July 19,2002

Islamabad:Consumer Rights Commission of Pakistan (CRCP) has slammed the average increase of 40 paisa per kwh in electricity tariff. It said the decision indicated that the powers of NEPRA to impart independent decisions had been undermined by the government and international donor agencies. Reportedly, the Ministry of Finance has influenced the NEPRA decision because it had committed to the international lending agencies for electricity tariff increase beyond 50 paisa per unit. The government has not ceased to play its undue role in determination of tariff, CRCP added.
CRCP general secretary Mian Abrar Hafeez said that raise in power tariff was allowed to WAPDA despite its known inefficiency, mismanagement and corruption. He told that CRCP had highlighted in its presentation before NEPRA in the public hearing of the tariff petition a number of domains where WAPDA could reduce its cost considerably to plug its financial gap of Rs 55.5 billion. The energy losses of WAPDA were 27.3% in the FY 1999-2000 and 25.5 % in the FY 2001-02, while one percent reduction in losses amounts to a saving of about Rs. 2,407 million. It has repeatedly failed to reduce its losses according to the previous recommendations of the Authority, which had recommended a reduction in losses from 27.3 percent to 25 percent during the FY 2000-01. The Operation and Management (O & M) cost of WAPDA in FY 2003 was projected very high, which was not commensurate with the inflation rate. In addition, WAPDA not only gives 4% of its total units produced to its employees free of cost, but has also given one month’s salary as a bonus to its employees, which establishes that WAPDA does not deserve increase in power tariff. He said CRCP was not expecting such decision by NEPRA in view of the inefficiencies of WAPDA and its failure to comply with directions of the Authority for the last three years.
Mian Abrar Hafeez, while reflecting on the raise in power tariff said that it would adversely affect the life of poor people for whom the utility charges have already become unbearable. The current increase to the tune of an average 15 per cent for domestic consumers, 9 percent for industrial, 1 percent for commercial and 18 per cent for agricultural tube-wells is considerably high. He said that about 10 million residential consumers using more than 50 units per month would be affected by the rise. In addition, the consumers of Karachi Electric Supply Corporation would also suffer because the rate of power to be purchased by KESC would also meet 40 paisa per kwh increase.
CRCP believes that the current decision is not in line with the spirit of independent regulatory mechanism as NEPRA has been exposed to pressure by the government. CRCP has vowed to approach NEPRA for the revision of its decision.