ISLAMABAD: Ministry of Finance (MoF) has agreed to release Rs 22.5 billion to the Ministry of Water and Power by Tuesday (today) for the supply of fuel to thermal power plants, which will be enough only for ten days till May 30, 2013. However, Minister for Water and Power termed the decision to allocate additional funds as inappropriate, saying it was not prudent for the government to print notes and pour into the deep well which has no limit.
According to an official statement, as decided by the Prime Minister, the Ministry of Finance will forthwith release Rs 15 billion for the provision of fuel while another sum of Rs 7.5 billion would also be released subsequently on immediate basis to generate additional power to further reduce the gap between demand and supply.
After the meeting caretaker Minister for Water and Power Dr Musadiq Malik revealed that Prime Minister, Mir Hazar Khan Khoso had also indicated an allocation of Rs 42 billion for June 2013 to deal with the power crisis. However, the Minister was unaware as to how the Finance Ministry would adjust Rs 22.5 billion in the federal budget as Ministry of Water and Power has already exhausted power sector's subsidy allocation in the federal budget for the entire year.
"You should ask the Finance Ministry from where and how it will arrange this amount. Finance Ministry on a number of previous occasions had expressed reluctance to release funds on the plea that this would fuel inflation. Expenditure in terms of subsidy is increasing," said the Minister. He maintained that Water and Power Ministry needed funds to generate more power aimed at minimising the miseries of the general public; but the Finance Ministry had to show economic integrity which was their prime responsibility.
In reply to a question, he however, admitted that allocation of additional funds for the power sector was no solution to this problem. "Allocation of funds is not the appropriate mechanism. We have to change the dimension of the economy. Poor should get subsidy but not all segments of society. The cost of electricity should be reduced from Rs 14 per unit to Rs 7-8 per unit through generation of cheap electricity," Malik added.
He said after the release of the amount, the fuel supply chain which was suspended would be restored. The Minister said it was the objective of the government to generate over 12000 MW of electricity to give relief to the masses.
Dr Musaddaq said out of Rs 22.5 billion, Rs 15 billion would be paid to PSO while the rest of the amount would be spent to operationalize the shut plants and arrange for diesel oil for four IPPs. He said Qadirpur gas well was going into an annual turnaround due to which gas supply to four companies would be suspended. However, on an emergency basis, diesel was being arranged for them at a cost of four to five billion rupees. In this way electricity generation of 800 MW would not be affected. He said Ministry of Petroleum had promised to complete the turnaround in maximum seven days. The Minister said efforts were being made to run the IPPs at full capacity.
To another question, he said the investment made in Jamshoro plant would increase its capacity by 150 MW. The Minister for Water and Power acknowledged that there was massive corruption and inefficiency in the Ministry as well as in the entire system, which was not acceptable. He said heads of some companies had been removed and it was his effort to bring in sincere, motivated and hardworking people.
He further said there were a number of non productive officials in the Ministry of Water and Power, adding that he had started dislodging the mafia in power sector and those officials who were enjoying additional chargee were being shown the door. Some media persons pointed out that Secretary Water and Power did not accompany the Minister to the press conference.
He said, during elections generation was 12,500 MW to 12,800 MW as the government supplied 19,000 tons of furnace oil and 150 MMCFD gas, adding that this indicated there was no issue of installed capacity. However, after the elections furnace oil supply reduced to 10,000 tons while gas, to 75 MMCFD, due to which generation plummeted.
The Minister said he randomly checked power distribution system and found that one day the entire District Sialkot was switched off, while another day half of Gujranwala was off and the third Ugi (KPK) was switched off. "I am trying to bring in new leadership in the National Power Control System (NPCC) to ensure fair distribution of power," he continued.
Answering another question, he said it was not appropriate for the caretakers to review the agreement with KESC which was being supplied 650 MW electricity strictly in accordance with the contract which was extended up to 2015 by the previous government. In reply to another question, he said his elected successor Khawaja Asif might have formulated a plan to significantly improve power generation.