Raja Pervez Ashraf Rejects Reports of Hike in Power Tariff

Tuesday, January 19, 2010 at 6:12 pm

ISLAMABAD: Minister for Water and Power, Raja Pervez Ashraf Tuesday rejected the reports of 45 per cent increase in power tariff.

“I have checked with the Finance Ministry and ADB and there is no such report. The report may be completed by January 22. Whatever has been reported is based on assumption and speculation,” he informed National Assembly on a Calling Attention Notice.

The minister said the decision of third party validation was made by the PPP government and the Prime Minister as we did not want to put extra burden on consumers.

He assured the House to inform on report once it is received and said tariff is revised by NEPRA after a public hearing and listening to stakeholders and taking them into confidence.

He said there is wide gap of Rs 12 billion monthly between generation and service and the government still bears subsidy of Rs 55 billion annually.

To say, annual difference of generation and service amounts to Rs 144 billion annually. “To bridge this gaps, the government has to give subsidy under compulsion,” he added.

The minister described energy mix imbalance as one of the reasons behind tariff hike. “We have lesser hydel power, minimal coal power and have to mostly depend on thermal power. And for thermal power, international oil prices, affect the consumer price of electricity.”

He said even recently NEPRA had proposed more than Rs 10 per KW/hr tariff increase but the government curtailed it to around Rs six per KW/hr.

Pervez Ashraf said, if the tariff is ceased, it will increase circular debt to even over Rs 400 billion and subsequently ruin the utilities.

Answering a question, the minister said, rental power is costly than the normal power. “It was a quick fix to avoid massive loadshedding because hydel power project takes eight to nine years to complete, coal five to six years and IPPs three to four years.”

He said hydel power is the cheapest costing Rs 1.5 to Rs two per unit and as far as we do not have more hydel power, energy mix imbalance will persist.

“At present, we have 35% hydel and 65% thermal power. We are trying to restore energy mix balance in our overall energy basket and work is in progress on Bhasha, Neelum Jhelum, Kohala and Bunji projects,” Pervez Ashraf said.

About load-shedding schedules, he said, DESCOs try to manage schedules but some unforeseen reasons like fog and blasting power pylons disrupt supply in some areas unusually.

He said DESCOs ensure 10 hours uninterrupted supply for tubewells during night to avert extra charges incurred on farmers due to load-shedding.