The Ministry of Finance has raised concerns about the Ministry of Energy’s proposal to appoint senior military officers as heads of new Performance Management Units (PMUs) in power distribution companies. This opposition stems from several key points:
Contradicting SIFC decision: The Special Investment Facilitation Council (SIFC) previously limited military involvement in the power sector to anti-theft initiatives, excluding them from direct management roles.
Additional costs: The finance ministry questions the increased expenditure associated with establishing these PMUs and the potential burden on public finances.
Lack of experience: Concerns exist about the possible lack of relevant experience in managing the power sector among military officers, particularly regarding the complex challenges of Discos facing significant losses and inefficiencies.
Previous proposals:
In late October, the Power Division intended to set up PMUs in Discos facing high losses, with each unit headed by a brigadier and supported by FIA and IB officials.
Finance Ministry’s objections:
The additional cost of establishing and maintaining these PMUs.
The potential lack of relevant expertise among military officers for effectively managing the power sector.
The deviation from the SIFC’s decision on military involvement in the power sector.
Context:
The power sector circular debt has risen significantly, increasing by Rs301 billion in just four months, with Rs242 billion attributed to inefficiencies and low recovery by Discos.
Overall, the proposal to place military officers in charge of PMUs within Discos faces opposition due to cost concerns, potential lack of experience, and concerns about deviating from previous decisions. The finance ministry’s objections highlight the need for further discussion and analysis before implementing this plan.
December 7,2023
Source: Pakistan Today