ISLAMABAD, Nov 28: The federal government is expected to approve a Rs35 billion rescue package for Wapda here on Thursday to prepare its 12 corporate companies for privatization, official sources told Dawn .

A high-level meeting, to be presided over by President Gen Pervez Musharraf, would be given a comprehensive presentation on the performance of Wapda’s military management and financial and regulatory problems faced by the utility, these sources said.

The Wapda is initially demanding about 10 per cent (37 paisa per unit) immediate average tariff increase coupled with a number of other measures to meet this Rs35 billion shortfall. If other demands are not met, Wapda’s tariff increase requirement could go up to a 35 per cent, Wapda sources said.

Provincial governors, Wapda top brass, senior officials of the ministries of finance and water and power and National Electric Power Regulatory Authority (Nepra) would attend the meeting.

On top of the agenda is the issue of provincial and federal taxes which, the Wapda thinks, are a hurdle in the transfer of its assets to corporate companies, and wants exemption from them.

A meeting presided over by the federal finance minister and attended by provincial finance ministers last week remained inconclusive. The provincial finance minister wanted to have advice from their respective governors before granting tax exemption to Wapda companies.

Sources said that provincial governors were still reluctant to exempt Wapda companies from provincial taxes unless Wapda provided electricity to street lights and local bodies purely on domestic rates.

In Thursday’s meeting, response of the provincial governments would also be presented before the president for a final decision as the two sides have been poles apart on the question of tax exemptions.

In the presentation, Wapda chairman Lt-Gen Zulfiqar Ali Khan would brief the president on the achievements the army made since its induction in the utility in 1998, and the continued cash deficit despite increase in electricity sale, reduction in losses and revenue growth. The Wapda has proposed a 7-pronged strategy to meet current year’s Rs35.2 billion cash shortfall.

Another Rs9.6 billion are proposed to be met through 10 per cent (or 37 paisa per unit) increase in electricity tariff. It stipulates a Rs3.2 billion saving through additional gas quota allocation of around 150 MMCFD and Rs3.8 billion through reduction in gas tariff for power consumers at the level of fertilizer gas tariff.

It seeks another Rs1.2 billion revenue generation through reduction in subsidies for Fata and agriculture consumers in Balochistan and Rs1 billion through supply of fuel oil to Wapda from Parco and Attock Oil Refinery from the upcountry instead of PSO in Karachi.