The Power Division has decided to avail a $ 900 million loan from Asian Development Bank (ADB) for the smart metering project designed to introduce advanced infrastructure in power Distribution Companies (Discos), rejected by the Abbasi-led government on the plea that it was a pre-conceived project designed to benefit one company, well informed sources told Business Recorder.
ADB approved the first tranche of $400 million in November 2015 and thereafter urged Pakistan to implement the Advanced Metering Infrastructure (AMI) project in the jurisdiction of Islamabad Electricity Supply Company (IESCO) in the first phase, but the project was resisted by the Ministry of Power and the Planning Commission and the bidding process halted in January 2018 as bids were received but not opened.
Secretary Power Division, Irfan Ali told Business Recorder: "I don''t understand why the former government did not go for the smart metering project. When this project was brought to my notice, I held a meeting with the senior Vice President of ADB and my determination was that this project should be implemented."
According to Secretary Power, the second meeting on the project was presided over by Power Minister, Omar Ayub who decided to go ahead with it. "Nobody wrote the reasons for halting the project in the file. We are in favour of this project," Secretary Power maintained.
Ali further said that such pilot projects which involve new technology require a clear concept and stated that the Power Division will ensure transparency in the project.
He said initial funding will be of $ 400 million for Lahore Electric Supply Company (Lesco) and Islamabad Electric Supply Company (Iesco). The remaining amount will be spent in high loss areas of other Discos. In addition, Pakistan has also discussed this project with China, and requested assistance for launching it for Pesco, Sepco, Hesco and Qesco.
The country is already paying 0.25% commitment charges on the $380 million component of the first tranche of $400 million. The $380 million loan had been contracted on commercial terms.
"The Minister is absolutely correct in going for this project," he maintained.
Another official said that Power Division had differences with the ADB on communication network with one local company. However, ADB has now agreed to remove that clause which was meant to benefit one company and it will now be open bidding.
Secretary Power Division further stated that he would take the Boards of Discos into confidence prior to signing the agreement with ADB. In addition, Economic Affairs Division will also be taken on board in this regard. He said Power Division has started a drive against power theft through task forces which will be initiated from Lahore on Saturday (today). He said action is also being taken against corrupt officials of Discos.
The project concept was that pre-paid electricity meters will be installed that will control the flow of electricity and ensure 100% collection of bills. The main goal of the $400 million project was installation of 2 million smart meters and communication equipment in these two power distribution companies.
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