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WAPDA to be privatised in four phases.

Q. What new projects are likely to be commissioned in 1993-94.

A. Alive to the need of meeting evergrowing power demand, particularly in the present scenario of rapid industrialisation and rural electrification as envisaged in the priorities of the elected government, WAPDA is making all out efforts to implement the ambitious programme of enhancing its generation capacity and transmission facilities to transport additional power to the load centres.

Under this programme, 21 new hydel and thermal power units are under execution with a total capacity of about 3400 MW. Out of these, if no financial constraints hinder in the way of their completion as scheduled, 11 units are likely to be commissioned during July 1993-June 1994 period. These include Mangla Unit No. 9 and 10 (100 MW each), Tarbela 13 & 14 (432 MW each) on the hydel side and Muzaffargarh 1 & 2 (210 MW each) Guddu Combined Cycle Unit No. 9 (100 MW) Lakhra coal-based units 1 & 2 (50 MW each) and additional Combined Cycle steam units at Faisalabad and Kotri Gas Turbine Power Stations (40 MW each) on the thermal side.

In transmission area, over 1300 KM EHV transmission lines are likely to be commissioned. These include 500 KV extra high voltage transmission lines between Lahore and Tarbela, Faisalabad and Lahore (2nd circuit), Guddu and Multan (3rd circuit), 220 KV transmission lines from Sibbi to Quetta (2nd circuit), Multan to Muzaffargarh, Daud Khel to Peshawar, Mangla to Gakhar etc. will be completed and commissioned. The 220 KV Peshawar grid station will also be upgraded to 500 KV capacity during 1993-94. In addition, 23 new 132 KV grid stations and over 600 KM of the high voltage transmission lines will also be added in the system.

Q. How much amount WAPDA is likely to attract through the floatation of 5th Issue of WAPDA Bonds?

A. The target of 5th Issue of the WAPDA Bonds series is Rs. 5.6 billion. The yield is 16 per cent per annum, payable every six months. All the individuals and corporate bodies including banks are eligible to invest in WAPDA Bonds. It is a considered opinion of the financial experts that in view of every attractive features of the 5th Issue and past experience of over subscription to the previous four issues, we will once again be able to achieve the target.

Q. What is the track record of your previous four WAPDA Bonds issues?

A. The track record of the previous four issues speaks of the confidence reposed by the investors in WAPDA's financial viability. The First issue was subscribed to the tune of Rs. 3.1 billion, i.e. 55 per cent more than the target of Rs. 2 billion. Second issue also fetched Rs. 5.63 billion against the target of Rs. 5 billion. Third issue was also heavily oversubscribed and Rs. 6.84 billion or 75 per cent over and above the target of Rs. 5 billion were invested in the issue. The Fourth issue was floated for only Rs. 1.1 billion as per our requirement and this issue was also subscribed to the extent of Rs. 1.43 billion. The First issue, I may mention, has already been redeemed on completion of its 5-year maturity period in January-February this year and the principal amount paid back to the subscribers. I may add that WAPDA has so far paid over Rs. 6.45 billion to the holders of previous four bond issues which shows a good track-record.

In aggregate, the funds of Rs. 17 billion generated through the previous four issues were invested in a number of new power generation and transmission projects whereas the subscribers reposed confidence by investing in the bond issues, WAPDA, in its turn, fulfilled the commitment. The WAPDA Authority is thankful to the investors in its bonds for their esteemed cooperation and contribution which helped us in meeting the rupee cost of our power development projects to enhance the generation capacity and minimise supply-demand gap as well as loadshedding.

Q. According to plans, WAPDA is due to be privatised in four phases by 1996, with a view to decentralizing the organisation into autonomous units and allow them to run on competitive market mechanisms. Whether privatisation policy will be pursued under the regime?

A. Strategic plan for privatisation of WAPDA prepared by the consultants has been approved in principle. The modalities and other matters associated with the privatisation policy of WAPDA are being sorted out by the Government. It will now be taken up in the Council of Common Interests for approval with the consensus of the federal units.

Q. Private sector power projects are non-starter. Are you satisfied with the progress of private sector power projects?

A. It is not correct to say that the private sector power projects are non-starter. Initially there were some problems due to lack of institutional framework. But with overcoming the problems, ground-breaking ceremony of 1292 MW Hub River Power Project in Balochistan province has already been performed and starting installation of the project by a foreign consortium of XENEL/HSPEL (Private) Limited.

Q. What is the tentative date of completion of the Hub River Power Project?

A. Schedule commissioning date of first 323 MW unit of the project is February 1996. This will be followed by coming into commercial operation of next three units (323 MW each) one after the other with an interval of three months each, thereby completing the project by November 1996.

Q. What are the power projections for 1993-94. Will you be able to meet the targets?

A. Based on the anticipated demand growth rate, it has been estimated that in the first month of the year 1993-94, demand for power in WAPDA system will be about 6930 MW and towards end of the financial year, the demand will be nearly 7340 MW in the month of June 1994. In the middle of the financial year, i.e. in the winter month of January, the projected demand will be around 7280 MW.

Apparently, based on the studies of generation and system conditions, transmission and transformation constraints prevailing at various intervals during the financial year, there could be a supply-demand gap of nearly 600 MW in the July-September 1993 period, thereafter a shortfall of about 1200 MW is anticipated in the month of January due to decreased hydel generation because of the yearly phenomenon of canal closure for maintenance and repair purposes. In May-June 1994, the supply-demand gap could range between 250-300 MW which can be met through load management measures. As such, scenario of meeting targets of the projections in 1993-94 is not gloomy. However, load flow studies are currently being carried out to determine the factual position keeping in view system constraints and stability limits at various stages in 1993-94.

Q. Transmission and distribution losses during the year 1992 were at 21.2 per cent as compared to 20.8 per cent in 1991. Have you any new plan to control the menace of widespread power theft?

A. WAPDA has been able to reduce the technical losses in the system from 38 per cent in 1977 to 21 per cent in 1991-92 through various management measures. The 500 KV extra high voltage transmission system is being augmented by additional lines between Tarbela and Lahore, Faisalabad and Lahore, Guddu and Multan etc. which are likely to further reduce the transmission losses. The distribution losses remained constant as 11.9 per cent in 1991 and 1992 including the element of power theft. Various measures are underway to further reduce the technical losses.

Transmission: The commissioning of under execution 500 KV lines in 1993-94 will help reduction in the technical losses in transmission. For this purpose, the capacity of overloaded power transformers at various grid stations is being carried out and steps are also being taken to improve efficiency of the transmission lines.

Distribution: On the distribution side, to further reduce the technical losses, new feeders are being erected to relieve the already overloaded feeders, the existing feeders are being augmented by replacing the wires with larger size conductor, fixed and variable conductors are being installed on 11 KV and LT lines to improve their power factor, new faultless and fool proof meters are being installed to replace the defective and poor standard old meters at the consumers' premises.

Power Theft: There is no such an alarming condition prevailing in the WAPDA system as alleged. The element of power pilferage or unauthorised usage of electricity in the system is only 3-4 per cent. This comes under administrative losses which have already been trimmed down to a great extent through various measures including direct transmission lines from grid stations to the industrial units, taking consumers' meters outside their premises etc. Surveillance teams from WAPDA headquarters and the Area Electricity Boards also go out for inspections in the field and carry out raids under scheduled programmes to further reduce the unauthorised usage of power which is a social evil.

Q. Increase in power rates appears to be inevitable. What further increase in power rates is anticipated in the current year?

A. Firstly, I should make a mention of the fact that power rates are not increased unilaterally by WAPDA. This is subject to the approval of the Government of Pakistan. The federal government and WAPDA have committed with the international lending agencies to self-finance WAPDA's Annual Development Programme to the extent of 40 per cent. The WAPDA tariff is, therefore, to be maintained at the level which could generate funds to the desired extent. There has been no revision in WAPDA's tariff since April 1, 1991. For the current year (1992-93), WAPDA required some tariff increase which was not allowed. As the financial year is coming to its end, there is no likelihood of any tariff increase during the current year.

Q. What steps have been taken to increase efficiency of your various operations?

A. Chances of improvement in any system are always there. The process is a continuous one. Measures have been taken in the past and are being taken even now to improve the efficiency of various operations of WAPDA. For example, on the power generation side, we are putting up more combined cycle units at Guddu, Kot Addu, Faisalabad, Kotri to utilise the hot exhaust of the thermal units to generate more power without any additional cost on fuel. In the transmission area, augmentation of the overloaded transformers is being done at various grid stations and efficiency of high voltage transmission lines is being improved through various measures. Special T&P and spares have been arranged to take timely action and improve preventive measures. Live line maintenance of extra high voltage (500 KV) lines is being done for the first time in Pakistan. This avoids shut-down of the lines and makes periodic checks possible without resorting to interruption of supply which would, otherwise, have stopped flow to bulk power from big power stations located in the north and south of the country to the load centres. This also saves WAPDA from suffering revenue loss due to the shut-down and suspension of power supply on the transmission lines.

Vigilance of surveillance teams at the Division level, monitored by Director General (Surveillance) at the headquarters and the Chairman, Area Electricity Boards level in checking different categories of consumers, stress on maintaining rise and fall consumption register, particularly in respect of bigger consumers, surprise raids by inspection teams for arresting unauthorised usage of electricity at consumers' premises, replacement of defective and poor quality old meters by faultless meters, financial incentives for tehsildars (recovery officers) for effecting recoveries from the defaulters are some of the measures to improve efficiency on the distribution side. WAPDA is also implementing a hectic Energy Loss Reduction Programme (ELR) besides installation of capacitors on 11 KV lines.

The ELR programme is being implemented with the financial assistance of ADB and USAID. The ADB financed ELR project involves rehabilitation of 9276 KM of 11 KV and 35,000 KM of LT feeder all over the country for which WAPDA has been granted two loans amounting to 158 million US dollars by the bank. Out of over 9400 approved work orders, nearly 4,000 have already been completed.

The USAID-assisted ELR scheme to the extent of 23 million dollars, envisages rehabilitation of 250 11 KV feeders, installation of over 400 capacitors on the feeder lines, replacement of 90,000 defective meters etc. Under this scheme, all the 11 KV capacitors have already been installed on the feeder lines and hundred per cent work on replacement of the defective meters has been completed. In addition, 218 or 87 per cent of the envisaged 11 KV feeders have also been rehabilitated. The work is in progress to complete this scheme. WAPDA is also proposing commercialization of its units for improved efficiency and transparency of profitability of individual units.

Q. Will you be able to implement the 33 power projects during the 8th Plan envisaging to increase the power generation capacity by 6645 MW?

A. The 33 power generation units indicated in the 8th Five Year Plan in the given table include 27 schemes of WAPDA. I feel pleasure in telling that out of these, four units - i.e. Tarbela hydel units 11 and 12 (864 MW) as well as Guddu Gas Turbine Units 7 and 8 (270 MW) have already been completed and commissioned. Tarbela units 12 and 14 are also likely to come on bar by end of the current calendar year. The remaining 21 hydel and thermal units of WAPDA envisaged to be implemented during the 8th plan period, with a total capacity of about 2000 MW will hopefully be commissioned as scheduled, if no financial constraints come in the way of their completion on time. A scheme involving a four units of 1292 MW in the private sector being implemented by XENEL/HSPEL group are also expected to come up as scheduled.
Sr. Unit
No. Station Name No.

 1. Tarbela 11
 2. Guddu gas turbines 7
 3. Guddu gas turbines 8
 4. Tarbela 12
 5. Lakhra Fluidized Bed 1
 6. Mangla 9
 7. Muzaffargarh Steam 1
 8. Lakhra Fluidized Bed 2
 9. C.C. at Faisalabad 9
10. C.C. at Kotri 7
11. Mangla 10
12. Tarbela 13
13. Tarbela 14
14. C.C. at Guddu 9
15. Lakhra Fluidized Bed 3
16. Muzaffargarh Steam 2
17. Muzaffargarh Steam 5
18. Kot Addu Comb. turbines 13
19. Muzaffargarh Steam 3
20. Kot Addu Comb. turbines 14
21. Muzaffargarh Steam 6
22. C.C. at Kot Addu 15
23. C.C. at Kot Addu 11
24. C.C. at Kot Addu 12
25. Muzaffargarh Steam 4
26. KESC Steam BQP - 6
27. XENEL/HSPEL (Pvt.) Pvt - 1
28. Addl. Quetta G.T. 1 & 2
29. XENEL/HSPEL (Pvt.) Pvt - 2
30. XENEL/HSPEL (Pvt.) Pvt - 3
31. XENEL/HSPEL (Pvt.) Pvt - 4
32. Jamshoro Oil Fired 5
33. Chashma Low Head 1 - 8

Q. How long the loadshedding will continue?

A. We in WAPDA want to eliminate loadshedding problem, which is due to supply-demand gap for a few weeks during the year, tomorrow if not today. This is in the interest of WAPDA which is an autonomous commercial organisation rested with the responsibility of chalking out its own Annual Development Programme, funding it from its own resources as it is out of the Annual Development Programme of the Government of Pakistan since 1987. WAPDA does not want to lose its revenue from the sale of power due to loadshedding. It also does not like to put the progressive industrial and agricultural sectors under the constraints.

But the problem is that WAPDA is facing multipronged difficulties in implementing its development projects ready for execution in its Master Plan upto the year 2018. The major difficulty is the finances. The consumers owe WAPDA over Rs. 10 billion of arrears i.e. cost of electricity sold to them and already consumed by them. Much of the arrears are due to the federal and provincial government organisations and departments and the civic bodies. Now a days, we are carrying out the recovery campaign and disconnecting the premises of the defaulters. But, as you will appreciate, there are certain sensitive areas, power supply to which can not be disconnected in the national interest. However, we are making all out efforts to recover the arrears. With the amount of over Rs. 10 billion, I may mention, we can add about 600 MW thermal generation capacity in the system. This alarming size of arrears is also posing problems in receiving the committed foreign exchange loans from the international donor agencies like World Bank and Asian Development Bank.

Secondly, the unprecedented demand growth rate of 8-10 per cent per annum. which is due to socio-economic development emerging up in Pakistan, is also a factor in our lagging behind to match the fast growing and ever-increasing demand for the past many years. The reason of this lacking is again the financial constraints as WAPDA in the past 10-12 years was given or allowed to finance in the range of 40-60 per cent less than its requirement.

One thing more I would like to point out that the habit of spend-thriftness prevailing in our society as a status symbol or not paying heed to the savings is causing higher consumption of precious electric power resources more than what is needed. Keeping in mind that "one kilowatt saved is one kilowatt generated", over 80 lakh consumers of WAPDA by adopting the habit of avoiding extravagant use of electricity and using power when and where required, can have hundreds of megawatts. This, in turn, will be helpful in meeting the demand for power by WAPDA and minimising demand-supply gap. This will also go a long way in saving WAPDA from forcing it to adopt the measures of compulsory saving or loadshedding, and the consumers also will have the benefit of cutting down their monthly electricity bills.
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Title Annotation:Special Section: Power Generation; interview with Pakistan's Water and Power Development Authority Chmn. Mumtaz Hameed
Publication:Economic Review
Article Type:Interview
Date:Jun 1, 1993
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