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Govt announces 22pc hike in power tariff
By Mehtab Haider
ISLAMABAD: The government on Saturday announced for the first time publicly to increase power tariff by 22 per cent in three phases, which will be in real term standing at around 25 per cent with compound effect in current fiscal year to generate Rs 55 billion in line with an agreement struck with the WB and ADB.
Yes, we will raise power tariff in the range of 10 per cent on October 1, 2009, 5 to 6 per cent on January 1, 2010 and 6 per cent on April 1, 2010 in line with the agreement with the World Bank and Asian Development Bank, Additional Secretary, Ministry of Water and Power, Zarar Aslam, said while briefing reporters here on Saturday.
With the announcement of hike in power tariff by 22 per cent, the prices of electricity will go up by around 25 per cent with compound effect as every raise will be given on overall prices of electricity.
Zarar Aslam, who is also official spokesman for the Ministry of Water and Power, said the power generation cost stood at Rs 8.25 per unit while the government was charging average Rs 5.75 per unit from the consumers so this gap could either be bridged through provision of subsidy or hiking the power tariff. To a query about power outages, he said the country was currently facing power deficit of 4,000 MW and all-out efforts were going on to scale it down immediately. He said the Mangla power plants would be made fully operational by July 25, 2009 as currently only 200MW electricity was being generated against its capacity of 1100MW from 10 installed plants.
On construction of Diamer-Bhasha dam, he said the World Bank was not going to provide financial assistance while ADB and Islamic Development Bank were ready to extend $4 to $5 billion and $1 billion respectively.
The ADB has attached two conditionalities for providing $4 to $5 billion for the Bhasha dam, first to implement procurement guidelines while second is to get resolution passed from the National Assembly in a bid to evolve consensus of all stakeholders, he added.
To another query about reported objection raised by prime ministers special assistant during the CDWP on availability of water for construction of Bhasha Dam, he said it was the personal opinion of the special assistant and it was in fact proved by two previous committees ie AGN Abbasi and Nisar Memon that water was available for construction of the reservoirs.
He said the royalty would be an issue between the NWFP and Northern Areas, and two committees were formed by the government to resolve it.
A committee, he said, had been constituted under deputy chairman Planning Commission to demarcate boundaries between NWFP and Northern Areas related to Bhasha Dam on the basis of which the royalty issue would be resolved. He admitted that there was a proposal to install power plants each in NWFP and NAs, but it was premature to offer any comment on it.
He said the government was working to ensure energy mix by reducing its reliance on thermal power while promoting hydropower, coal, wind and solar energy.
He said there were four Discos running in losses while remaining four were earning profits. The government, he said, decided to privatise four Discos such as Peshawar Electric Supply Company, Hyderabad Electric Supply Company, Quetta Electric Supply Company and Faisalabad Electric Supply Company by offering 26 per cent shares.
He said the bad example of privatisation through Karachi Electric Supply Company (KESC) should not be made example for future privatisation proceeds. The KESC was making losses of Rs 12 to 13 billion per annum so the government had preferred to privatise it in order to reduce the burden on the national kitty.
On Thar Coal project, he said the government placed Thar Coal Energy Board which was making arrangements to generate 1,000MW by attracting investment to the tune of $1.5 billion. The WB, he said, was also going to approve $30 million technical assistance for Thar Coal Project, which possessed coal reserves to the tune of 183 billion tons.
On power generation potential, he said Pakistan could generate 60,000MW hydropower in next 8 to 10 years. The proposed Buni Dam possessed potential of 7,000MW, Bhasha Dam 4,500 MW, Dasu Dam 4,000MW, Pattan Dam 2,800MW, Kalabagh 3,600MW and Akhori Dam 600MW.
To another query, he said the government was committed to eliminate loadshedding by December 2009. The rental power plants will produce expensive electricity but it is our view that by mixing the power from different avenues Pakistan can reduce the electricity prices to bearable level by mixing energy basket, he concluded.
By Mehtab Haider
ISLAMABAD: The government on Saturday announced for the first time publicly to increase power tariff by 22 per cent in three phases, which will be in real term standing at around 25 per cent with compound effect in current fiscal year to generate Rs 55 billion in line with an agreement struck with the WB and ADB.
Yes, we will raise power tariff in the range of 10 per cent on October 1, 2009, 5 to 6 per cent on January 1, 2010 and 6 per cent on April 1, 2010 in line with the agreement with the World Bank and Asian Development Bank, Additional Secretary, Ministry of Water and Power, Zarar Aslam, said while briefing reporters here on Saturday.
With the announcement of hike in power tariff by 22 per cent, the prices of electricity will go up by around 25 per cent with compound effect as every raise will be given on overall prices of electricity.
Zarar Aslam, who is also official spokesman for the Ministry of Water and Power, said the power generation cost stood at Rs 8.25 per unit while the government was charging average Rs 5.75 per unit from the consumers so this gap could either be bridged through provision of subsidy or hiking the power tariff. To a query about power outages, he said the country was currently facing power deficit of 4,000 MW and all-out efforts were going on to scale it down immediately. He said the Mangla power plants would be made fully operational by July 25, 2009 as currently only 200MW electricity was being generated against its capacity of 1100MW from 10 installed plants.
On construction of Diamer-Bhasha dam, he said the World Bank was not going to provide financial assistance while ADB and Islamic Development Bank were ready to extend $4 to $5 billion and $1 billion respectively.
The ADB has attached two conditionalities for providing $4 to $5 billion for the Bhasha dam, first to implement procurement guidelines while second is to get resolution passed from the National Assembly in a bid to evolve consensus of all stakeholders, he added.
To another query about reported objection raised by prime ministers special assistant during the CDWP on availability of water for construction of Bhasha Dam, he said it was the personal opinion of the special assistant and it was in fact proved by two previous committees ie AGN Abbasi and Nisar Memon that water was available for construction of the reservoirs.
He said the royalty would be an issue between the NWFP and Northern Areas, and two committees were formed by the government to resolve it.
A committee, he said, had been constituted under deputy chairman Planning Commission to demarcate boundaries between NWFP and Northern Areas related to Bhasha Dam on the basis of which the royalty issue would be resolved. He admitted that there was a proposal to install power plants each in NWFP and NAs, but it was premature to offer any comment on it.
He said the government was working to ensure energy mix by reducing its reliance on thermal power while promoting hydropower, coal, wind and solar energy.
He said there were four Discos running in losses while remaining four were earning profits. The government, he said, decided to privatise four Discos such as Peshawar Electric Supply Company, Hyderabad Electric Supply Company, Quetta Electric Supply Company and Faisalabad Electric Supply Company by offering 26 per cent shares.
He said the bad example of privatisation through Karachi Electric Supply Company (KESC) should not be made example for future privatisation proceeds. The KESC was making losses of Rs 12 to 13 billion per annum so the government had preferred to privatise it in order to reduce the burden on the national kitty.
On Thar Coal project, he said the government placed Thar Coal Energy Board which was making arrangements to generate 1,000MW by attracting investment to the tune of $1.5 billion. The WB, he said, was also going to approve $30 million technical assistance for Thar Coal Project, which possessed coal reserves to the tune of 183 billion tons.
On power generation potential, he said Pakistan could generate 60,000MW hydropower in next 8 to 10 years. The proposed Buni Dam possessed potential of 7,000MW, Bhasha Dam 4,500 MW, Dasu Dam 4,000MW, Pattan Dam 2,800MW, Kalabagh 3,600MW and Akhori Dam 600MW.
To another query, he said the government was committed to eliminate loadshedding by December 2009. The rental power plants will produce expensive electricity but it is our view that by mixing the power from different avenues Pakistan can reduce the electricity prices to bearable level by mixing energy basket, he concluded.
