Nepra stripped of its autonomy

ISLAMABAD: The Council of Common Interests (CCI) on Tuesday approved drastic changes to a law to clip powers of the National Electric Power Regulatory Authority (Nepra) to independently determine electricity tariffs.

The council also gave its nod to a plan to equally share Rs177 billion cost of flood protection plan between the centre and provinces.

The CCI meeting, presided over by Prime Minister Nawaz Sharif and attended by provincial chief ministers, did not take up fresh items on the agenda and settled only contentious and outstanding issues that had been pending.


Sindh gives up demand for full financing of Rs177bn flood protection plan


A participant of the meeting told Dawn that major changes were approved to amend the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 — commonly known as the Nepra Act.

The changes bind Nepra, the main power-sector regulator, to follow government directives in determining tariffs. This means the authority would lose its independent powers to set consumer-end tariff. Moreover, an “independent panel” would be formed which could challenge Nepra’s decisions.

Informed sources said the proposed changes to the Nepra law were not shared with the regulator before the meeting. A Nepra team was invited to the meeting for a presentation on “State of Industry Report” that was not taken up.

The sources said Punjab Chief Minister Shahbaz Sharif made a hard-hitting statement against the regulator for its alleged failure to perform functions for which it was created because of inefficiencies and resultantly hampered private sector investment instead of being a facilitator.

He said his government had been able to recently bring down solar power tariff to less than six cents per unit, a role which should have been played by Nepra. He alleged that the power regulator was incapable of handling important issues and its attitude was damaging to the power sector; besides, the challenges facing the sector were not being resolved despite strong commitment of the government.

These sources said Sindh Chief Minister Murad Ali Shah also criticised Nepra for creating irritants to renewable energy and the promotion of Thar coal projects.

They said Nepra chairman Tariq Sadozai was currently on leave and the regulator was represented by its vice chairman Saifullah Chattha, recently posted on the recommendation of the Punjab chief minister. Mr Chattha did not speak in response to the political diatribe.

To cut regulatory powers, a fresh clause has been added to section 31(1) of the Nepra Act. The clause reads: “the Nepra shall, in the determination, modification or revision of rates, charges and terms and conditions for the provision of electric power services, be guided by national electricity policy, the national electricity plan and such guidelines as may be issued by the federal government in order to give effect to the national electricity policy and national electricity plan.”

Another amendment has been made to section 31(4) of the Act that originally made it binding on the federal government to seek review of any Nepra determination within 15 days or else the determination deemed to have been notified automatically. After deleting this binding, the government would not be under any such compulsion.

A new clause has been added to the law that gave the federal government the powers to impose a surcharge on such consumer categories as may be notified in the official gazette for collection by the companies and empower the government to use it for “discharging public service obligations”. This addition is meant to address challenges arising out of judicial intervention against three existing surcharges imposed for debt servicing, tariff equalisation, etc.

It was agreed in principle that all the provinces would have their own power regulatory bodies instead of a national regulator having countrywide jurisdiction because electricity was a provincial subject under federal legislative list-II.

FLOOD PROTECTION PLAN: Informed sources said Mr Shah gave up a demand for full financing of the flood protection plan by the federal government as advocated by his predecessor, Qaim Ali Shah, when three other provinces sided with Centre for sharing financing burden.

Therefore, the CCI approved the financing of National Flood Protection Plan Phase-IV (2016-25) at an overall cost of Rs177.661 billion on a fifty-fifty-share basis by the federal government and the provincial governments. The plan was thrice deferred by the CCI in the past due to disputes over financing.

An official statement said the CCI also considered an inquiry into corruption charges of Kacchi Canal case and “unanimously decided that exemplary punishment be accorded to all the officials involved in the case”. The

The prime minister said that previous development projects were never completed in time and cost overrun was a matter of routine. He directed that all projects should henceforth be completed within approved costs and scheduled timelines with utmost transparency.

The CCI directed all provincial representatives to hold meeting with the federal minister for planning and development to finalise matters pertaining to higher education and other similar bodies in a post-18th Amendment scenario.

On the agenda of import of liquefied natural gas, moved by the Sindh government, it was decided that the summary shall be circulated to all provinces for soliciting comments and shall be presented in the next CCI meeting. The Sindh government proposed that all matters pertaining to Article 154 of the Constitution and in part-II of the federal legislative list fell in the provincial jurisdiction and should not be decided upon by the Centre.

The sources said Mr Shah’s demand for the provision of a duplicate copy of housing census of each household was overruled when Finance Minister Ishaq Dar said it would add to the costs and was against the secrecy clauses of the census law.

An official statement said the CCI expressed satisfaction over the sixth population and housing census. The Ministry of Finance assured the participants that the census would be completed transparently and in time.

The Ministry of Climate Change briefed the meeting that detailed consultations on National Forest Policy of 2015 have been completed with all provinces. The policy only provides for additional federal technical and expert advice as well as coordination with international forums with which Pakistan is signatory to international protocols and agreements. Forests, itself being a provincial subject, shall remain under control of provincial governments for implementation.

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