LAHORE, July 23: The government must not provide the Water and Power Development Authority the easy way of tariff increase without an overall reduction in line losses and recovery of arrears, the Institute of Electrical and Electronics Engineers Pakistan has said.

In a letter to Federal finance Minister Shaukat Aziz, copies of which have also been dispatched to secretaries of Finance and Cabinet Division, the National Electric Power Regularity Authority and the president’s secretariat, the IEEEP said the Wapda had been making profit until 1999-2000. The mystery of its change of fortunes which has seen it lose Rs40 billion over three years despite tariff revisions must be solved before granting any further increase.

The letter said citizens had the right to know why the Wapda had failed to control its line losses, which it had promised during the hearing of its previous tariff revision petition.

The Wapda, it said, had also failed to improve its revenue collection and was trying to pass the burden to consumers. The average increase has been only 24 per cent despite a tariff increase of 16 per cent and a load growth of 16.1 per cent. The Wapda has also failed to explain why it has not been able to recover ‘dead arrears’ of over Rs20 billion.

Meanwhile, the IEEEP said, there had been a phenomenal increase in Wapda’s expenditure which had increased by 127 per cent in four years — from Rs85.6 billion to Rs194.3 billion. The much trumpeted fuel bill had risen by only Rs16.5 billion — from Rs19.5 to Rs36 billion in four years — compared to Wapda’s deficit of Rs55 billion. This, the letter said, reflected Wapda’s inefficiency rather than anything else.

The Wapda also needs to explain why its expenditure on independent power producers had gone Rs115 billion from Rs42.5 billion four years ago — an increase of Rs72.5 billion, an increase of 171 per cent while the load has grown by only 13.8 per cent. The IEEEP said it was because Wapda’s own thermal power plants were not being operated. The authority was forced to buy 8.765 billion units from the IPPs on account of its inefficiency. This had cost over Rs42 billion during the current year alone.

If Wapda’s Rs55 billion deficit was to be recovered through an increase in tariff, the letter concluded, the nation better prepare for the doomsday scenario of the Wapda sinking like Titanic, taking the nation with it.