ISLAMABAD: The World Bank has indentified bottlenecks in Electricity Distribution Efficiency Improvement Project (EDEIP) and asked power Distribution Companies (Discos) to accelerate implementation of the corrective measures on the weaknesses identified by the Implementation Support Mission (ISM) on August 26-September 11, 2024.
In a letter to Secretary Power Division, Operations Manager (Pakistan), Gailius J Draugelis appreciated Ministry of Energy (MoE), Power Division, and the participating electricity distribution companies (DISCOs), namely Hyderabad Electric Supply Company (HESCO), Multan Electric Power Company (MEPCO) and Peshawar Electric Supply Company (PESCO) for assistance and support provided to the World Bank’s Implementation Support Mission.
The mission’s objective was to support the Power Division and the DISCOs to expedite the project implementation and preparation of a project additional financing.
PSP in Discos: World Bank stresses setting up PIU
According to the Bank, the project is at a critical stage of implementation. Although the project made good progress recently, it is significantly behind the original schedule with only 3.6% of the fund disbursed after three years.
It was agreed during the mission that the project will have at least $90 million in commitments and $20 million in disbursements by June 2025.
To achieve these targets, the Power Division and each DISCOs agreed to implement a Project Enhancement Action Plan (PEAP) with realistic targets/milestones, key activities, required resources and monitoring mechanism, which is being prepared with support from the World Bank. Progress of the PEAPS will be reviewed on monthly basis to ensure they are implemented as scheduled.
The priority key actions agreed upon during the mission include: (i) The PEAP will serve as a tool to assist the implementing agencies in expediting the project implementation through setting specific targets and milestones, identifying bottlenecks/pending issues and measures to eliminate those obstacles, key activities and required resources, and effective monitoring and evaluation mechanism.
As next steps: Power Division and the DISCOs to complete the PEAP for implementation by November 30, 2024; (ii) conduct monthly Project Implementation Progress and PEAP reviews; and (iii) Enhancing Capacity of PIU. Capacity of PIUS remains a key bottleneck of the project leading to delays in project implementation.
Delays in hiring Project Implementation and the Management Support Consultant (PIMSC) and the departure of key PIU staff as well as their frequent turnover exacerbated the PIU capacity constraints.
As to next steps: (i) sign contracts with all PIMSC and submit PIMSC’s working plan by November 30, 2024; (ii) avoid unnecessary changes of PIU’s staff, recruit/assign qualified staff for key positions and vacant positions; and (iii) conduct training on procurement and environmental and social (E&S) aspects in November 2024. A comprehensive capacity building program shall be developed by the PIUS.
Procurement Enhancement: The project has experienced significant delays in procurement with most of the packages being yet to be started or being behind on schedule.
The constrained capacity of the PIUS and internal prolonged review processes within DISCO’s are cited as the main reasons causing these unnecessary delays. To sort these delays: (i) effectively mobilize PIMSC to assist in procurement; (ii) streamline the internal reviews and increase delegation of decision making to DISCO’s CEOs and Head of PIUs; (iii) review the current procurement strategy/packaging and prioritize on-going and large contracts; and (iv) timely and proper handling of received complaints.
On Environment and Social (E&S) Aspects, the Bank said that location of new substations has been confirmed. The DISCOs should complete the technical design, RAP, E&S instruments, and land acquisition.
The mission noted that under some activities, E&S management plans were not fully reflected in bidding documents implying a risk of noncompliance of the contracts. The Bank has asked the authorities to complete RAP and E&S instruments of new substations by December 15, 2024, and start the land acquisition, review to ensure E&S requirements be adequately included in bidding documents and evaluated during bid evaluation.
The government also requested the World Bank to consider an Additional Financing (AF) of $50 million to support the rollout of an Asset Performance Management System programme at PESCO and HESCO.
The APMS is prioritized by the Government to enhance performance of the DISCOs consistent with the EDEIP’s development objectives.
The Bank noted that to consider this request it will be important for the project to demonstrate enhanced progress in terms of commitments and disbursements as well as procurement and institutional capacity, advising the DISCOs to commence the preparations for the procurement of APMS.
Power Division/Discos have been asked to: (i) Submit the request for AF to the World Bank by November 30, 2024; (ii) submit a matrix demonstrating progress in terms of disbursements and commitments for FY25 by November 30, 2024; and (iii) draft procurement plan and draft bidding documents of the APMS to be submitted to the World Bank by December 15 and 30, 2024, respectively.
Copyright Business Recorder, 2024
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