The Ministry of Finance has opposed a proposal by the Ministry of Energy to appoint senior armed forces officers as heads of new Performance Management Units (PMUs) in the power distribution companies, saying it violates a previous decision of the Special Investment Facilitation Council (SIFC).
The SIFC had approved giving the army a role only in an anti-theft campaign, not in the management of the power sector, which is facing huge losses and inefficiencies.
The energy ministry had sought the cabinet’s approval to set up new PMUs in all power distribution companies and a grade-20 officer of the armed forces would head these units. It also requested the Ministry of Defense to post one officer from sensitive agencies in each DISCO and a serving police officer for coordination with police authorities in the anti-theft campaign.
Earlier, it was emerged at the end of the last month that the Power Division had prepared a plan to establish Performance Monitoring Units (PMUs) in every Disco that was facing high losses and low recovery. The PMUs will be headed by a serving brigadier and will have officials from the Federal Investigation Agency (FIA) and the Intelligence Bureau (IB) as part of their staff.
However, the finance ministry has raised questions about the additional cost of setting up these units, the lack of experience in managing the power sector, and the deviation from the SIFC decision.
It is pertinent to mention that the power sector circular debt jumped from Rs2.310 trillion in June to Rs2.61 trillion in October –a net increase of Rs301 billion in just four months.
Out of the Rs301 billion increase, an amount of Rs242 billion or 80% of the additionality, was on account of inefficiencies and less recovery of the bills by these power distribution companies.