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Express Tribune
3 days ago
- Business
- Express Tribune
DISCOs seek recovery of billions
Listen to article Electricity consumers are expected to face a tariff hike in financial year 2025-26 under the multiyear tariff regime. A majority of power distribution companies (DISCOs) have submitted petitions to the power-sector regulator, seeking the recovery of billions of rupees from consumers to meet their annual revenue requirements. The National Electric Power Regulatory Authority (Nepra) will conduct a public hearing on June 13 in response to the petitions. All eight government-owned DISCOs have approached Nepra with requests for an interim tariff increase for fiscal year 2025-26. The petitions, under the multiyear tariff (MYT) regime covering the period from FY 2025-26 to FY 2029-30, have been filed by Gujranwala Electric Power Company (Gepco), Multan Electric Power Company (Mepco), Quetta Electric Supply Company (Qesco), Sukkur Electric Power Company (Sepco), Hyderabad Electric Supply Company (Hesco), Peshawar Electric Supply Company (Pesco), Tribal Areas Electric Supply Company (Tesco) and Hazara Electric Supply Company (Hazeco). The revenue requirements of these DISCOs show a significant financial burden for the upcoming fiscal year, which may be passed on to consumers. Mepco has sought the highest interim revenue requirement of Rs139.1 billion, followed by Pesco at Rs81.4 billion, Gepco at Rs67.8 billion, Sepco at Rs58 billion, Qesco at Rs50.1 billion, Hesco at Rs39.4 billion, Hazeco at Rs12.3 billion and Tesco at Rs7.3 billion. Mepco has also made a higher demand on account of operations and maintenance (O&M) cost at Rs63.1 billion, largely driven by staff pay and allowances of Rs22.3 billion, post-retirement benefits of Rs29 billion, and repair and maintenance expenses of Rs7.8 billion. Gepco reported O&M cost of Rs35.3 billion, including Rs16.6 billion for pay and allowances and Rs13.8 billion for retirement benefits. Pesco's O&M cost was estimated at Rs37 billion, with Rs32.7 billion alone allocated to salaries. Other companies also cited sizeable O&M allocations. Hesco claimed Rs25.1 billion, Sepco Rs22.2 billion, Qesco Rs17 billion, Tesco Rs3.8 billion and Hazeco Rs7.8 billion. Depreciation and the return on rate base (RORB) formed another significant part of the cost buildup. Mepco again topped the list with Rs8.9 billion in depreciation and Rs16.3 billion in RORB. Gepco followed with Rs4.8 billion in depreciation and Rs8.8 billion in RORB. Pesco sought Rs5.6 billion and Rs12.3 billion under the same heads, while Hesco demanded Rs3.2 billion in depreciation and Rs6.8 billion in RORB. Qesco's RORB was estimated at Rs15.7 billion alongside Rs297 billion for depreciation. Some power distribution companies have sought adjustments for prior years as well, which resulted in an increase in revenue requirements. Mepco claimed Rs59.5 billion, Pesco claimed Rs29.3 billion, Gepco sought Rs24.4 billion and Sepco requested Rs25.6 billion. Qesco and Hesco requested Rs16.3 billion and Rs5.8 billion, respectively, while Tesco and Hazeco did not include prior year adjustments. Tesco and Sepco also factored in bad debt provisions, with Rs1.6 billion and Rs5.6 billion respectively. Sepco also reported Rs1.6 billion in finance costs. To consider these petitions, Nepra has scheduled a public hearing on June 13 and invited all parties to submit their views and comments in response to the revenue requirements made by the distribution companies.
Express Tribune
13-03-2025
- Business
- Express Tribune
Rs12.4b disbursed to run tube wells on solar power
Listen to article The federal government has sanctioned Rs14 billion for running agricultural tube wells on solar power in Balochistan. According to the daily situation report submitted by the Quetta Electric Supply Company (Qesco), the government of Balochistan had disbursed Rs12.4 billion till March 1, 2025. Qesco has 50 active agricultural-dominated electricity feeders in Balochistan, where its total pending receivables stand at Rs564 billion. These matters were highlighted during a meeting of the steering committee on the conversion of agricultural tube wells into solar power, chaired by Deputy Prime Minister Muhammad Ishaq Dar. The meeting was attended by the chief minister of Balochistan, federal minister for power, additional secretary finance, secretary of the Power Division, chief secretary of Balochistan and secretary of the Energy Department, Balochistan. Participants of the meeting took stock of the progress made on the government's initiative to convert agricultural tube wells into solar energy in Balochistan. It was informed that a sanction order for Rs14 billion was issued by the federal government to the administration of Balochistan on February 4, 2025. By March 1, according to the daily situation report of Qesco, the government of Balochistan had disbursed Rs12.4 billion. A total of 4,539 connections, 2,378 poles and allied materials, and 2,626 transformers were retrieved, resulting in a load reduction of 67.4 megawatts from the tube wells, the meeting was apprised. It was pointed out that there were 27,437 subsidised agricultural tube wells and 10,263 illegal tube wells in Balochistan. Qesco has 50 active agri-dominated feeders, with pending receivables of Rs564 billion. As per the initiative, a compensation of Rs2 million is being provided for each tube well subject to disconnection. This cost will be shared by the federal government and the Balochistan administration with a ratio of 70:30. It was highlighted that a third-party verification of conversion into solar energy would be conducted. The chair showed concern over slow implementation and urged the government of Balochistan and Qesco to fast-track the project. For a long time, the federal government has been facing the problem of circular debt accumulation in the power sector that has choked the entire energy chain. Balochistan has also contributed to the circular debt because of failure of the agriculture sector to pay its bills. To cope with the challenge of fast rising energy sector debt, the federal government is shifting agricultural tube wells to solar energy in Balochistan.
Express Tribune
12-03-2025
- Business
- Express Tribune
Gwadar still has no water and power
Listen to article Ten years after launching the China-Pakistan Economic Corridor (CPEC) and holding 78 progress review meetings, it again emerged on Tuesday that the jewel of the multibillion-dollar initiative, Gwadar, could not shine because it neither has sufficient clean water nor indigenous electricity. The 78th CPEC progress review meeting was not different from dozens of such meetings held in the past where aggressiveness was shown over the lack of progress and new deadlines were set to fulfil obligations under President Xi Jinping's Belt and Road Initiative (BRI). Federal Minister for Planning Ahsan Iqbal chaired the review meeting on CPEC. He expressed dissatisfaction over delay in ensuring national grid connectivity for Gwadar and directed the Quetta Electric Supply Company (Qesco) and the Power Division to submit an updated progress report within five working days, according to a statement issued by the Ministry of Planning after the meeting. In the last review meeting held about two months ago in January, Ahsan Iqbal had sought a compliance report within one week to connect Gwadar and its free zone with the national electricity grid. The city, having strategic importance in the CPEC framework, is energised by importing electricity from Iran. Pakistan has surplus electricity and pays over Rs2.1 trillion in idle capacity charges to power producers by collecting Rs18 per unit from consumers. But it does not have the right set of policies for electricity supply through laying transmission lines. In the last meeting, Iqbal had also instructed Qesco and the Power Division to coordinate with the Gwadar Port Authority and Pakistan Navy for immediate provision of electricity and the energisation of Gwadar Port and South Free Zone. The minister directed in January that the outstanding issues should be addressed and resolved subsequently. He also sought an updated progress report within five working days on the status of power supply to Gwadar from the national grid, according to the ministry. The Power Division apprised the meeting that the Cabinet Committee on Energy, in its recent huddle, had approved a new policy for the provision of bulk electricity to the Special Economic Zones (SEZs) at a single point through an operation and maintenance contract between the respective developer of SEZs and power distribution companies (DISCOs). The planning minister emphasised that the new policy should incorporate all zones including the SEZs, Export Processing Zones (EPZs) and Gwadar Free Zones. But his instructions were ignored. The planning ministry stated on Tuesday that Ahsan Iqbal voiced deep concern over the non-operationalisation of a desalination plant in Gwadar and emphasised the urgent need for supply of clean drinking water. He directed that immediate action should be taken within the week to resolve the issue, said the ministry. China had provided equipment and demonstration stations from May to December last year for the provision of electricity and clean drinking water. The meeting was told that 10,000 solar panels were delivered in May 2024, followed by another 5,000 in September, under a grant-in-aid programme. Furthermore, drinking water supply equipment, including 150 water filtration plants and 10 tube well solarisation units, arrived in August 2024. However, their distribution and installation were yet to be carried out, the meeting was told. Expressing serious concern, Ahsan Iqbal directed the Ministry of Food to formulate a comprehensive plan within three days for efficient distribution of the equipment provided by China. He told the ministry to convene a meeting with all provinces and submit a formal plan within two days on how those machines would be used. Pakistan had earlier proposed the utilisation of Gwadar Port as a transshipment facility but it was not able to provide basic facilities. CPEC progressed smoothly till the seventh Joint Cooperation Committee (JCC) meeting and after that six more meetings have been held since 2017 but no breakthrough could be made. The planning ministry stated on Tuesday that the meeting reviewed preparations for the upcoming 14th JCC meeting, with China confirming its support for holding the session in July 2025. All working group meetings have been scheduled for March and April to ensure comprehensive preparations. Ahsan Iqbal directed that meetings of all working groups, particularly the working groups on safety & security and science & technology, should be scheduled at least one month prior to the JCC meeting. Furthermore, he stressed that the Pakistani mission in Beijing should actively follow up with the Chinese side to ensure that the meetings were arranged in accordance with the agreed calendar. The minister told Pakistan's diplomatic mission in Beijing and the Economic Affairs Division to engage with the Chinese authorities to finalise a date for the visit of technical and financial experts to Pakistan. A representative of the Ministry of Railways said that the Joint Technical and Financial Working Group meeting was held on January 16, 2025, during which both sides discussed the technical and financial aspects of the Karachi-Hyderabad section of Main Line-1 (ML-I) project. Moreover, the Chinese side conveyed that they were in the process of finalising the composition of the Technical and Financial Working Group, which would visit Pakistan soon to resolve all pending issues related to the Karachi-Hyderabad section. Iqbal directed the mission in Beijing and the Economic Affairs Division to follow up with the Chinese side to ensure the early visit of the working group on the second phase of CPEC, which focuses on green corridor developments.
