NTDC privatisation after restructuring

Source: The News International

ISLAMABAD: The sitting regime has made up its mind to privatize the National Transmission Dispatch and Company (NTDC) under the medium-term plan and in the first place, the NPCC (National Power Control Cell) would be separated from it at the earliest.

Under the plan, the authorities are contemplating to first restructuring the NTDC and then it would be privatized and this process will take two years to complete the transaction. However, as a first step, the NPCC would be detached from NTDC. The Board of Directors (BoDs) would be constituted of NPCC.

"Yes, we are making the strategy to hand over NTDC to the private sector, but after restructuring it," Secretary Power Division has confirmed to The News adding that the nature of the working of NPCC is quite different from the functions and responsibilities of the NTDC, so it has been decided that NPCC will be separated from NTDC. He said that CPPA-G (central Power Purchase Agency) was also part of NTDC which was detached many years back. The paid-up/share capital of the company is Rs52.7 billion (Rs5.27 billion ordinary shares of Rs10 each). GoP owns 88pc of shares whereas the employee owns 12pc.

However, NTDC is currently not on the list of the entities being offered for sale. The NTDC can no longer sustain and thrive on business as usual. It has no Managing Director right now and it is being run by the power division on an ad hoc basis. The Privatization Commission and Power Division are upbeat to privatise the electric power distribution companies in Punjab, and the government is planning to hand over the DISCOs in KPK, Sindh and Balochistan to the private sector on a long-term concession basis. The official sources said, its two DISCOs, FESCO and GEPCO and one DISCO of capital IESCO would be offered for privatization in the first phase. However, LESCO, MEPCO, and HAZECO would be sold out in the second phase. The annual losses of DISCOs are estimated to increase up to Rs589 billion.

Recently a Korean firm won the case against the NTDC in the London Court of International Arbitration for the inclusion of escalated cost in the true-up tariff and failure of NTDC to evacuate electricity from the 147 MW Patrind Hydropower Project after achieving COD (commissioning of date).

It also failed to evacuate the cheaper electricity generated in Sindh through the HVDC Matiari-Lahore transmission line to the load centre of Punjab owing to which it is getting electricity from power plants in Punjab at higher tariffs.

This is how the end consumers were forced to pay higher prices under the monthly fuel adjustment mechanism.