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Express Tribune
14-05-2025
- Business
- Express Tribune
DISCOs fail to slash losses
The boards of all DISCOs have been reconstituted, except for Sepco and Hesco, where the process is being finalised. The boards are structured to ensure enhanced corporate governance, strategic oversight and operational efficiency. photo: file Listen to article Pakistan's economic managers have expressed serious concerns over the newly appointed boards of power distribution companies (DISCOs), which have failed to meet loss reduction targets. The Economic Coordination Committee (ECC), in a recent meeting, voiced grave concern that the targets assigned to DISCOs regarding reduction in transmission and distribution (T&D) losses had not been met. Specifically, the ECC members noted that the losses of Lahore Electric Supply Company (Lesco) had increased over the year. They stressed the need to adopt a robust plan to reverse the trend. The members of the economic decision-making body also underlined the need to make interventions to improve operations of the public power utility and slash losses. During discussions, the ECC was informed that boards of directors of all DISCOs, except for Hyderabad Electric Supply Company (Hesco) and Sukkur Electric Power Company (Sepco), had been reconstituted. It was also noted that under the oversight of the newly reconstituted boards, the entities had shown signs of improvement. The ECC was informed that Pakistan Power Management Company (PPMC), being the technical arm of the Power Division, was regularly monitoring the performance of DISCOs. In line with the National Electricity Policy, strategic roadmaps were formulated and signed in February 2025 by the respective chairpersons of the boards and the CEOs of all DISCOs. These roadmaps outline plans for T&D/AT&C (aggregate commercial and technical) loss reduction, bill collection, theft prevention, load-shedding management, consumer services, safety compliance, Scada implementation, GIS mapping, ERP system automation, computerised energy audits up to the distribution transformer level, execution of service-level agreements (SLAs) and operation and maintenance (O&M) framework. The Power Division briefed the meeting that to accomplish those objectives, a structured action matrix has been developed by DISCOs. This covers key initiatives such as feeder rehabilitation, distribution transformer addition/ augmentation, grid station expansion, capacitor installation, HT and LT line additions, transmission line upgrades, aerial bundled cable (ABC) deployment and advanced metering infrastructure (AMI) installation. In light of the directive issued in the ECC meeting held on April 11, 2024, the status regarding the governance of all DISCOs whose boards had been reconstituted, with a view to improving governance, was submitted to the ECC in the form of a summary under Rule 18(1) read with Rule 23(4) of the Rules of Business, 1973. Eleven DISCOs operate under the administrative control of the Power Division and are governed by the provisions of the State-Owned Enterprises (Governance and Operations) Act, 2023 and the State-Owned Enterprises (Operations and Management) Policy, 2023. The matters of boards of directors are also governed under the aforementioned law and policy. The boards of Faisalabad Electric Supply Company (Fesco), Islamabad Electric Supply Company (Iesco), Lesco, Multan Electric Power Company (Mepco) and Hazara Electric Supply Company (Hazeco) were reconstituted on July 24, 2024. Moreover, the boards of Gujranwala Electric Power Company (Gepco), Peshawar Electric Supply Company (Pesco), Quetta Electric Supply Company (Qesco) and Tribal Areas Electric Supply Company (Tesco) were reconstituted on August 31, 2024. Summaries for the reconstitution of Hesco and Sepco boards, with appropriate representation of independent and ex-officio directors as per relevant provisions of the State-Owned Enterprises (Governance and Operations) Act, 2023 and State-Owned Enterprises (Operations and Management) Policy, 2023, were submitted to the Prime Minister's Office. The boards of all DISCOs have been reconstituted, except for Sepco and Hesco, where the process is in the finalisation stage. The reconstituted boards are structured to ensure enhanced corporate governance, strategic oversight and operational efficiency. PPMC has implemented a monthly performance monitoring mechanism for all DISCOs, evaluating key operational, commercial and financial parameters. This framework ensures accountability and alignment with the sector's strategic goals.
Arab News
04-05-2025
- Arab News
Indonesian president inaugurates Hajj and Umrah airport terminal in Jakarta
JAKARTA: Indonesian President Prabowo Subianto inaugurated on Sunday a special terminal for Hajj and Umrah pilgrims at Jakarta's international airport, where travel will also be facilitated under Saudi Arabia's Makkah Route initiative. Indonesia, which has the world's largest Muslim-majority population, sends the highest number of Hajj and Umrah pilgrims every year. As pilgrims around the world have already begun to make their way to Saudi Arabia for Hajj this year, about 221,000 people will be coming from Indonesia. 'The government wants to give the best service for our pilgrims. We also understand that many of our pilgrims are seniors, and so we must take very good care of them,' Subianto said during the inauguration ceremony at Soekarno-Hatta International Airport. 'We understand that our pilgrims have saved up for a long time, and even waited for a long time, and so the government under my leadership will do our very best to give the best services and work hard to lower the cost of Hajj.' The airport's 2F terminal area, which has undergone renovations, has been transformed into a dedicated area for Indonesia's Hajj and Umrah pilgrims. It was developed to serve 6.1 million travelers annually, according to a statement issued by the Cabinet Secretariat. The launch event was attended by Saudi Ambassador to Indonesia Faisal Abdullah Amodi, as well as other Indonesian ministers, including Religious Affairs Minister Nasaruddin Umar and State-Owned Enterprises Minister Erick Thohir. Special counters for Saudi immigration, which are part of the Kingdom's Makkah Route initiative, have also been set up at the new terminal. The program launched in Muslim-majority countries in 2019 allows Hajj pilgrims to fulfill all visa, customs and health requirements in one place, at the airport of origin, and save long hours of waiting before and upon reaching the Kingdom. In Indonesia, pilgrims departing from the cities of Jakarta, Surabaya and Solo are benefiting from the Makkah Route initiative. 'As President Prabowo said, this is proof of the government's commitment to give the best service, especially for our senior pilgrims. He is also proud of the modern and comfortable facilities that have been set up,' Umar, the religious affairs minister, said on social media. Thousands of Indonesian pilgrims have begun to depart for Saudi Arabia, after the first Hajj flights commenced last Friday. Though the pilgrimage itself can be performed over five or six days, many pilgrims arrive early to make the most of the once-in-a-lifetime opportunity to fulfill their religious duty. In 2025, the Hajj is expected to take place on June 4 and end on June 9.
Express Tribune
27-02-2025
- Business
- Express Tribune
PRAL board starts amid violations
Listen to article The board of Pakistan Revenue Automation Limited (PRAL) – a key player in the government's Rs3.7 billion plan to modernise the information technology arm of the tax machinery – has started its work without first disclosing potential conflicts of interest or developing a code of conduct, a requirement under the law. The non-disclosure of conflicts of interest violates the State-Owned Enterprises (SOE) Act and the SOE policy – two legal frameworks developed with international financial institutions' assistance to improve governance in state-run entities. Sources revealed that the board has been holding meetings without first ensuring that newly appointed members have no direct or indirect conflicts of interest while making key policy decisions. The board is also responsible for overseeing the Rs3.7 billion PRAL restructuring plan. PRAL serves as the technology arm of the Federal Board of Revenue (FBR). The decision to proceed with meetings without first obtaining conflict of interest declarations from newly appointed members directly violates the SOE Act, SOE Policy, and the Companies Act 2017. The Express Tribune sent queries to PRAL Board Chairman Arif Saeed, FBR spokesperson Dr Najeeb Memon, and PRAL management regarding these violations. Only PRAL management responded, while the chairman and FBR spokesperson remained silent even after four days. "The management of the company is fully cognisant and strives to be compliant with all applicable legal requirements and obligations," PRAL stated in a written response. This suggests the board is operating in violation of the SOE law, which could result in penalties under the Companies Act. Sources said that after receiving the Express Tribune's questions, the PRAL board began drafting a conflict of interest policy. Under SOE policy, all directors and managers must sign a declaration upon appointment. This declaration confirms they have received and understood the policy on conflicts of interest. It also states they will not accept payments, bribes, favours, or inducements that could influence their decisions. Failure to comply could lead to their removal. The government recently appointed the PRAL board, which Finance Minister Muhammad Aurangzeb and FBR Chairman Rashid Langrial have praised as highly talented. The board is chaired by Arif Saeed, with independent directors including Salman Akhtar, Dr Muhammad Fareed Zafar, Ehsan Saya, and Nazish Afraz. The Express Tribune asked the chairman about the SOE policy's requirement for directors and managers to declare conflicts of interest. He was also asked about Section 34 of the SOE Policy, which mandates a code of conduct for PRAL board members. Additionally, the chairman was asked about Section 13 of the SOE Act, which defines the term of office for directors. Section 13(2)(f) states that a director can be removed for failing to comply with the SOE's code of conduct and conflict of interest requirements. No response was provided. Meanwhile, PRAL has decided to hire 50 data experts through a third party. Sources raised concerns that this could compromise data protection and privacy. A third party may not ensure the security of sensitive information. The Express Tribune also asked the board chairman if third-party hiring could put taxpayer data at risk. External firms may not be trusted with highly confidential information. Additionally, the chairman was asked whether board members were involved in the hiring process, which falls outside their policy-making role. He did not respond. In its most recent meeting, the PRAL board approved several measures. These include creating an operational unit for FBR's requirements, forming a dedicated data wing for analytics and governance, and assigning experts to validate Change Request Forms (CRFs). The board also created an Apex Committee for project approvals and structured software development teams based on project scope. A Data Governance Policy was implemented, and recruitment for a Chief Information Security Officer (CISO) and Chief Data Officer (CDO) began. The board also formed a committee within the FBR to streamline project prioritisation. Sources said board member Salman Akhtar suggested hiring third-party firms for technical expertise. PRAL has already invited bids for third-party hiring, with a submission deadline of March 4. In December, the federal cabinet approved a Rs3.7 billion supplementary grant for PRAL restructuring. Official documents show the estimated recurring cost for the next fiscal year is Rs4.5 billion. Government documents highlight that PRAL's restructuring is critical to improving the tax-to-GDP ratio. The board has a key role in this effort. According to the cabinet's decision, PRAL will receive a one-line budget, with its board approving the annual budget based on government grants and its own revenue. The restructuring has significant financial implications. The government will provide Rs3.7 billion for the current year, while recurring costs will reach Rs4.5 billion from 2025-26 onwards. Among the major components of the PRAL restructuring are enhancing software development and maintenance capabilities through three modes: in-house development, in-house maintenance only, and outsourcing development to third parties. The plan also includes upgrading hardware and data centres, replacing end-of-life equipment, and establishing an analytics hub.
Express Tribune
25-02-2025
- Business
- Express Tribune
Govt invokes nationalisation order
NIT, in which the government has only 8.9% shares, had offloaded its 23% shareholding in PECO, which the government termed illegal. photo: FILE Listen to article The bureaucracy is trying to take over management of a publicly listed company by invoking the "notorious" 53-year-old Nationalisation and Economic Reforms Order of Zulfikar Ali Bhutto that torpedoed the economy, revealed proceedings of a parliamentary committee meeting. In order to stop further destruction of Pakistan Engineering Company (PECO), the existing shareholders complained to Prime Minister Shehbaz Sharif and Special Investment Facilitation Council (SIFC) National Coordinator Lt General Sarfraz Ahmad, Arif Habib, one of the key shareholders, told the National Assembly Standing Committee on Privatisation on Tuesday. The State-Owned Enterprises (SOEs) Act empowers boards to appoint managing directors of government-owned companies but the government wants to exercise this right in case of a public listed company by invoking the Nationalisation and Economic Reforms Order of 1972, revealed Arif Habib, who owns a 25% stake in PECO. PECO affairs have to be managed under the Companies Act 2017. Then president Zulfikar Ali Bhutto had promulgated the Nationalisation and Economic Reforms Order in 1972 to nationalise industries. This is considered a key reason behind the destruction of Pakistan's private sector and it took 20 years before former prime minister Nawaz Sharif liberalised the economy. "I explicitly conveyed to the board of directors that the company's affairs have to be governed by Economic Reforms Order 1972," said a letter written by a joint secretary of the federal government. Pakistan had enacted the SOEs Act in 2023 as part of its commitments to the World Bank and the International Monetary Fund to free public sector companies from the clutches of bureaucracy and politicians. Habib said that he had taken up the matter with the prime minister and SIFC's Lt General Sarfraz Ahmad. On Tuesday, he also met Minister for Economic Affairs Ahad Cheema on the instructions of the PM. The hurdles created by the bureaucracy in smooth functioning of the economy and businesses were one of the reasons for setting up the SIFC – a hybrid civil-military body. Privatisation Commission Secretary Usman Bajwa said that the cabinet had decided in August last year to place Peco on privatisation list. PECO has been part of the privatisation programme since the 1990s and yet the small company could not be privatised, said Arif Habib. Bajwa said that until the issue of selling 23% shares by National Investment Trust (NIT) in the stock market back in 2003 remained unresolved, the entity could not be privatised. He added that in July 2023, the Cabinet Committee on Privatisation had set up a three-member secretaries committee to resolve the share sale issue but its report had not yet been finalised. The mentioning of just two examples – the 2003 alleged illegal share sale and the 2023 secretaries committee underscores the bureaucracy's attempts to maintain the status quo. The SIFC last month removed a federal secretary, who did not move a summary seeking permission of the Economic Coordination Committee (ECC) for export. NIT, in which the government has only 8.9% shares, had offloaded its 23% shareholding in PECO, which the government termed illegal. In 2004 – a year after the sale, Arif Habib bought those shares and he currently holds 25% shareholding. Usman Bajwa said that the Ministry of Industries had not provided clarity on the sale of 23% shares and "terms it an illegal transaction". "We are not proceeding with PECO privatisation until this 23% sale issue is resolved," he stressed. "People say Pakistan is not progressing. Can it progress when small issues like the sale of shares remain unresolved for decades," questioned Arif Habib. He mentioned that the National Accountability Bureau (NAB) conducted two separate inquiries on the sale of shares and gave the clean chit. "The government does not feel and raise the real issues the company is facing, which are either privatisation or its revival," said Arif Habib. There used to be a time when the company had 25,000 employees and the Chinese PM visited it in 1964, but now it has been restricted to two plots, he said. Habib pointed out that the government "appoints managing directors, who do not know the basics of PECO business". One MD did not even know the price of electric towers and sold them below production cost, he added. The financial crisis follows years of catastrophic mismanagement under former MD Mairaj Anis Ariff, a nominee of the Ministry of Industries whose tenure saw the company incur losses exceeding Rs1.2 billion, according to the board. Standing Committee Chairman MNA Farooq Sattar said that PECO could not be left in the current state of affairs and the Ministry of Industries should have proved its case before NAB. He told the Privatisation Commission to resolve all outstanding issues in the next 40 days. Sattar said that the government should find a solution to the payments owed by PECO. Arif Habib proposed that the government could recover its loans by selling one property located in Lahore. The government should also make a decision whether it wants to privatise PECO or revive it. Arif Habib called for setting up a garments city on the piece of land in Lahore. The company has a monopoly over manufacturing high-voltage transformers, provided it is revamped.
