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Planning Commission proposes to abolish power sector subsidies

The Planning Commission has proposed abolishing Rs360 billion power sector annual subsidies, importing 7,100 megawatt electricity from regional countries, making available 750 mmcfd gas from Iran, and inducting 500 mmcfd liquefied natural gas (LNG) in gas network over the next three to four years.

The commission has made these plans in it Implementation Matrix Result Based Management under Framework for Economic Growth a copy of which is available with The News.

The said paper has not yet been tabled before the National Economic Council (NEC) for final approval.

The framework states that the government plans to import 1,100 MW electricity from Iran, 5,000 MW from India, and 1,000 MW from Tajikistan till the fiscal year 2015/16.

The implementation plan discloses that the government also wants to include 6,500 MW additional electricity generation capacities through domestic avenues till 2015/16 by kick-starting work on construction on Basha dam, Neelum Jhelum hydropower project, Nandipur and Chicho Ki Malian and 747 MW Guddu Combined Cycle power plant.

Thar Coal based power projects will be connected to national grid, putting in place energy efficiency as conservation act being amended, and conservation codes and 300 MW productions through renewable energy resources from existing 17 MW.

The government aimed at curtailing losses in electricity sector in shape of theft, non-payment of bills, meter and un-metered supply, and transmission distribution from an average level of 21 percent in 2010/11 to 16 percent by fiscal year 2015/16.

There was Rs360 billion annual power sector subsidies in 2010/11 that would be abolished totally by 2015/16 and non-recovery of electricity bills amounting to Rs80 billion per annum would also be curtailed by amending NEPRA act.

The government envisages that the load shedding will be eliminated by fiscal year 2015/16 against 30 percent load shedding of power sector at the moment. It also made commitment that the monster of circular debt would be largely eliminated by fiscal year 2015/16.

The losses in gas distribution will be reduced from 7 percent to 5 percent and gas load shedding will also be eliminated by the year 2015/16 from existing 25 percent.

The framework suggested implementing reforms for strengthening regulatory agencies of the energy sector.

“The Planning Commission also envisaged establishing single independent energy sector regulatory authority by merging National Electric Power Regulatory Authority (NEPRA) and Oil and Gas Regulatory Authority (OGRA).”

It also suggested amending NEPRA act for better recovery of electricity bills, amending OGRA Ordinance 2002 for proper monitoring and enforcement of deregulated downstream oil sector.

To ensure better guidance and enforcement of rules and regulation through revamped GENCOs/WAPDA hydroelectric, privatisation of distribution companies and induction of professional management, the government also made plans to fully corporatised and privatised energy sector. The Grand Plan * To abolish annual power sector subsidies worth Rs 360 billion * To import 7,100 MW electricity from neighbours, including India * To import 750 mmcfd gas from Iran * To induct 500 mmcfd LNG in gas network over next three to four years

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