ISLAMABAD: The World Bank and the Asian Development Bank differ on the quantum of the planned increase in power tariff, a senior official of the Ministry of Finance told the News.
If the ADB’s view is accepted, the government will have to increase power tariff by 20 per cent. The government will, however, have to increase power tariff by 10 per cent if the WB’s input is taken into consideration.
The two donor agencies also differ over working out a modus operandi to tackle the issue of huge deficit of Rs170 billion of the Pakistan Electric Company (PEPCO). The donor agencies have, however, not held out a helping hand to the government on the issue of power tariff hike as the stalemate between the Pakistan government and the IMF persists. The government is, however, hoping to get relief in the shape of deferment of an increase in power tariff that the IMF had asked for from April 1.
The World Bank has come out with a pleasant surprise on the issue of power tariff, as it has said that it would be sheer injustice to the people of Pakistan that the burden of a huge loss to the tune of Rs40 to 50 billion suffered by PEPCO is on account of line losses, theft, inefficiency and bad governance, but it be passed on to end-consumers in the shape of power tariff increase.
The World Bank, however, wants power tariff incased to bridge the gap between the generation cost and the tariff at which electricity is being sold to consumers.
On the other hand, the ADB is in favour of passing the loss on account of the PEPCO system on to end-consumer by increasing the power tariff. The government supports the stand of the WB.
The two donor agencies have come out with their inputs on the issue as the IMF Mission now visiting Pakistan wanted to take both the agencies on board before taking its position on the power tariff hike issue.
The official said that donor agencies had worked out PEPCO’s deficit at Rs170 billion as of April 12, 2010. Out of which a colossal loss of Rs40 to Rs50 billion have been detected on account of theft, line losses, inefficiency and bad governance. Rs55 billion have been fixed as subsidy which is feared to swell up to Rs75 billion by July-August of the next fiscal year. The remaining amount of Rs50 billion will be realised by increasing power tariff by 6 per cent from April 1 and a monthly raise to offset the impact of hike in furnace oil prices.
During the last two years, the government has increased power tariff by 60 per cent though the power generation cost is still Rs2.55 a unit higher than the current average power tariff at which electricity is being sold to end-consumers.
The official said that the generation cost stood at Rs8.82 a unit while it was being sold at the average cost of Rs6.27 a unit to en-consumers.
It was the Musharraf regime which played havoc with the power sector and did not increase the tariff even by a penny, particularly during the period from 2003 to 2007 knowing full well the fact that the difference was so high between generation cost and electricity rates for end-consumers.
During the fiscal 2004-2005, the official said, the generation cost of one unit was Rs4.21 a unit while it was sold at Rs3.98, leaving a gap of 23 paisas. In 2007-08, the generation cost increased to Rs6.53 a unit but the rate for end-consumers was at Rs5.38 a unit.
In 2008-09, the generation cost went up to Rs8.21 a unit against the selling rate of Rs5.22 a unit. In the 2009-10, the generation cost stands at Rs8.82 a unit that is still higher than the price of electricity for end-consumers that stands at Rs6.27 a unit even by increasing the tariff by 45 per cent in two years.
Source The News
No comments:
Post a Comment