The government has halted the demolition of the boards of eight power distribution corporations, putting a stop to Prime Minister Shehbaz Sharif’s plan to remove political control from these boards due to opposition from several sources.
Days after the prime minister said that the boards should be fired for “alarming indicators of bad governance and poor performance,” which resulted in an enormous loss of Rs589 billion, the decision to remove the boards was shelved.
These boards were established when the Pakistan Democratic Movement (PDM) was in power.
The development coincided with an increase in load shedding, especially in regions experiencing significant financial losses.”Economic load shedding of up to 16 hours would continue in areas where the losses are 90% and more,” stated the minister of power.
According to the sources, the decision to remove the directors of eight boards and appoint new directors has been temporarily paused.
The prime minister gave the Power Division permission to request permission from the cabinet committee on state-owned enterprises (SOEs) to dismiss the current directors and appoint new ones. The cabinet committee then supported Shehbaz Sharif’s choice last week. Following the committee meeting, the finance ministry declared last week that, subject to submission to the cabinet, the Power Division’s request to name independent directors for particular energy distribution businesses had been approved by the cabinet committee on SOEs.
According to sources, the supporters and board members began pressuring the government after the decision was made public.
Additionally, they vowed to sue the government, arguing that the boards’ terms were protected by statute and that they had only been in office for three years.
According to the sources, the administration gave in to pressure and last week did not bring the cabinet committee’s advice on SOEs to the federal cabinet for final approval before terminating the members.
Upon being contacted, Power Minister Sardar Awais Leghari stated that a new summary would be submitted for approval and that the Power Division had removed the summary from the cabinet committee on the SOEs.
Leghari claimed that there was a firm determination to reassemble these boards in a way that would break the mafias.
Prime Minister Shehbaz Sharif, who had pledged to defeat the forces of the status quo, will suffer a serious blow if the administration fails to see the issue through to the end.
Finance Minister Muhammad Aurangzeb previously notified the International Monetary Fund (IMF) that the government is changing the boards of the electricity distribution corporations. The federal minister for information and television, Attaullah Tarar, told The Express Tribune, “We are 100% committed to (the reconstitution of the boards), and it will be done.” According to Tarar, there was no going back on this.
The sources claimed that the administration has now begun personally requesting that each member of these bodies step down from their seats because of the possibility of legal challenges. They said that most of them declined to quit, with only a small number responding positively.
According to a senior government official, there is a pause but the process has not been overturned and Prime Minister Shehbaz Sharif is still dedicated to it.
During his previous term, Prime Minister Shehbaz Sharif established these boards between July 2022 and November 2022, mostly on the advice of coalition partners, which led to the recruitment of politicians and their families.
The electricity division had told the cabinet committee on SOEs that the ten government-owned electricity distribution businesses would lose Rs589 billion this fiscal year, citing the dire situation.
The government held These boards responsible for “poor governance, performance, and service delivery.” According to the government, these boards received frequent reminders to do better, focusing on “alarming indicators of bad governance, poor performance, and non-satisfactory service delivery.”Eight power distribution corporations, including those in Faisalabad, Gujranwala, Lahore, Islamabad, Multan, Quetta, Peshawar, and Tribal Areas, had their independent directors removed by the government. According to the board nominating committee led by Power Minister Awais Leghari, the new names were also approved.
Nevertheless, the IESCO board of directors responded to the government’s choice to remove them.
According to the board members, IESCO often reached its goals and frequently surpassed the performance metrics established by the regulator, as evidenced by the NEPRA Performance Evaluation Report for the fiscal year 2022–2023. They added that the IESCO outperformed other DISCOs with an impressive recovery rate of 106.32%, going above and above the 100% target and having a beneficial effect on the state of the economy.
The members further stated that the IESCO has demonstrated our effectiveness in service delivery by meeting the required 95% threshold for new connections within the allotted time frames.
The chief executive of IESCO was notified by the power planning and monitoring company, a government entity that oversees the performance of the boards, that there were significant losses in computed recovery, transmission, and distribution losses, and a reduction in mobile meter accuracy, which was 99%, 1% below the target.
Furthermore, according to government reports, 4,191 electricity hookups are still pending.
According to the sources, the government may decide to fill the open posts on the IESCO board and keep some of the current members, such as Adnan Baig, because of their superior performance. The board of QESCO was charged by the government with causing the company’s largest yearly losses of Rs138 billion during this fiscal year. PESCO’s board decided to change after the company suffered losses of Rs 137 billion. The fifth-highest amount of losses, Rs51 billion, was incurred by TESCO. FESCO’s board was first removed due to Rs. 17 billion losses.
The accusation of generating losses of Rs. 12 billion led to the decision to remove the GEPCO board. The board of MEPCO has chosen to fire the company despite losses of Rs 38 billion. The board of LESCO was dismissed due to losses of Rs 43 billion.
IESCO’s board was changed as a result of losses of Rs. 41 billion.
Shedding of loads
According to a press release from the PM’s Office, Prime Minister Shehbaz Sharif instructed the authorities on Tuesday to improve load management to reduce the current load-shedding in various locations.
It further stated that the premier urged the province governments, law enforcement organizations, and other departments to increase their cooperation in the anti-power theft campaign in the interest of the nation and its advancement.
According to Power Minister Sardar Awais Leghari, load shedding occurs in the areas where feeder losses are 90% or more for about 16 hours per day. He described it as “economic load shedding” and said it would be on until the bills started to recover more quickly.
Due to the significant losses, Fort Munro, a portion of the minister’s constituency, which he had won with a majority of 8,000 votes in the February 8 elections, is experiencing load shedding for more than eighteen hours per day.
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