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Power sector outsourcing hits snags despite IMF pressure

Tug of war between ministry and its official behind delay

The government’s plan to outsource Guddu Thermal Power Plant has hit snags due to multiple on-ground enquiries, sources have informed Minute Mirror.

A tug of war between the minister and top officials of the ministry is also the reason behind the delay in the materialization of the process, said sources in power sector. The International Monterey Fund (IMF) has been pushing for the privatization of the power sector. The government had proposed the outsourcing of Guddu – the central power generation company limited (Genco-II) – in first phase as it is set to privatize the entire power generation sector. Qatar- and UAE-based companies had separately shown interest in operation and maintenance (O&M) of the plant, according to sources.

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Official sources said four main enquiries were under process at Guddu: damages to the power plant, delay in O&M as the PML-N government has initiated the process in 2016, longtime services agreement with General Electric (GE) and purchase of gas turbines for the plant in 2017. On the other hand, the government had decided to dissolve the board of directors of all the generation companies (Gencos) and put them under a single company -the Genco Holding Limited.

For the purpose, the minister wanted to appoint the chief executive officers (CEOs) of the different power distribution companies (Discos) in the Gencos as their additional in-charges. However, the ministry officials were opposing the decision, as per official sources. “A top official in the ministry is not in favor of appointment of Discos’ CEOs as additional in-charge to the Gencos, rather he is calling for the nomination of spokespersons within the generation companies as stopgap arrangements till the completion of dissolution process of Gencos BoDs,” sources said.

“The process will be done on pick-and-choose basis. Some powerful politicians will push for the appointment of their blue-eyed in Gencos from Discos,” they added.

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Some CEOs of the distribution companies were close to politicians and their reputation was under question, sources said, adding their appointment in Gencos led to fears of opening the floodgate of corruption in the generation companies already under process of strict scrutiny.

The overall process was become muddy and it will ultimately face delays in outsourcing despite the IMF pressure, said the sources. Although every government has pushed for the privatization or public-private partnership of power sector but the situation on ground is completely different and is the reason behind the materialization of plan, they added. The spokesperson for the Power Ministry said the government will complete the process in a transparent manner.



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