Energy) to hold a review/pre-CDWP meeting on the modified PC-1 and submit the modified PC-1 to CDWP meeting along with recommendations after consultation with stakeholders. The modified PC-1 was discussed in Review/pre-CD WP meeting held on June 27 and it was noted that the project is model based on the balance sheet of each DISCO along with its repayment mechanism. Further, Power Division may also confirm the suitability of the proposed investment as it will add to existing liabilities of the DISCOs.

The Power Division will furnish certificate of the financial close of the project for timely completion within stipulated implementation period of three years.

The chair observed that the project is of pivotal importance in reducing losses and improving operational efficiency. He endorsed the recommendations of Review/pre-CDWP meetings and observed that BODs of DISCOs should take ownership of the proposed ADB loan, and will confirm the investment’s suitability considering DISCOs’ privatisation. Additionally, the Power Division must submit financial closure certificates, bifurcate the umbrella PC-1 for 10 DISCOs, provide performance reports for previous projects, and submit a modified PC-1 for CDWP consideration. The chair also directed Power Division to submit a special monitoring/performance report of the EDEIP World Bank project already under execution.

After detailed discussion, the CDWP recommended the subject project for inclusion in PSDP and directed Power Division for compliance of the following: (i) existing umbrella PC-I for 10 DISCOs be bifurcated DISCO- 1. Techno-economic feasibility will be carried out and validated by Independent Panel of Experts; (ii) concerned BODs of respective DISCOs should approve their scope of work and take ownership for the proposed ADB loan and its repayment. PPMC cannot negotiate the loan without its consideration by respective BOD’s of DISCOs; (iii) Power Division will confirm the financial viability of the proposed investment (as it will add to existing liabilities of the DISCOs) keeping in view the impending privatisation/long term concessions of the DISCOs; (iv) Power Division will certify provision of sufficient funds, within its PSDP allocation, for timely completion of the project within stipulated implementation period of three years; (v) Power Division will submit performance report of installation of previous APMS under EDEIP WB Finance Projects for PESCO and MEPCO; (vi) Monitoring Wing of MoPD&SI will conduct inspection/monitoring of the WB project; and (vii) Power Division will submit a modified PC-1 for consideration of CDWP after compliance of directions/decisions.

Copyright Business Recorder, 2024