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Executive Summary

After having intensive coursework it is prerequisite to have eight week internship in any
organization in order to get practical experience and familiarity with corporate atmosphere.
Being having specialization in Finance I had completed my internship in FESCO (WAPDA).

Faisalabad Electric Supply Company Limited (FESCO) is one of the nine-electricity


distribution companies (DISCOs) established as a result of the unbundling of the vertically
integrated power wing of Pakistan Water and Power Development Authority (WAPDA). It was
organized to take over the properties, assets, obligations and liabilities of former Faisalabad Area
Electricity Board (AEB) of WAPDA. The company was incorporated in March 1998 as a public
limited company under Pakistan Companies Ordinance 1984.

FESCO distributes and supplies electricity to about 2.76 million customers within its service
territory with a population of over 17.2 million under a Distribution License granted by National
Electric Power Regulatory Authority (NEPRA) pursuant to the Regulation of Generation,
Transmission and Distribution of Electric Power Act, 1997 (NEPRA Act).

The Water and Power Development Authority (WAPDA) was established through a
parliamentary enactment in February, 1958 for integrated and rapid development and
maintenance of water and power resources of the country. The Authority consists of a Chairman
and three members heading Water, Power and Finance Wings. Water Wing of WAPDA is
responsible for planning, designing and execution of water resources development projects in
irrigation, drainage and hydropower sectors. Major surface water projects including large dams
are also operated and maintained by Water Wing. In view of Critical situation of Water Storage
resources, the Federal Cabinet approved various Water and Power projects for construction
under Vision 2025 programme.

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Power Wing of WAPDA deals with Hyderal Power generation as well as fourteen corporate
companies comprising four generation companies (GENCOs), one National Transmission and
Dispatch Company (NTDC) and nine Distribution Companies (DISCOs). These companies are
working under the umbrella of Pakistan Electric Power Company (PEPCO).

National demand of electricity has increased and would continue to grow with the development
of economy. Based on the present generation capacity, the hydel-thermal mix in the country is
37:63, which is almost the reverse of an ideal hydel-thermal mix, which should be 70:30 for a
favorable economic development of the country.

The power demand during the last 7 years had grown at an average rate of about 6.31%. The load
forecast prepared by WAPDA in collaboration with Energy Wing, Planning and Development
Division, Government of Pakistan indicated that the power demand would grow at an average
rate of 7.55% per year. To match this projected load, no additional generating capacity could be
added.

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PREFACE

FESCO (Faisalabad electric supply company) WAPDA owes a pivotal importance in the region
through its vibrant functions. This is the deep-seated motivator that geared up me to join FESCO
WAPDA for internship. Moreover, the practice and familiarity during this tenure would also
attest helpful and alleviating in the awaiting proficient life. I have believe that this report will
guide and ease the readers to understand the operations of water resources and generations of
electricity in Pakistan and more prominently have good knowledge about FESCO WAPDA, one
of the most important and leading organization

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ACKNOWLEDGMENT

Absolute praise for Almighty Allah, provider of hope, guidance and knowledge without whose
constant remembrance I would not have over come my moments of despair.

I am grateful to Allah almighty, for enabling me to fulfill this tiring, but interesting job for the
completion of my internship report.

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DADICATION

I would not be going justice in presenting this internship report without mentioning the people
around me who have been inextricably related with the completion of this report.

I wish to record my honorable regards to all those who helped a lot in completion of this report,
especially to
Manager Audit, Khadim Bloch
Deputy Manager Audit, Rana Anwaar Ahmad
Accounts Officer, Aabid Hafeez

I also appreciate the valuable services and moral support from my friends. Finally I wish to place
on record, my heart felt thanks, regards, and gratitude to my parents. Their guidance support and
trust enable me to through this report.

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INTRODUCTION TO FESCO:
FESCO Means:

“Faisalabad electricity supply company”


Its name simply represent that, it’s the authority which deals with the electricity supply in the
Faisalabad region.

About FESCO
FESCO distributes and supplies electricity to about 2.76 million
customers within its service territory with a population of over 17.2 million
under a Distribution License granted by National Electric Power Regulatory
Authority (NEPRA) pursuant to the Regulation of Generation, Transmission
and Distribution of Electric Power Act, 1997 (NEPRA Act). Geographical
service area of FESCO comprises
1.Faisalabad
2.Sargodha
3.Mianwali
4.Khushab
5.Jhang
6.Bhakker
7.T.T Singh
8.Chiniot districts.
9.Jauharabad

FESCO is one of the best electricity distribution companies in Pakistan in


terms of operational performance, as it has low degree of distribution losses
and a high rate of bill collection. Its main service area is Faisalabad, known
as Manchester of Pakistan for its extensive textile industries.

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FESCO Top Management
Name Designation
Mr. Ahmed Saeed Akhtar Chief Executive Officer
Ch. Muhammad Ashraf HR & Admin Director
Mr. Izhar ul Haq Finance Director
Chief Engineer (O & M)
Mr. Asghar Ali Niazi
Distribution

Board of Directors
Name Designation

Mr. Muhammad Asghar Qureshi Chairman FESCO


Mr. Ahmed Saeed Akhtar CEO / Director
Mr. Abdul Mannan Director
Mr. Rashid Ali Director
Mr. Abdur Rahman Director
Mr. Shan Hussain Zaidi Director
Mr. Salman Iqbal Director

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Departments
01 - Grid Stations
02 - Information Technology
03 - Stock Inventory System (SIS) And GSO (SS & T-1)
04 - New Connection Monitoring System
05 - Planning Department
06 - Material Management (MM)

Financial Resources

As per WAPDA Act, financial resources for FESCO consist of:

a. Internal cash generation;

b. Grants made by the Government;

c. Loans obtained from the Government;

d. Sale proceeds of bonds issued under the authority of Government;

e. Loans obtained by the Authority from the financial institutions;

f. All other sums received by the Authority.

Financial Advisor & Sale Process

International Finance Corporation (IFC) is the Financial Advisor for the transaction supported by
Orr Dignam & Co., ESBI, NERA and A.F. Ferguson & Co. as its legal, technical, economic and
financial consultants. The marketing of the transaction began in January 2003 with the invitation
of Expression of Interests (EOIs) and Statement of Qualifications (SOQs) from parties interested
in the privatisation of FESCO. Interested parties submitting the SOQs by the closing date have
been evaluated and pre-qualified for bidding. The prospective bidders are engaged in their due
diligence.

Opportunity in the Transaction

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Operational Performance: FESCO is one of the best electricity distribution companies in
Pakistan in terms of operational performance, as it has low degree of distribution losses and a
high rate of bill collection.

Customer Base: FESCO’s main service area is Faisalabad industries. The transaction thus offers
the opportunity for interested investors to acquire a large customer base with a substantial
portion of energy sold to industrial customers who consume 37% of the energy sold and
contribute towards 48% of revenue.

Current issues
FESCO trying to Quick Recovery of 79 Million Arrears
Faisalabad Electric Supply Company (FESCO) warned public and private sector defaulters to
clear their arrears amounting Rs. 79 million within the deadline failing which, they have to face
disconnection of power supply. FESCO has launched vigorous campaign for the recovery of
stuck up bills. All defaulters have been strictly warned irrespective of their status to clear their
current bills and arrears so as to avoid any action that may lead to immediate disconnection of
their power supply and attachment of properties besides their arrest under the land revenue act.
all the Manager, Deputy Manager and Assistant Managers working in distributions company in
TobaTekSingh, Jhang, Faisalabad, Sargodha, Mianwali, Khushab and Bhakkar districts have
been directed to disconnect the power supply of the defaulters forthwith and initiate lawful action
against them. All the Assistant Managers have also been strictly directed to personally pursue
and plead the cases in the court. Several recovery teams have been constituted at sub division
level to ensure full recovery of the arrears from the defaulters. FESCO Chief Executive warned
all officials not to restore the power supply unless all the arrears were cleared failing which
concerned officer would be suspended from service.

Special recovery teams constituted to ensure 100% recoveries.


Special recovery teams headed by District Managers have been constituted to ensure 100%
recovery of FESCO dues, recovery teams are already working in 8 districts falling within the
jurisdiction of FESCO. However, concrete measures have also been taken to control line-losses;
and added that last year FESCO had collected Rs.44 Million revenue which had been enhanced
to Rs.55 Million this year.

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FESCO to Spend RS. 1.5 Billion On grids
Faisalabad Electric Supply Company (FESCO) will spend Rs.800 million on distribution
transformers and Rs.1.5 billion on the construction of new grid stations and up gradation of
exiting grids this year to ensure uninterrupted electricity supply to the customers within its
jurisdiction being a corporative identity FESCO was fully conscious of the importance of its
consumers and special arrangements have been made for the redressal of consumer’s complaints
on top priority basis. in addition to concerned subdivision’s telephone, 12 lines of abbreviated
number 118 and toll free No. The mobile telephone numbers of concerned Assistant Managers
and Deputy Managers have also been printed on electricity bills for the connivance of
consumers. It was appreciative of the responsibility and honesty of electricity consumers and
culture of power pilferage has been completely weeded out from FESCO while units consumed
in this company are fully billed. Responding to a question about the purchase of electricity from
private sectors, FESCO was purchasing electricity from Kohinoor, Sitara and Crescent Energy
at higher rate and providing it to consumers at cheaper rates. FESCO has introduced Bar-Code
system to ensure speedy payment of electricity bill. Commercial banks were also upgrading their
system to receive bills through computer system. FESCO was upgrading its system to cater to
the increasing needs of its consumers in addition to providing new connections. Last year the
demand of electricity was 1664 megawatt, which has now jumped to 1880 megawatt this year.

FESCO electrifies 2500 villages and localities.


Record 2500 villages and localities were electrified in Faisalabad Electric Supply Company
(FESCO) region here during last financial. Giving performance of this distribution company
FESCO also completed 1186 schemes including 938 LT proposals and 52 HT in addition to 196
deposit works. “A record amount of Rs.837.8 million was spent on these works Rs.1.52 billion
was also spent on the construction of new grid station, transmission line and augmentation
works. 132 KV Thekriwala grid station was completed with Rs.100 million during this year
under 6th STG program of WAPDA. 66 KV Satiana and 66 KV Chuttaina grids were also
upgraded to 132 KV with Rs.160 million. FESCO also installed three 40 MVA power
transformers in University grid, Old Thermal and Jhang Road grid stations with Rs.150 million
during this year. 32-kilometer long transmission lines were also laid with Rs.110 million while
work is in full swing for the construction of 2 grid stations with Rs.200 million. These grids are

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132 KV Kamalpur and 132 KV Pull-111. Work for the up gradation of 66-KV Shahpur,
Summundri amd Lalian grid stations is also under execution with Rs.240 million. It also
provided 180072 new electricity connections while open courts were held to redress 16801
complaints. FESCO Mobile Units also received and redressed 7158 complaints at the doorsteps
of consumers. FESCO recovered Rs.35986 million from private and Rs.2540 million from
government sector during this period. Thus its total recovery stood at Rs.38526 million.

GSC will spend Rs.1100 Million on various uplift projects


GSC (Grid Station Construction) Directorate expedites work on the construction of new grids in
addition to enhancing the capacity of existing grids. Addressing a briefing, GSC spent Rs.645
million on improving the capacity of 8 grid stations, construction of one new grid and laying
transmission lines during 2008-08. Capacitors of 120 MVAR were installed in 132 KV Chiniot
Industrial Grid, Khurarianwala, Mureed Wala, Bhakkar and Jhang City Grid Stations.
Similarly, capacitors of 60 MVAR were also installed on 8 grid stations of 11 KV with an
estimated cost of Rs.200 million. “This amount was provided by the Government”, FESCO was
working on new grids of 132 KV at Buland Hill, Khannuanna, Sammundri, and Chak 126 Janubi
Sargodha. Work on these projects was in advance stages and these grid stations would be
completed within next couple of months. BOD (Board of Directors) of FESCO has allowed
installation of transformer of 40 MVA at six different grid stations to meet the growing needs of
electricity. Among these grids include 132 KV old thermal, Chiniot Road, Narwala Road,
Factory Area, and University of Agriculture. He said that work on these grid stations was in full
swing while Asian Development Bank has also approved 13 projects for the expansion and up-
gradation of various grid stations. a proposal was under consideration to spend Rs.1100 million
on the improvement and augmentation works during 2008-09.

FESCO Will Add 500 MVA Capacities in Its System

Faisalabad Electric Supply Company (FESCO) wil1 add 500 MVA capacities in its distribution
system during this year. Physical work has already been started on 7 grid stations and 8
transmission lines within the jurisdiction of this company. Grid stations at VAC (Value Addition
City) and Sammundri would become operational during this month while work on 132-KV

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Khannuana and Buland Hill Chak No.128 Junubi has also been expedited to ensure its
completion before coming summer season. power transformers of 20/26 MVA capacity have
been installed at 132-KV Sammundri, Tandlianwala, Haveli Bahadar Shah, Bhalwal and
Bhakkar while another seven defective power transformers have also been repaired and installed
in Mureedwala, Chak No.120 Buland Hill, Sammundri Road, Barana, Bhowana, Kala Bagh and
Peplan. 2 power transformers of 40 MVA have already been erected at 132-KV Old Thermal and
UAF (University of Agriculture Faisalabad) grid stations to stabilize distribution system in
various city areas of Faisalabad.

FESCO to Buy 22 MW Electricity from Three Sugar Mills

FESCO has inked agreement with 3 Sugar Mills for purchase of 22 Mega Watt electricity. In this
connection Chief Executive FESCO Ahmed Saeed Akhtar, Awais Qureshi of Shakargang Energy
Limited, Javaid Iqbal General Manager of Ramzan Sugar Mills and Sarfraz Ahmed Group
Corporate Director of Chishtia Sugar Mills signed these agreements. Electricity purchased from
these Sugar Mills will facilitate the consumers of Jhang, Sillanwali and Bhawana. The electricity
supplied by these Sugar Mills will help FESCO to bridge the gap between supply and demand.
FESCO is currently purchasing about 50 MW electricity from different Private Power Producers
and in line with the government policy. It would also help FESCO to make such agreements with
other Private Power Producers to meet its requirements. According to the agreement Shakargang
Energy Limited will supply 11 MW, While Ramzan Sugar Mills Bhawana and Chishtia Sugar
Mills would contribute 6 and 4 MW respectively. These Sugar Mills will supply electricity
during sugar season. Price of electricity produce form Beggass will be Rs. 4.88. Ramzan and
Chishtia Sugar Mills will supply electricity on 11KV system while Shakargng Energy Limited
will supply electricity on 66KV System. The electricity purchase form Shakargang Energy
Limited will become a part of National Grid System.

FESCO Has Inked Agreement with Shakar Ganj Sugar Mills


Faisalabad Electric Supply Company (FESCO) has inked an agreement with Shakar Ganj Sugar
Mills for the purchase of 2 megawatt (MW) of electricity. Chief executive FESCO Ahmad Saeed
Akhtar and Awais Qureshi of Shakar Ganj Sugar Mills signed the agreement and exchanged

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documents in a function held at FESCO headquarters Shakar Ganj Energy Limited Jhang was
already providing 12-MW electricity while it would also supply another 2 MW to FESCO at its
11 KV System. FESCO was already purchasing surplus energy from Private Power Producers
and captive power plants to bridge wide gap between demand and supply in this major load
center of the country. FESCO is getting approximately 52 MW electricity from PPP and was
exploiting opportunities to purchase more electricity from PPP and Captive power plants to
overcome the load shedding. It is for next 20 years and its price would be linked with prevailing
gas tariff.

Electro-medical gadgets worth Rs.22.3 million purchased for WAPDA


hospital
Faisalabad Electric Supply Company (FESCO) has purchased latest electro-medical gadgets with
Rs.22.3 million for newly constructed Wapda Hospital, arrangements are also being made to
purchase state-of-the-art digital eye unit, and a new ambulance would also be purchased very
soon to facilitate the patients. specialists and paramedical staff were also being recruited to
extend best medical services under one roof more than 3000 families of FESCO employees are
registered for free medical treatment. About 350 patients are visiting OPD every day while
pathology laboratory was also conducting daily 175 tests.

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FESCO is spending Rs.1.2 Billion annually on its distribution network
Electric Supply Distribution system is in perfect condition and FESCO (Faisalabad ompany) was
spending Rs.1.2 Billion every year on its distribution network and grid stations. No grid station
in Faisalabad was overloaded while FESCO would upgrade its 13 grid stations with 35 Million
dollar loan of Asian Development Bank FESCO was supplying electricity to the traders and
industrial sector on priority basis. “Relief is immediately passed on the consumers especially
industrial consumers to continue the production and economic activity. Prime objective of the
National Power control Center (NPCC) Islamabad is to save the system and only under stress
grids are closed by it. However, on the request of FESCO, Federal Minister for Water and Power
Raja Pervaiz Ashraf has directed NPCC to stop forced load shedding in view of the industrial
importance of Faisalabad. Under short term program 1000 MW rental power plants would
become operational from January to April next and load shedding would be controlled by the end
of 2009. Electricity tariff charged from consumer is less than the cost paid by FESCO and
difference between sale and purchase is being paid from the subsidy of Government.

5 Rental Power Houses


Rs.1.5 billion is being spent on the improvement and augmentation of distribution system to
meet the fast growing needs of electricity within the jurisdiction of Faisalabad Electric Supply
Company (FESCO), 5 rental power of 950-MW capacity are being installed in and around the
main load center of Faisalabad. 150-MW summundri road plant will become operational by July
30 while work on 200-MW Satiana Road plant is in full swing. However it could start generating
electricity by the end of this year, land has been purchased for 200-MW Gojra-Dijkot road power
plant. However it would start working during next year. One power plant gifted by Abu Dubai
would be installed at GTPP on canal road. 200-MW liberty power plant is being installed in M-
III Industrial City. It would be dedicated to the industrial units to be installed in this mega
Industrial City. Machinery for this plant has been reached at the site and work on it has been
further expedited. Continuing average demand of electricity in Faisalabad is 1350-1400 MW.
Shortage of 580 MW which is being managed through well consulted load management
program. However, despite of constraints, FESCO is providing 5 to 7 hours continuous supply to
tube well-dominated feeders. Another 450 MVA power transformer has been added in 500-kv
Gatti Grid Station increasing its total capacity to 1800 MVA. This addition would permanently

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resolve the voltage problem in Summundri, Jhang and other areas of Faisalabad.

Privatization of FESCO
The Government of Pakistan (GOP) intends to privatize FESCO through sale of 56% of its
shareholding in the company to a strategic investor or a consortium of strategic and financial
investors of which the investor would be required to sell 5% shares to the employees by
instituting Employee Stock Ownership Program (ESOP) within one year of taking over of
FESCO. The GOP intends to hold 44% of the equity beyond privatization.

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Valuable Customer

Sr Reference Tariff Total Address


No. No Assessment
1 24 3135 B-4 32,215,651 M S SITARA CHEMICAL
55001004 INDUS F.ABAD ROAD
2 24 3441 B-4 25,439,999 PIONEER CEMENT LTD
51033007 CHANKI
3 24 3131 B-4 18,746,000 REFHAN MAIZ
51023006 PRODUCTS LTD MADINA
TOWN
4 24 3137 B-4 16,986,102 J K TECH PVT LTD
57080000 GSTNO JKS
5 24 3125 B-3 13,906,163 SARGODHA SPINNING
55049009 MILLS L SGD ROAD
6 24 3441 B-3 11,453,950 PAK KAUWAIT TEXTILE
51026006 MILLS LTD
7 24 3137 B-3 9,676,780 MUHAMMAD ZAHID
57068006 CHIEF EXEC M/S ZAHID
JEE TEXT MILLS
8 24 3445 B-3 9,207,587 SALLY TEXTILE MILL
55025009 LTD
9 24 3136 B-4 8,804,546 MASOOD TEXTILE
56018001 MILLS LTD CK 69 RB
10 24 3126 B-3 8,131,236 FAISALABAD
53061005
11 24 3134 B-3 7,018,963 RAFIQ SPINNING MILS
54063005 PVT L SHREEN WALA 20
KM SKP ROA
12 24 3137 B-3 6,795,446 M-S IHSAN FABRICS
57072000 FAISALABAD RD
13 24 3313 B-3 6,526,929 UJALA COTTON MILLS
53070008 CHAK G T T SINGH RD
14 24 3334 B-3 6,073,100 M/S MUKHTAR TEXTILE
54015000 CHAK NO 338 JB TEH
GOJRA
15 24 3137 B-3 5,988,304 BILAL FIBRES LTD TEH.
57063001 JRW
16 24 3321 B-3 5,851,572 HAJI MUHAMMAD
51019009 SALEEM CHAI CHENAB
FIBRES LTD CK.331
17 24 3453 B-3 5,775,396 MAPLE LEAFE CEMENT

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53001006 FACTOR LTD
18 24 3141 B-3 5,701,407 MAZHER KARIM
51018002 CRESCENT SPINNING
MILLS L
19 24 3323 B-3 5,104,256 JAVID TARIQ ACCORD
53020008 TEXTILE MILL RAJAN
20 24 3413 B-3 5,087,742 SARGODHA TEXTILE
53035000 MILLS LT UNIT 2
21 24 3346 B-3 4,953,744 SHAMAS TEXTILE MILLS
56017007 LTD FAISALABAD ROAD
22 24 3137 B-3 4,908,282 M/S FAISAL FABRICS
57094004 KHURRIAN WALA
23 24 3137 B-3 4,896,123 KOUSAR PROCESSING
57004003 INDUSTR CK 266
KHURAIAN WALA
24 24 3137 B-3 4,776,399 MIMA COTTON MILLS
57062002 LTD SKP ROAD
25 24 3137 B-3 4,751,272 PRIDE SPINNING MILLS
57048001 PVT SHAH KOT ROAD
26 24 3334 B-3 4,595,271 SAEED AHMAD HASEEB
54009008 SPINNI FATEH ABAD
27 24 3362 B-3 4,563,932 RIAZ HUSSAIN
52014006 C.E.SOFI TAXTILE
MILLS
28 24 3314 B-3 4,509,000 SHAKOOR AHMAD M-D
54010007 SHAH JEWNA TEXT
MILLS
29 24 3318 B-3 4,480,094 ASHIANA COTTON
58029008 PRODUCTS L GOJRA
ROAD
30 24 3137 B-3 4,405,503 ARZOO TEXTILE MILLS
57011004 PVT L KHURRIAN WALA

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EMPLOYEES BENEFIT PROGRAMME

Medical
In order to provide medical services to all the Wapda employees and their families Wapda has
set up an elaborate network of 14 hospitals land 39 dispensaries located at different stations and
cities in the country in addition to Wapda central hospital at Lahore that is the headquarters of
the organization. Wapda hospital complex provides comprehensive medical care and treatment,
both for in-door and out-door patients, with specialized attention and treatment in almost all-
medical disciplines. The smaller medical units look after the requirement at various Wapda
projects and other towns where Wapda officers have large concentration. All Wapda hospitals
and dispensaries attend to over 1.60 million patients during report year in their out-door
departments while their annual emergency and casualties attendance exceeds 0.101 million.
Besides the medical services include admission for in-door treatment to over 19,498 patients
during report both in Wapda and non-Wapda hospitals. Over 40526 surgical operations are
performed in Wapda hospitals in additions to specialized treatment for cardiac disease and other
serious and other serious surgical medical cases.

Education
In order to promote and maintain education in various Wapda colonies and projects, Wapda has
set up 45 educational institutions which provide education not only to children of employees
stationed in the respective areas but also to the adjacent non- Wapda population. These
institutions have performed exceedingly well with some remarkable results

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Pension
WAPDA employees are entitled to full pension on reaching the age of superannuation subject to
completing their minimum required service. In financial year 2000-01, as many as 7,875 pension
cases were processed involving payment of Rs. 2210.242 million.

Housing
In order to help Wapda employees build their own houses a number of cooperative housing
societies have been set up in various cities which purchase land and develop residential plots for
allotment to Wapda employees. The societies at Lahore and Gujranwala have been completed
while work on societies at Sheikhupura, Faisalabad, Peshawar, Quetta and other towns is in
progress.

Training
WAPDA is a second largest organization in Pakistan. To maintain tempo of work in such a large
organization, it is imperative to have standing arrangements for management and technical
training of the officers and staff.
Training activities are conducted in WAPDA to impart basic and advance knowledge to all
officers and staff during different stages of their career. A number of training institutes are
functioning at various places.

1WAPDA Staff College, Islamabad.


2WAPDA Engineering Academy, Faisalabad
3Regional Training Centers (RTCs)one each in Distribution
Companies.
1Technical Services Group, Lahore with Training Centre
at Terbela.Gatti (Faisalabad) and Kot Lakhpat Lahore
2Hydel Training Centre Mangia
During the year 2006-07, the existing training centers imparted training to 15,235 WAPDA
personnel of which 1,359 were officers (Grade 17 to 20) and the rest comprised supervisory staff
of different lower grades. Besides, 185 participants were trained from Government/ Semi
Government Departments, Autonomous bodies and various Industries and Private Organizations.

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Opportunity of training was also provided to 11 students from University of Engineering and
Technology, Lahore.

Insurance
WAPDA provides Group life insurance to all of its employees and arranges payment of sizeable
insurance amounts to the dependents of Wapda employees who expire during service. During
2000-01 over Rs. 90 million were paid to the families of 758decreased employees.

FESCO AS A COMPONY OF WAPDA


Basically the FESCO is a subsidiary of Pakistan WAPDA.

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INTRODUCTION TO WAPDA

WAPDA Means:
“WATER AND POWER DEVELOPMENT AUTHORITY”

Its name simply represent that, it’s the authority which deals with the waters problems in
Pakistan. It’s also deals with the power generation and its distribution in the country.

ESTABLISHMENT
WAPDA was setup under an ordinance issued in February 1958.this ordinance was subsequently
amended in March 1959. In that amendment the electricity department was transferred to
WAPDA as well.

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HISTORY OF THE ORGNIZATION

Pakistan is graciously bestowed with the bounty of water resources. The snow-clad peaks of
mountain ranges, in the north, generate the fortune. The descending snow-melt and monsoon
water flow into the country’s largest Indus River and its tributaries.
Passing through the plateau and the plain, across the Indus valley the rivers embrace the Arabian
Sea, in the south.
Irrigated agriculture being backbone of the country’s economy, this sector is the major use of
water, consumption to continue to dominate the water requirement. About 106 Million Acre Feet
(MAF) out of 157 MAF of surface water is being, annually, diverted to the Indus Basin Irrigation
System. It provides irrigation facilities to 365 Million acres. The country has a large cultivable
land base of 77 million acres. Hence the irrigated land base at present corresponds to 465 per
cent of the total cultivable area. Around 48 MAF is pumped from ground water. Direct rainfall
contributes less than 15 per cent of the water supplied to crops.
All the projects when completed were handed over to the respective provincial irrigation
departments except for Terbela and Chashma dams, Chashma Barrage and Chashma-Jhelum link
canal which remain with WAPDA for operation and maintenance (O&M) purposes.
A total of 1120 instruments were installed in the project to observe the pore water pressures,
settlement of the fill/foundation and lateral displacement.
Pakistan is among the countries of the world where the largest contiguous grid systems are
operative. Connecting the load centers with the power houses, the transmission system dots the
entire country.
It inherited 60 MW power generation capabilities for the population of 31.5 million when it
became independent state on 14th August, 1947. Only two small power stations, one Hydel at
Malakand in NWFP and one thermal near Lahore in Punjab province were in existence within its
geographical boundaries. Bulk of the supply was arranged from India’s Uhl river scheme.
For the first twelve years, the power generation, transmission and distribution systems remained
the domain of the provincial power departments. A few independent companies were, of course,
operating here and there in isolation. Feeling of need, the water and development Authority was
created in the beginning of year 1958 for well planned unified water and power resources of the
country. This was deemed essential in view of water resources and hydro-electric power

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potential available in abundance. One of the main objectives of its creation was to set the wheel
of the progress and development goes on independently free of the clutches and constraints of
the bureaucracy set ups. The retail part role of the utility was later on assigned to it through an
amendment in the WAPDA Act in March, 1959.
In transfer from the provinces, it gained 119 MW of hydroelectric and thermal small and medium
power stations. Along with came to it around 7000 kilometers of power disbursement
infrastructure, 300,000 customers.
A little over 500 villages were by then facilitated with the supply at their doorstep. The energy
production quantum at the time was nearly 780 million Kwh and sales were the order of 740
million Kwh. The revenue generation from sale of power was marginally above Rs. 70 million.
This country had entered the phase of progression by that time. A dependable and sound
infrastructure was therefore the requirement of the day. Being life line of the nation, electricity
was the key component. WAPDA rose to the occasion and treaded on the road of development
and progression. The journey goes on and it has by now accomplished numerous hydroelectric
and thermal power generation projects, matching transportation network and distribution system
to cater for the needs of the end consumers. Sustaining the load of the rapidly growing demand
of the electricity of the country always remained the hallmark.
The impact of the professional approach to find the solution to multifarious problems did not
take to show. Within five years of its becoming operational, the electricity generation capability
rose to 636 MW and the energy production shot up to 2,500 million kilowatt hours (MKWh)
from 781 MKWh (units) in 1959. Similarly the number of customers increased from 287
thousands to 688 thousands. Only 609 villages had been provided with the electricity facility by
1959. The number had increased to 1882 in 1965. The rapid progress infused a new life into the
social, industry and agriculture sectors to the good of the country’s economy. Subsequently,
mechanized farming took birth, industrialization picked up and living standard of the common
man improved.
The private sector inducted in the power system of Pakistan in the year 1994 continues to play its
role. Matching transmission lines, up to the capacity of 500 KV dotting the length and providing
the facility of the electricity to about 16.9 million customers in all the socio-economic sectors.
The facility has already been extended at the doorstep of
1, 17,468 villages where majority of the country’s population resides.

23
Transition to present Scenario

1WAPDA was set-up in 1958 to implement the Indus Basin Treaty as a “Development
Organization”.
2Achieved rapid growth during 2nd Five Year Plan (1960 – 1965) and “Hydro Electric
Capacity” increased from 67MW to 267MW. The “thermal generation capacity”
increased from 39MW to 560MW.
3Process of growth continued during the 3rd and 4th Five Year Plans.
4Oil price increases and political turmoil of 70s disrupted the continuous process of growth
and development.
In the coming five- year plans, the growth in generation capacity could not keep pace with the
increasing demand, due to financial constraints and other issues and by 1988 (6th Five Year Plan
1984-1988), WAPDA was suffering from a huge gap between its generation capability and the
customer demand.

1Organizationally WAPDA had gradually developed into a giant monolithic vertical utility
operated with inherent inefficiencies.
2By mid 1988, acute power shortages led to chronic load shedding and WAPDA initiated
“Demand Suppression” tariffs resulting in a culture of theft and inefficiency.
3In late 80s, the Government launched private power initiatives to establish in phases a
competitive and efficient Electric Power System covering generation, transmission and
distribution.
4In the 7th five year plan 1989-1993, the Government of Pakistan prepared a strategic
plan, which aimed at:
5Due to change of government in 1993 and shift of priorities in the Plan elements, the
restructuring process was stalled for time being and the full focus of 1994 Energy Policy
shifted to promotion of IPP’s.
6Effect of IPP’s coming on-line from 1997-1998 onwards was financially disastrous for an
already overburdened WAPDA and now beset with numerous problems.

24
1992 Strategic Plan for Pakistan Power Sector

Objective

Establish a competitive electric power system consisting of autonomous, financially viable,


efficiently operated and largely privately owned entities for generation, transmission and
distribution, governed by an independent regulatory authority

Two-pronged strategy

a) Encourage private sector investments in new thermal energy supply


facilities

b) Restructuring and partial privatization of the energy utilities

25
Formation of PEPCO

PEPCO was created in May 1998 as a Management Company, owned by Government


of Pakistan vested with the following corporate objectives

 The corporatization and commercialization of WAPDA’s assets block in


generation, transmission and distribution.
 Overseeing the design and implementation of the Manpower Transition
Program
 Stewardship of early business operations by the newly formed companies.
 Privatization initiatives.

Pakistan Electric Power Company is a Registered Company since May, 1998 under Companies
Ordinance 1984 (owned by Government of Pakistan) and started functioning since 14.04.1999. It
falls under the category of ‘Exempt Entity’ under Nam. It is a Management Company owned by
Government of Pakistan working under the Ministry of Water & Power.

The core operations of the company are

1To act as a managing agent in respect of all business, assets, properties and right of the
Power Wing.

2To carry on, expand, extend, privatize or restructure all businesses, assets, properties.
The company is responsible for restructuring WAPDA Power Functions into 12
(now 14) companies, establishing business relationship amongst them, help them become
administratively and financially self-sufficient, improving their efficiency and preparing them for
privatization. And reporting to Secretary, Ministry of Water and Power (Government of
Pakistan). There is a manual system of recording all the transactions under double entry system
according to companies’ ordinance 1984.

26
Size of Entity

1Total assets (as on 30-06-2008) = Rs. 8,827,794

2Total liabilities (as on 30-06-2008)= Rs. 1,727,744

3Total revenue (2008-2008) = Rs. 17,837,540

4Total expenditure (2008-2008) Rs. 17,837,540

5Total Budget (2008-2009) = Rs. 27.238 Million

Formation of NEPRA

National Electric Power Regulatory Authority (NEPRA) was created to regulate the
unbundled Power Sector in order to promote competitive power market to ensure reliable
power supply at affordable rates to millions of electricity customers in Pakistan. Major
responsibilities of NEPRA include:

 Issuance of licenses to the power utilities.


 Tariff determinations in a transparent manner.
 Establishment of performance standards for the utilities and their
monitoring.

27
Plans of the Reform Process
Corporatization

Corporatization of entities is first phase object of PEPCO which is in process and various
Milestones have been achieved and after corporatiztion second phase will be commercialization
and then finally all entities will privatize.

Corporatization Objectives

1Efficiency through corporate management for saving the


organization from the bureaucratic governance.
2Compliance with the corporate governance and Company
Ordinance
3Promoting professionalism in the organization for finding right
man for the right job.
4Adoption of dynamic and vibrant HR concepts in the organization
Corporatization Requirements

5Incorporation of Entities under Companies Ordinance


6Legal transfer of assets and liabilities to the corporate entities
7Manpower Transfer to the corporate entities and delegation of
financial and administrative powers ensuring autonomy of these
entities.
8Assignment of independent tariffs based on the cost of service
9Introduction of market structure capable of evolving (gradually)
towards a competitive regime
10Financial Restructuring

Development of Corporate Structure

11Corporate Structures of the 9 Distribution Companies, 4

28
Generation Companies and National Transmission and Dispatch
Company were developed which are under implementation by
the Companies and basic management put in place after
thorough search and selection of executives from open market/
WAPDA.
12PEPCO has given full assistance for the development of
operating systems and procedures of the Companies
commercial and technical manuals for operationalization.

Making Corporate Entities

Self-Driven, Confident and Forward Looking

PEPCO is focusing on preparing the companies for their future autonomous role.

1All Corporatized Entities have their own BODs and are operating as corporate entities.
2The managements of the companies have been urged to look ahead and chart out their own
business course in line with their company fundamentals and environment.

29
MANAGEMENTT OF THE ORGNIZATION
For the last forty-five years WAPDA has contributed in generating a large and competent work
force. The workforce concludes about 140,000 professionals, specialists, technicians and
engineers of various disciplines, scientists, economists, administrators, accountants, and men in
the related services, for planning, executing and managing projects in the field of water and
power development.

AUTHOURITY
Main authority of the WAPDA is the chairman. That heads the three wings: water wing, power
wing and co-ordination. The control of affairs through managing director to the general manager.
WAPDA is one of the largest employers of human resources in Pakistan. Over the years
WAPDA has built-up a reservoir of Technical know-how and expertise which has made it a
modern and progressive organization.

Shakeel Durani
(New Chairman)

Member (power)
[Muhammad Anwar Khalid]

Member (finance)
[Imtiaz Anjum]

Member (water)
[Muhammad Mushtaq ch]

30
WAPDA SECRETARY

Secretary WAPDA prepares minutes of the authority meetings, maintains a record of its
decisions, issues its directives, and co-ordinate between the three wings.
The power wing, being the developers and custodian for largest and most significant utility
service in the country, claims more than 80% of the total workforce, followed by water wing and
common services. The authority consisting of its chairman and its six members, one each for
power and eater wing and the finance department runs the entire organization. They control the
affairs of WAPDA through managing directors and the general managers in more or less than the
same pattern of hierarchy for each wing to divide the entire country in geographical zones for
streamlined operations in respective disciplines
For the last forty-four years WAPDA has contributed in generating a large and competent work
force. The workforce concludes about 150,000 professionals, specialists, technicians and
engineers of various disciplines, scientists, economists, administrators, accountants, and men in
the related services, for planning, executing and managing projects in the field of water and
power development.

31
ORGNIZATION CHART

Minister for water & Raja Parvaiz Ashraf


power
Secretary Ashfaq Mahmood

Shakeel Durrani
(Chairman)
Member Member Member
(power) (finance) (water)
Chief executive Secretary WAPDA General Manager
(P &D)

General Manager General Manager General Manager

(GSO) (Admn) (TARBELA)

General Manager General Manager General Manager

(GSC) (CCC) (WATER)

General Manager Director General General Manager


(PLANNING & (S&GA) (Technical Service)
POWER)

32
General Manager Director General General Manager
(High voltage & sctl) (Finance B&C) (Project South)

General Manager Director General Chief Executive


(WPPO) (S&I) (CPC)

Chief Executive Director(PR) Director


(Operations) (Intelligent)

Chief Executive Director(B&C) Chief Executive


(Admn)power (Ndp/ Central))

Director General Chief Auditor Chief Auditor


(POWER)

director

33
CHARTER OF DUTIES IN WAPDA

The charter of duties of WAPDA includes investigation, planning, and execution, of schemes in
the following fields
1Generation, transmission and distribution of power.
2Irrigation, water supply and drainage.
3Prevention of water logging and reclamation of water logged and Salind land.
2Flood control and inland navigation.
3Inland navigation.
The organization was also entrusted with the work of implementing Indus Basin Settlement plan
signed between India and Pakistan in 1960 to develop replacement works for management of
river water and irrigation system. The life saving action for Pakistan’s agriculture has been
WAPDA’s role in the field of water logging and salinity. During past four decades WAPDA has
planned and executed 60 scraps at a total cost of Rs.37.8 billion to cover an area of 19 million
acres of affected land for putting it back into production.

Funds Allocate By the Authority


WAPDA needs funds for its steadily expanding development programs and other functions in
terms of its charter. The Authority is entitled to draw upon Authority Fund, which consists of:

1Grants made by the Federal and Provincial Governments for specific jobs.
2Loans obtained from the Federal and Provincial Governments.
3Sale proceeds of WAPDA bonds issued under the authority of government.
4Loans obtained by the authority with the special or general sanction of the Government.
5Foreign aids and loans obtained from the IBRD, ADB and other International lending
agencies on such terms and conditions as may be approved by the Government.
6Sale of power.
7All other sums received by the Authority.
As a mean of self-sufficiency WAPDA is also required to finance a part of its power
development programs through funds rise from revenue surplus of the Electricity Operations
Branch. This is termed as self-financing the quantum of which is determined by the federal
government.

34
PROSPECTS AND DEVELOPMENT
WAPDA is one of the largest organizations in Pakistan today. It employs over 160,000 persons
in its regular and work charged cadres for the execution of various projects and operation of the
countrywide power distribution system.
Over the years, it has built up a reservoir of technical expertise that has made it into a modem
and progressive organization, which can be judged from the development that has taken place in
the fields of water and power resources.
Energy generation by WAPDA’s Power System has maintained a continuous upward trend rising
from 781 kWh in 1959-60 to 40791 million kWh in 1996-97.
Now in 2008 7826kmv.At the time of WAPDA’s take over of Power Management in 1959 the
length of transmission and distribution lines in the country about7000 kilometers, while the
numbers of grid stations were 59 with the total 810 MVA capacity.
By December 1997 the total length of transmission and distribution lines of various capacities
was 275410 kilometers. The number of grid stations has raised to 594 with transmission lines i.e.
220 kV and 500 kV; WAPDA is now able to transmit power from North to Punjab, Sindh and
Baluchistan. Now in December 2008 the total length of transmission is double.

35
FIELD OF ACTIVITIES

The field of activities is divided into THREE wings; which are following:
1: Water wing.

2: Power wing.

3: Finance/coordination wing.

WATER WING

Water is the most significant source in the country like Pakistan in which an overwhelming
majority of the population is dependent on agriculture as a source of living directly. Besides
agriculture produces constitute the basis of country’s economy and foreign exchange earning,
making water all the more important.
This wing functions under Member water for effective control. The entire country is divided into
central, south, north and west zones, covering the provinces of Punjab, Sindh, N.W.F.P, and
Baluchistan respectively, for execution of scarps and surface water development projects.
The multipurpose dams to Mangla and Terbela have supplied much-needed water supply for
winter crops and produced valuable hydel electricity as bye-product to give a broad base to
WAPDA’s vast and country wide national grid.
In 1959, WAPDA was created to undertake the task of investigating, planning and executing
schemes for irrigation, drainage, prevention of water logging and reclamation of saline land as an
autonomous body responsible for integrated development of water and power resources in
Pakistan. The organization was also entrusted with the work of implementing Indus Basin
Settlement Plan signed between India and Pakistan in 1960 to develop replacement works for
management of river water and irrigation system. Since then it has been engaged in building
water development projects which include extensive research and investigation to augment
country's water resources.
Member (Water) controls the water Sector in the entire country divided into north, central, south

36
zones, generally covering the North Western Frontier Provinces (NWFP) and the provinces of
Punjab and Sindh respectively, for execution of SCARPs and surface water development,
projects. Chief Engineers and Project Directors implement projects falling under regions within
the zone. In addition, the Water Wing has a C.E (Coordination and Monitoring) for construction
and operation of dams and all other projects under Water wing services (TS) and two separate
General Managers for Ghazi Barotha Hydropower and National Drainage Project. The Planning
Division of Water Wing, headed by a General Manager, looks after all planning activities on the
water side. The activities of water resources and hydropower. Development and vision-2025 are
handled by three General Managers i.e. Technical, South, North, GM (P&D) and GM Hydro
Development.
WAPDA provides a chain of services to its on-line consumers. You can use the links provided at
the top to conveniently receive any type of Customer Services while sitting at your home. The
sources of these services are reliable and follow-up is on regular basis.
Latest Policies/Orders regarding Installments Bills, Over Billing, M.C.O. of Meters, Lending
Meters, 300/Rs ACC New Schedule.

 Reconnection Policy.
 Exemption of Electricity Wiring Test Report.
 Installments of Bills.
 Complaints of Consumers Regarding Incorrect Meter Reading.
 Procedures for New Connection Change of Name Change of Tariff and Reduction/Extension
of Load.
 Lump sum Charges for New General Connections under Tariff A-1 and A-2 (Single Phase).
 Lump sum Charges for New General Connections under Tariff A-1 and A-2 (Three Phase).
 Relief Package for New Connections to B-1 Consumers (Load Up to 40 KW).
Supply of Power to ARC Furnaces.
 Supply of Power through 11 & 33 KV Feeders.
 Incentive Package for Industries.
 Incentive Package for All Seasonal Industries.
 Procedure for 7% Incentive on Advance Payment.

37
 Recovery of Arrears from Permanently Disconnected Consumers.
 Simplified new connection A&A form (CP-Form-03-A) Single Phase up to 4 KW.
 SOP at 400/230 volts to the Industrial and Tube well.
 Policy for Shifting of General Industrial and Tube well connections.
 Revision of the Installation and dismantling/shifting charges.
 Billing Procedure for unregistered consumers (Direct Hooking)
 Policy and Procedures on Detection Bills.
 Policy of detection billings to Domestic and Commercial Customers up to 4 KW.

Pakistan abounds in water resources comprising rivers and their tributaries, which constitute the
Indus river system, creating the World’s largest man made canal network. Every possible surface
and underground water resources utilization on large can not be over emphasized.

FUNCTIONS OF WATER WING


1The main purpose of water wing is irrigation, water supply and recreational use of water
resources.
2To eliminate the water logging and salinity.
3For eliminating the water logging and the salinity the Authority has given the task to water
wing to install tube wells in the effected areas.
A large number of Tube wells and drainage systems have been installed under these projects in
order to tower under ground water table and bring millions of acres of effected land back to
production, Number of land reclamation projects are in various batches of planning and
implementations of these projects will be according to the budget

PLANNING PROCEDURE
This division performs an important role in the management of country’s water resources for
agriculture and power development and finalizes the five year plans for Water Sector through the
following formalities:
1Environment and water resources planning organization (O&WRPO).
2Planning and investigating the organization.

38
3SCARP’s Monitoring Organization(SMO)
4Hydrology and water Management Organization (H&WM).
5Hydrology.

ACTIVITIES OF WATER WING

ENVIRONMENT AND WATER RESOURCES PLANNING ORGANIZATION


(E&WRPO)

Main functions of this organization are review water sector development plans, provide
information and guidance to project planners, undertake perspective planning studies and policy
issues, and furnish briefs, comments and technical notes for WAPDA and the Federal
Government from time to time.

PLANNING AND INVESTIGATING ORGANIZATION (P&I)

P&I is responsible for;


Survey and investigation, planning and designing and preparation of pre-feasibility reports of
water development projects.
Research related to irrigation and drainage in upper and lower regions of Indus Plan.
Agro-economic monitoring and evaluation of irrigation.

HYDROLOGY AND WATER MANAGEMENT ORGANIZATION (H&WM)

It is responsible for management of water from the Indus River System, country’s richest
water and power source, through its formations. It works under two directorates.

Power wing

After its creation in 1958 WAPDA took up its chartered duty of power development in Pakistan

39
in real earnest. It is structured as follows,

Headed by member power, three managing directors one of transmission and grid stations and
other for distribution and the final one for WAPDA power privatization organization. The M.D
distribution has eight general managers, one each for planning, engineering and standards,
administration, Finance, operations, purchasing and inventory control, Recovery Information
System, and Customer Services.
Power Wing has four Managing Directors, one each, for distribution, Generation, Transmission
and Grid Stations and WAPDA Power Privatization Organization (WPPO). The Managing
Director (Distribution) has six General Managers, one each for planning, engineering, and
standards (PE&S), finance, operation, purchasing and inventory control, information services
and the customer services.
The General Manager (Operation) has eight area Electricity Boards (AEBs) under him
comprising representatives from public, provincial engineers, accountants administrators and
technicians for construction, augmenting, maintain and run the entire power distribution system
covering all four provinces, except Karachi. The Managing Director (Generation) has three
General Managers, one for each power (Tarbela), thermal operation and thermal design and
development. The Managing Director (Transmission and Grid Station) heads Grid System
Construction (GSC), Grid System Operation (GSO

Power Wing is currently headed by Member (Power). Power wing of WAPDA comprising of
Generation, Transmission and Distribution has been restructured into fourteen (14) public limited
companies. These fourteen (14) Corporate Entities.

• Four (4) Thermal Power Generation Companies (GENCOs)


1] Southern Generation Power Company Limited (GENCO-1) head
quarter at Jamshoro district Dadu near Hyderabad Sindh.
2] Central Power Generation Company Limited (GENCO-2) head
quarter at Guddu district Jacobabad Sindh.
3] Northern Power Generation Company Limited (GENCO-3) head

40
quarters at TPS Muzaffargarh district Muzaffargarh Punjab.
4] Lakhra Power Generation Company Limited (GENCO-4)
Headquarter at WAPDA House Lahore.
• One (1) National Transmission & Power Dispatch Company (NTDC)

POWER DEVELOPMENT

At the time of independence, Pakistan inherited 60MW of power generation capability for
population of 31.5 million, yielding 4.5 per capita consumption. Twelve years later, when
WAPDA wad created in 1959, the generation capacity had increased to 119 MW. By that time
country had entered the phase of development which required a dependable and solid
infrastructure, electricity being its most significant part. The task of power development was
undertaken by WAPDA for executing a number of hydel and thermal generation projects, a
matching transmission network and a distribution system which could sustain the load of rapidly
increasing demand of electricity.

41
POWER GENERATION

WAPDA's hydro electric power generation capacity has increased from 4.826 MW to 5,010 MW
during this report year as a new power station, Chashma Hydro Power plant have in 184 MW
installed capacity has fully gone into operation and added to national grid, raising the number of
hydro electric power stations to 13. These power stations accumulatively produced around 17.19
billion KWH of electricity which was 10.85 percent less than the previous year's generation.
WAPDA's thermal generation facilities restructured into three limited Generation Companies
(GENCOs), having aggregate 3,935 MW rated capacity, generated a total of about 16.77 billion
KWH of energy.

Power Generation
HYDEL 64%
THERMAL 20%
IPPC 16%

FORMATION OF CORPORATIZED COMPANIES

As per Government of Pakistan policy, all the thermal power units of WAPDA have been
converted into three Corporatized companies, namely, Jamshoro Power Company Limited
(GENCO-I), Central Power Generation Company Limited (GENCO-II) and Northern Power
Generation Company Limited (GENCO-III). Under Companies Ordinance 1984, the commercial
operations were started on March 1, 1994 after when assets were actually handed over to the
Companies by WAPDA.

42
ENERGY GENERATION (GENCO-WISE) ON DIFFERENT
FUELS

Installed Capacity (MW)


Gas Furnace Coal Total
Oil
Jamshoro Power Company Limited 3296.067 1723.538 … 5019.605
Central Power Generation Company 7752.425 97.102 … 7849.526
Limited
Northern Power Generation Company 2317.197 6270.702 … 8587.889
Limited
Lakhra Power Generation Company … … 136.127 136.127
Limited
Grand Total 13365.688 8091342 136.127 21593.157

HYDEL GENERATION

The hydro-electric power component in WAPDA system with 13 power stations, having total
installed capacity of 5,010 MW, was 17,194.75 million units during the year. This was 2,093.055
million units or 10.85 percent less than the last year's energy generation because of low reservoir
levels at Tarbela and Mangia due to overall dry spell in the country.

PROJECTS ESTABLISHED UNDER ENERGY POLICY 1994


The Government of Pakistan Energy Policy, announced in 1994, for induction of private sector
in power generation offered a fixed tariff and a number of incentives with a view to attracting
foreign investment in the power sector for additionally of resources and sources to overcome
electric power shortage and thereby eliminate load shedding (brown out) in the country. Under
this policy, sixteen projects with a total capacity of 2,905 MW (net 2,662 MW) have achieved
financial closures. Subsequently, one project 4-e. Eeshatech Limited was rolled back amicably
with compensation to WAPDA. Eleven projects of independent Power Producers (IPPs) have
been commissioned up to June, 2001 while one such project, under testing is expected to be

43
commissioned in August, 2001. The commissioning of the remaining three projects has been
shifted beyond year 2008.

DETAILS OF THE PROJECT UNDER ENERGY POLICY 1994

Sr. Name Of Project Technology Gross Net Commercia To Be


No. Capaci Capacit l Operation Commissioned
y y Date
COMMISSIONED
1 Kohinoor Energy Diesel engines 131 120 20 June
Ltd. on fuel oil 1997
2 AES Lalpir Steam turbines 362 351 6 Nov1997
on fuel oil
3 AES Pak Gen 365 344 1 Feb1998

Steam turbines
on fuel oil
4 Southern Electric Diesel Engines 117 112 10 Mar
Power on fuel oil 1999

5 Habibullah Coastrol Combined cycle 140 126 11 Sept


Power on natural gas 1999

6 Fauji Kabirwala Combined cycle 157 150 21 Oct1999


Power on gas
7 Rousch (Pakistan) Combined cycle 412 352 11 Dec
Power on fuel oil 1999
8 Saba Power Steam turbines 125 123 31 Dec
on fuel oil 1999
9 Japan Power Diesel engines 120 107 14 Mar
Generation on fuel oil 2000

10 UCH Power Combined cycle 586 548 18 Oct 2000


on low btu gas

11 Altern Energy Flared gas 10.5 10 6 Jun 2003

TO BE
COMMISSIONED

44
12 Liberty Power Combined cycle 235 210 Aug 2001
on natural gas

13 Northern Electric Steam turbines 6 5.5 Feb 2008


on coal
14 Davis Energen Gas turbines on 10.5 10 Dec 2003
flared gas
15 Power Generation Diesel engines 116 110 June 2008
on fuel oil

NATIONAL TRANSMISSION & DISPATCH


COMPANY (NTDC)
National Transmission and Dispatch Company links power generation units and load centers
dotting the entire country, thus creating one of the largest contiguous grid systems of the world,
maintained by WAPDA-NTDC in Pakistan. This national grid connected hydel stations located
in the north, thermal units, in public and private sector, installed mostly in the central and
southern regions of the country with the load centers, consists of a large network of transmission
lines and grid stations of voltage capacities form 500 KV to 33 KV. NTDC is maintaining and
operating about 32,000 kilometers long transmission lines and 624 grid stations with 47
consumer's sub- stations of varying capacities all over the country.
An account of the performance and operation of various formations and projects, working under
NTDC, during the report year is concisely given below:

45
Transmission Arrangements for Power Dispersal of Ghazi Barotha Hydro
Power Projects

Ghazi Barotha Hydro Power Project, comprising 5 units of 290 MW capacity each, is
progressing and its first unit is establish to be commissioned in August, 2002. In order to
determine the most suitable transmission arrangements for power dispersal to the existing
WAPDA Grid System, numerous scenarios were studied in detail under the core programmed.
The eventual arrangement considered technically feasible was entrusted to the EHV department
for timely completion aided by consultancy services from the National engineer Services of
Pakistan (NESPAK).

Role of finance Division in power wing


1Finance advisor to the member {power} as well as any other case referred by authority to
this division
2Comment on different cases/financial matters referred by worthy general manager finance.
3Creation, retention and abolition along with evaluation of staff sanction pertaining to the
power wing up till now.
4Evaluation of contract and procurement cases up to 80 million as per financial power of
member {power}.
5Examination of reimbursement cases, advances payment for medical treatment.
6Write off cases and sanction of time barred claims.
7Vetting of financial aspects of the item notes pertaining to power wing to be submitted to
the authority.
8Examination of the cases of contract/daily wages employment in WAPDA.
9Implementation of minutes of authority meetings pertaining to power wing.
10Clarification/advice required by the lower formations pertaining to power wing.
11To sanction pension cases of en-block and referred to A.G office.
12To give comments on the demands submitted by CBA union for settlement with the
authority.
13Up-gration/down-gration of posts pertaining to power wing.

46
PROGRESS OF POWER WING IN CURRENT FINANCIAL YEAR

During the year, construction of 267.77 Km long transmission lines and 65 grid stations
(including extension, augmentation and replacement) was achieved.

GRID SYSTEM OPERATION

The GSO is maintaining as at present 634 grid stations and 31,929 km length of transmission
lines are presently to transmit about 57,157 GWH electricity annually, linking various power-
station to load centers through its four regions i.e. Lahore, Islamabad, Multan and Hyderabad.
These regions are availing technical expertise from Technical Services Group (TSG) and System
Protection. The Transformer Reclamation Workshop is also part of GSO.

NUMBER OF GRID STATION

Name of 500 KV 220 132 66 KV 33 KV Total Consumer


Region KV KV Grids
Lahore 5 12 135 61 5 218 16
Islamabad 5 10 117 58 8 198 28

Multan 3 6 70 46 2 127 9
2 8 112 41 2 165 7
Hyderabad
Grand 15 36 434 206 17 708 60
Total

47
Power Demand forecast

Power plan

During the plan period FY 1996-01, electricity consumption in WAPDA system grew at the rate
of 4.2 percent per annum. For the year 2001-20003 the maximum demand was 9,289 MW
excluding export of KESC and 9,609 MW is including export of KESC. For the year 2003-06,
the maximum demand was 112.718 MW excluding export to KESC and. 121,218 MW including
export to KESC.
For the two scenarios of power demand forecast for WAPDA power system corresponding to
two scenarios of energy sales at 8-9 percent and 7-8 percent for normal and low growth
respectively are adopted. The power demand of WAPDA system is forecast to increase at an
annual average compound growth rate of 5.2 percent and 6.7 percent in case of low growth
scenario/normal growth scenario respectively as given in table.

POWER PLANTS IN PRIVATE SECTION

The first big oil fired power plant HUBCO of 3,292 MW (4 x 323 MW) capacity on Balochistan
coast was completed in 1996-97 with subsequent construction of others in mid country. The total
installed capacity in the private sector up to June 2008 rose to 8,471 MW as under:

HUBCO 3292 MW
KAPCO 2638 MW
Kohinoor Energy 231 MW
AESLSIpirLtd 462 MW
AESPak Generation Ltd. 165 MW
Southern Electric 127 MW
Habibullah Energy Ltd. 140 MW
Rouch (Pak) Power Ltd. 512 MW

48
Saba Power Company 150 MW
Fauji Kabirwala1 77 MW
Japan Power Generation Ltd. 175 MW
Aaltern Energy Ltd. 51 MW
UCH Power 686 MW
TOTAL 8706 MW

INSTALLED GENERATING CAPACITY

As of June, 2008, the total installed generation capacity of WAPDA system, both public and
private was 17,726 MW i.e. hydel 7,009 MW, thermal 12,392 MW, nuclear 325 MW). Out of the
total thermal capacity of 101392 MW, 5,921 MW is owned by WAPDA and 6,471 MW is
private.

49
WAPDA POWER DEMAND FORECAST

Year Peak Demand (MW)


WAPDA System Country (WAPDA +KESC)
Normal Low Normal Low
2001-02 11337 10796 13186 12443
2002-03 12182 11385 14122 13071
G.R. (1998- 6.7% 5.2% 6.5% 4.9%
2003-04 13247 12067 15348 13831
2005-06 14393 12795 16670 14642
2006-07 15639 13565 18087 15483
2007-08 16994 14560 19625 16548
2008-08 18468 15627 21296 17689
G.R. (2003- 8.7% 6.5% 8.6% 6.2%
2008-09 20089 16930 23111 19080
2009-10 21944 18342 25214 20584
2011-12 23995 19872 27509 22209
2012-13 26195 21495 29975 23933
G.R. (2008- 28553 23215 32618 25757
2013-14 9.1% 8.2% 8.9% 7.8%
2014-15 31123 25072 35547 27784
2014-15 33924 27078 38746 29976
2015-16 36977 29244 42233 32341
2016-17 40305 31583 46034 34893
GR [2013] 9.2% 8.0% 9.0% 7.9%

50
FINANCE AND CORDINATION WING

Performance of Division OF the Finance & Coordination Wing


This division performed extensive security and review of the customers accounts maintained in
all revenue offices of WAPDA being the main activity performed by internal audit division,
which not only reports about the status of the functioning of the billing system and ensures
proper accounting for the revenue generated and collected against the electricity consumed by
the respective consumers thus creating tangible additional revenue for the authority.
The Director General WAPDA Audit carries out the statutory audit of WAPDA. The
international audit division functions as liaison between the statutory auditors and is also
responsible for processing the replies of the Authority to the audit reports by the Auditor
General.

MONITORING & SURVEILLANCE


The organization monitors implementation of water and power projects, lawful use of energy and
attendance to public complains.

FINANCIAL BUDGETING SYSTEM


The water wing of WAPDA is functioning as executing agency on the behalf of
Federal/Provincial Governments. The budget system of water wing originates from the
development project. Project directors assess the work to be done during the next financial year
and send their demands to the general managers concerned in November/December each year.
Director Finance Budget (Water) scrutinizes these demands on behalf of the general manager
finance (Water). GM Finance (Water) obtains the approval from Member (Water) and sends
consolidation budget of water of General Manger Finance (Co-ordination). Consolidation
demand of water and power wing duly approved by the Authority and sent to the Ministry of
water and power and forwarded to Planning Division for approval. Planning division after
necessary steps arranges a meeting in March, which is called Priority Committee Meeting. In this
meeting the projects are discussed according to the priority and the APCC and NEC
recommended final allocations. Then the total approved figures are intimated to the WAPDA

51
water wing for preparing the wise details, as the allocation is generally less than the demanded
by the Water Wing.
Final approval of the budget is, however, given by the Federal Cabinet and National Assembly.
As already stated WAPDA water wing is working on behalf of Federal/Provincial Governments.

ACHIEVEMENTS OF WAPDA
Achievements of WAPDA in the past 39 years have been unmatched by any other development
agency in the country. When WAPDA took over in 1958, the settlement with India over the
water usage of the Indus Basin Rivers was being negotiated. After the signing of the Indus
Waters Treaty in September, 1960, a colossal, task was entrusted to WAPDA to construct the
gigantic Indus Basin Project comprising works of two large dams at Mangla and Tarbela, five
barrages and eight inter-river link canals in a short period of ten years which was a great
achievement of WAPDA. Immediate impact was that Pakistan changed from a food short
country to a food surplus country. Subsequently, the population explosion in the country coupled
with a stalemate in the further development of water resources for creation of new storages and
lately the persistent low allocation of funds for water sector projects prohibited the maintenance
of earlier high level of efficiencies. The valuable experience is still in store with WAPDA. The
same efficiency in the management of water projects can be regained provided the funds once
committed at the start of the project are provided smoothly and timely as per WAPDA demands.
Under its charter of duty WAPDA has planned and investigated schemes for exploitation of
surface water resources, and has constructed medium size dams at Tanda, Khanpur and Hub.
Chablat Kas Irrigation scheme near Hasanabdal & Karachi (North Karachi) Irrigation scheme
were also executed.
Two large irrigation projects in NWFP and Balochistan have been taken up to extend irrigation
facilities to 0.57 million and 0.46 million acres respectively. The stages I & II of the Chashma
Right Bank Canal Project in NWFP have been completed which form about 50% of the entire
project. In the third stage, this canal is being extended into Punjab up to Dera Ghazi Khan. The
completed works under first two stages have already brought a change in the living standards of
inhabitants of D. I. Khan and the third stage promises prosperity to the farmers of D. G. Khan
when completed by the year 2000.
WAPDA Water Wing has brought about significant development in the Irrigation and

52
Agriculture sectors. It has planned and executed 56 Drainage Projects to reclaim or improve crop
cultivation conditions in 16.46 million acres of waterlogged lands. Of these projects, 28 are in
Punjab, 18 in Sindh, 8 in NWFP and 2 in Baluchistan. In this major effort, more than 15,000 tube
wells were drilled and 11,000 km of surface and 6,500 km of pipe drains were constructed to
enhance drainage in the high groundwater table areas. These projects have helped to increase the
irrigated areas by about 14 million acres and have enhanced cropping intensity from 70 to more
than 110 percent.

53
WORK DONE BY ME AS TRAINEE
As a trainee in FESCO (WAPDA) I had done my training in different departments as per
schedule. These departments are as follows:
1Internal Audit
2Budget and co-ordination (B&C)
3Finance (budget and accounts).

Internal Audit
WHOLE COMPANY
Rupees in thousand
S.NO AUDIT DETECTED DISPUTED ACCEPTED FOR BILLING OF REALIZATION BALANCE UN
PERIOD BILLING TO ACCEPTED AUDIT VERIFIED REALIZED
CONSUMERS A/C NOTES VERIFIED
A/NOTE AMOUNT A/NOTE AMOUNT A/NOTE AMOUNT A/NOTE AMOUNT A/NOTE AMOUNT A/NOTE AMOUNT
1 1977-78 0 4,983 0 - 0 4,983 0 4,983 0 4,983 0 -
2 1978-79 0 11,250 0 - 0 11,250 0 11,250 0 11,250 0 -
3 1979-80 0 7,867 0 - 0 7,867 0 7,867 0 7,867 0 -
4 1980-81 0 7,889 0 - 0 7,889 0 7,889 0 7,889 0 -
5 1981-82 0 7,511 0 - 0 7,511 0 7,511 0 7,511 0 -
6 1982-83 0 6,879 0 - 0 6,879 0 6,879 0 6,879 0 -
7 1983-84 0 12,039 0 - 0 12,039 0 12,039 0 12,039 0 -
8 1984-85 0 9,576 0 - 0 9,576 0 9,576 0 9,576 0 -
9 1985-86 0 18,104 0 - 0 18,104 0 18,104 0 18,104 0 -
10 1986-87 0 21,638 0 - 0 21,638 0 21,638 0 21,638 0 -
11 1987-88 0 15,510 0 - 0 15,510 0 15,510 0 15,510 0 -
12 1988-89 0 16,708 0 - 0 16,708 0 16,708 0 16,708 0 -
13 1989-90 0 20,400 0 - 0 20,400 0 20,400 0 20,400 0 -
14 1990-91 3827 22,784 0 - 3827 22,784 3813 22,570 3800 22,522 27 262
15 1991-92 3199 22,074 1 886 3198 21,188 3192 21,173 3183 21,069 15 119
16 1992-93 4426 25,566 5 413 4421 25,153 4414 24,909 4401 24,747 20 405
17 1993-94 3596 24,264 0 - 3596 24,264 3588 24,152 3574 23,992 22 272
18 1994-95 3000 22,799 0 - 3000 22,799 2995 22,443 2989 22,314 11 485
19 1995-96 5341 38,874 5 860 5336 38,015 5319 37,618 5300 36,907 36 1,107
20 1996-97 4401 30,291 0 - 4401 30,291 4390 29,983 4367 29,245 34 1,046
21 1997-98 4240 40,254 2 750 4238 39,503 4224 38,679 4196 38,151 42 1,352
22 1998-99 5663 51,962 12 1,484 5651 50,478 5623 50,270 5576 48,684 75 1,794
23 1999-2000 6219 54,781 2 201 6217 54,580 6212 54,409 6181 53,997 36 584
24 2000-2001 6288 43,262 7 291 6281 42,971 6278 42,848 6250 42,242 31 728
25 2001-2002 7458 32,326 2 119 7456 32,207 7456 32,207 7393 31,538 63 669
26 2002-2003 6175 34,825 0 - 6175 34,825 6175 34,825 6138 34,166 37 659
27 2003-2004 6893 42,899 1 41 6892 42,858 6891 42,833 6759 38,441 133 4,417
28 2004-2005 6856 42,885 24 3,800 6832 39,086 6798 38,764 6697 37,033 135 2,053
29 7/05 to 12/05 3288 35,311 123 8,176 3165 27,136 3153 27,082 3053 25,475 112 1,661
30 1/06 to 06/06 3569 51,438 256 21,121 3313 30,317 3285 29,827 3215 28,620 98 1,697
31 7/06 to 12/06 3856 65,353 508 26,037 3348 39,316 3014 34,263 2860 25,785 488 13,531
32 1/07 to 06/07 3681 55,598 488 30,090 3193 25,508 2890 19,821 2428 15,579 765 9,929
TOTAL 91976 897,901 1436 94,268 90540 803,634 89710 789,032 88360 760,863 2,180 42,771

54
Budget and co-ordination (B&C)

(B&C) department deals two things:


 Public sector development programmed(PSDP)
 Cash foreign exchange

 Public sector development programmed (PSDP)


PSDP is an annual document which lists all the public sector projects with specific allocation
made for each project. it indicates total cost of the project, foreign exchange component, local
currency component, expenditure incurred up the end of last financial year, allocation for the
current year.

Strategies for structuring public sector development programmed


Major share of the total development programmed is allocated to federal projects which relate to
major infrastructural sectors. reminders is allocated to the provinces.10% of the total provincial
allocation is allocated as special allocation to NWFP and Baluchistan and remaining 90%is
allocated among the four provinces an population basis. Budget and co-ordination department
control the PSDP.

 Cash foreign exchange


Cash foreign exchange means to buy the foreign currency from government and pay the pak
rupees. If WAPDA want to take a loan from foreign country then foreign country sent foreign
currency to government of Pakistan and government of Pakistan exchange this currency in pak
rupee.

Two main heads of cash foreign exchange:


I.Development
II.Non-Development
Development import
Development import means to pay the foreign currency in favor of new business started and
payment is made in pak rupee.s

55
Development invisible
Development invisible means to pay the foreign currency in favor of Services I.e. legal
consultants, advisor.

Non-Development import
To pay the foreign currency in favor of running business.

Non-Development invisible
To pay the money in running business i.e. services are hired to advisor or legal consultant.

Finance (budget and accounts)


In this department many type of cash books are to be prepared. They prepare the cash book.
1Different types of cash book are maintained under one department .i.e. medical, pension,
housing;
2Expenditure cash book is one in which only expenditures are recorded not the receipt
3The entries in the cash book are done through vouchers.

Finance (coordination & distribution):


This office work life cycle is as follows

Consumer Payments
(Electicity)

Payments to producer Banks

Order to pay with instructions to pay Revenue Officer

56
Information to Authority Finance Dir. of DISCOS

Manager Fin. (Treasury)


Bank account

57
FINANCIAL ANALYSIS
Residual Power Balance Sheet
As on June 30, 2008 (Rs. in “000”)
ASSETS 2008 2007 2006

109,999,259
116,971,755 120,657,988
16,995,662
9,476,564 12,099,674

NON-CURRENT ASSETS
Fixed Assets in operations
Capital work-in-progress
133,967,471 132,757,622 119,475,823
Long term investment 181,395,255 176,550,510 169,778,448
Notes receivables 59,880,588 53,165,384 68,862,288
------------------- ------------------- ----------------
375,243,227 362,473,556 358,116,559

1,256,427
1,121,982 1,223,818
181,743,343
51,457,514 111,723,064

11,563,667
18,462,531 8,823,880

CURRENT ASSETS
Stores and spares
Advances, deposits and
Other receivables
Cash and bank balances
194,563,437 121,770,762 71,042,027
------------------ ----------------- ----------------
TOTAL ASSETS 596,806,664 484,244,318 429,158,586
========== ========== =========

EQUITY AND LIABILITIES

58
Share capital 9,522,000 9,522,000 9,522,000
Revaluation surplus 6,859,699 6,859,699 ------
Investment by government 135,794,720 135,794,720 9,397,406
Accumulated profit 166,788,165 157,528,425 135,622,504
----------------- --------------- ---------------
318,964,584 309,704,844 284 765,685
GRANTS 8,880,011 8,880,011 8,880,011

NON-CURRENT LIABILITIES

107,538,328
109,429,68 103,250,380
5 8,000,000 8,000,000
2,2847,519
------------ 3,243,572
101,406
Long Term loans& Bonds
Liability under ijara financing
Defferd credits of GST

117,822,487 114,493,952 109,531,091


CURRENT LIABILITIES
18,217,088
9,845,367 10,092,584
4,089,231
77,629,214 31,293,323
3,675,480
36,664,641 9,779,604

Current maturity of loans& bonds


Short Term liabilities
Creditors, accured and other
Liabilities

124,139,222 51,165,511 25,981,799


------------ ---------------- ----------------
TOTAL EQUITY AND

59
LIABILITIES 569,806,664 484,244,318 429,158,586
======= =========== =========

60
Residual Power Wing Income Statement
For The Period Ended 30-06-2008 (rupees in“000”)
Description 2008 2007 2006
Electricity Sales 203,702,870 171,858,457 135,711,330
Costs of Electricity 178,994,445 147,424,189 112,877,183
----------------- ---------------- ----------------
Gross profit 24,708,425 24,434,268 22,834,147
Operating cost 13,521,849 13,001,501 12,552,962
------------------ ----------------- ---------------
Operating profit 11,186,576 11,432,767 10,281,185
Other income 5,869,776 8,128,325 7,975,399

------------------ ----------------- ---------------


17,056,352 19,561,092 18,256,584
Financial charges 7,750,369 8,059,421 7,719,419
------------------- ----------------- ---------------
Profit for the year 9.305,983 11,501,671 10,537,165
Prior year adjustments (46,243) 170,842 (313,390)
--------------- -------------- -----------------
Profit for the year after
Adjustment 9,259,740 11,672,513 10,223,775
Unappropriated profit B/F 157,528,425 45,855,912 135,622,504
---------------- ---------------- -----------------
Unappropriated profit C/F 166,788,165 157,528,425 145,846,279
---------------- ---------------- -----------------
Earning per share 977 1,208 1,107
========== ========= ==========

61
Residual-Power Wing Cash flow Statement
For The Year Ended June 30, 2008

(Rupees in ‘000’)
CASH FLOW FROM OPERATING ACTIVITIES
Profir for the years 9,259,740
Adjustment for:
Depriciation 5,289,223
Financial charges 7,750,369
Interest Income ,619,557)
Dividend income (2,873,227)

Cash flow before working capital changes 17,806,548


(Increase)/Decrease in current assets:
Stores & Spares (32,609)
Advance deposits and other receivables (70,020,279)
Increase/(Decrease) in current liabilities
Current maturity of loans (247,217)
Short term liabilities 46,335,891
Creditors, accrued and other liabilities 26,885,037
2,920,823
Cash generated from operations 20,727,371
Financial charges paid (7,750,369)
A). Net Cash flow from operating activities 12,977,002

62
CASH FLOW FROM INVESTING ACTIVITIES
Addition & Disposal of fixed assets (1,602,990)
Capital work in progress (4,895,988)
Long term Investment (4,844,712)
Notes receivables (6,715,204)
Interest received 1,619,557
Dividend received 2,873.277

B). Net Cash flow from investing activities (13,566,110)


CASH FLOW FROM FINANCING ACTIVITIES

Long term loans 4,287,948


Deferred credits of GST (959,053)

C). Net cash flow from financing activities 3,328,895

Net Increase/(Decrease) in cash or cash equivalent (A, B & C) 2,739,787


Cash & Cash Equivalent at the beginning of the year 8,823,880
Cash & Cash Equivalent at the end of the year 11,563,667
==========

63
TREND ANALYSIS
Horizontal Analysis
Residual Power Wing Income Statement
For The Period Ended 30-06-2008 (rupees in “000”)
DESCRIPTION 2007 2008 %(AGE)

Electricity Sales 171,858,457 203,702,870 18.5

Costs of Electricity 147,424,189 178,994,445 21.4

Gross profit 24,434,268 24,708,425 1.12

Operating cost 13,001,501 13,521,849 4

Operating profit 11,432,767 11,186,576 (2.2)

Other income 8,128,325 5,869,776 (27.8)

Income before tax 19,561,092 17,056,352 (12.8)

Financial charges 8,059,421 7,750,369 (3.8)

Profit for the year 11,501,671 9,305,983 (19.1)

64
RATIO ANALYSIS: (Rupees in “000”)

1: LIQUIDITY RATIO:

I.CURRENT RATIO:

FORMULA = Current Assets

Current Liabilities

Year Current Current Current

Assets Liabilities Ratio


2005-06 710,420,27 25,981,799 2.73
2006-07 121,481,650 50,876,399 2.39
2007-08 194,563,437 124,139,222 1.57

QUICK RATIO:

FORMULA = Current Assets ---_Quick assets:

Current liabilities

Year (Current Assets – Quick Current Ratio


Assets) Liabilities
2005-06 (71,042,027 – 1,121,982) 25,981,799 2.69

2006-07 (121,481,650 –1,223,818) 50,876,399 2.36


2007-08 (194,563,437 – 1,256,427) 124,139,222 1.56

NET WORKING CAPITAL:


FORMULA = current assets---- current liabilities
Year Current Current Net Working
Assets Liabilities Capital
2005-06 71,042,027 25,981,799 45060228
2006-07 121,481,650 508,763,399 70605250
2007-08 194,563,437 124,139,222 70424215

65
2: DEBT RATIO:

FORMULA = Total liabilities * 100


Total assets

Year Total Total Assets Ratio


Liabilities
2005-06 135, 512,890 429,158,5 31.6%
2006-07 16,567,035 483,955,206 34.2%
2007-08 241,962,069 569,806,664 42%

3: ACTIVITY RATIO:
TOTAL ASSETS TURN OVER:
FORMULA = Sales
Total .Assets

Year Sales Total Assets Assets


Turnover
2005-06 135,711,330 429,158,5 0.32
2006-07 171,858,457 483,955,206 0.35
2007-08 203,702,870 569,806,664 0.36

4: PROFITABILITY RATIO:

GROSS PROFIT MARGIN:

FORMULA = Gross Profit


Sales

Year Gross Profit Sales Gross Profit

66
Margin
2005-06 22,834,147 135,711,330 16.8%
2006-07 24,434,268 171,858,457 14.2%
2007-08 24,708,425 203,702,870 13.6%

OPERATING PROFIT MARGIN:

FORMULA = Operating Profit


Sales

Year Operating Sales Operating


Profit Profit
Margin
2005-06 10,281,185 135,711,330 7.57%
2006-07 11,432,767 171,858,457 6.65%
2007-08 11,186,576 203,702,870 5.49%

NET PROFIT MARGIN:

FORMULA = Net Profit


Sales
Year Net Profit Sales Net Profit
Margin
2005-06 10,537,165 135,711,330 7.76%
2006-07 11,501,671 171,858,457 6.69%
2007-08 9,305,983 203,702,870 4.57%

NET PROFIT TO EQUITY RATIO:


FORMULA = Net profit
Common equity

67
Year Net Profit Common Net Profit to
Equity Equity
Ratio
2005-06 10,537,165 155,368,279 6.78%
2006-07 11,501,671 173,910,124 6.61%
2007-08 9,305,983 183,169,864 5.08%

RETURN ON TOTAL ASSETS:


FORMULA = Net profit
Total Assets
Year Net Profit Total Assets Return On
Assets
2005-06 10,537,165 429,158,5 2.45%
2006-07 11,501,671 483,955,206 2.38%
2007-08 9,305,983 569,806,664 1.63%

EARNING PER SHARE:

FORMULA = Net profit


No of equity shares
Year Net Profit No of Equity Earning Per
Shares Share
2005-06 10,537,165 9,522 1,107
2006-07 11,501,671 9,522 1,208
2007-08 9,305,983 9,522 977

BOOK VALUE OF SHARE:

FORMULA = Net Worth

Paid Up Capital

Year Net Worth Paid Up Book Value Of

Capital Share
2005-06 5,688,800,194 9,522,000 598

68
2006-07 5,853,310,657 9,522,000 615
2007-08 6,017,821,120 9,522,000 632

69
TREND ANALYSIS

HORIZONTAL ANALYSIS

Residual power wing income statement

For the period ended 30-06-2008


(Rupees in“000”)
Description 2008 2008 %(AGE) 2008 %(AGE)

Electricity 135,711,33 171,858,45 26.6 203,702,87 18.5


Sales 0 7 0
Costs of 112,877,18 147,424,18 30.6 178,994,44 21.4
Electricity 3 9 5
Gross profit 22,834,14 24,434,26 7.00 24,708,42 1.12
7 8 5
Operating cost 12,552,962 13,001,501 3.57 13,521,849 4

Operating 10,281,18 11,432,76 11.2 11,186,57 (2.2)


profit 5 7 6
Other income 7,975,399 8,128,325 1.91 5,869,776 (27.8)

Income before 18,256,584 19,561,092 7.14 17,056,352 (12.8)


tax

Financial 7,719,419 8,059,421 4.40 7,750,369 (3.8)


charges

Profit for the 10,537,16 11,501,67 9.15 9,305,983 (19.1)


year 5 1

70
Residual power wing Balance sheet
As on 30-06-2008
(rupees in “000”)

ASSETS 2008 2008 % 2008 %(AGE)


(AGE)

NON-
CURRENT
ASSETS

Fixed Assets 109,999,259 120,657,988 9.69 116,971,775 (3.1)


in operations
Capital work- 9,476,564 12,099,674 27.7 16,995,662 40
in-progress

Long 169,778,448 176,550,510 3.98 181,395,222 2.7


Term
investment
Notes 68,862,288 53,165,384 (22.8) 59,880,588 12.6
receivables
CURRENT
ASSETS

Stores and 1,121,982 1,223,818 9.08 1,256,427 2.7


spares
Advances, 51,457,514 111,723,064 117 181,743,343 62.7
deposits

Cash and 18,462,531 8,823,880 (52.2) 11,563,667 23.69


bank
balances

71
TOTAL 429,158,58 484,244,31 12.8 569,806,66 17.67
ASSETS 6 8 4

EQUITY AND
LIABILITIES

Share capital 9,522,000 9,522,000 ------- 9,522,000 ………

Investment 129,397,406 135,794,720 4.94 135,794,720 ………


by
government
Accumulated 145,846,279 157,528,425 8.01 166,788,165 5.88
profit
GRANTS 8,880,011 8,880,011 ---- 8,880,011 ……….

NON- -------
CURRENT
LIABILITIES

Long Term 109,429,685 103,250,380 (5.64) 107,538,328 4.15


loans& Bonds

Deffered 101,406 3,243,572 3098.5 2,284,519 (29.6)


credits of GST

CURRENT
LIABILITIES

Current 18,217,088 10,092,584 (44.5) 9,845,367 (2.45)


maturity of
loans& bonds

72
Short term 4,089,231 31,293,323 665.2 77,629,241 148
liabilities
Creditors, 3,675,480 9,779,604 158.2 36,664,641 275
liability
TOTAL 429,158,58 484,244,31 12.83 569,806,66 17.7
EQUITY AND 6 8 4
LIABILITIY
LIABILITIES

73
VERTICAL ANALYSIS

Total Revenue = Sales + Other income

Total Revenue of 2008 = 135,711,330 + 7,975,399 = 143,686,729

Total Revenue of 2008 =171,858,457 + 8,128,325 = 179,986,782

Total Revenue of 2008 = 203,702,870 + 5,869,776 = 209,572,646

Residual power wing income statement

For the period ended 30-06-2008


(rupees“000”)
Description 2008 %( AGE) 2008 %(AGE)

Electricity Sales 171,858,457 95 203,702,870 97

Costs of Electricity 147,424,189 82 178,994,445 85

Gross profit 24,434,268 14 24,708,425 12

Operating cost 13,001,501 7 13,521,849 6

Operating profit 11,432,767 6 11,186,576 5

Other income 8,128,325 5 5,869,776 3

Income before tax 19,561,092 4 17,056,352 8

Financial charges 8,059,421 6 7,750,369 4

Profit for the year 11,501,671 9.15 9,305,983 4

Residual power wing Balance sheet

74
As on 30-06-2008
(rupees in “000”)

ASSETS 2006 2007 %(AGE) 2008 %(AGE)

NON-CURRENT
ASSETS

Fixed Assets in 109,999,25 120,657,98 9.69 116,971,775 (3.1)


operations 9 8
Capital work-in- 9,476,564 12,099,674 27.7 16,995,662 40
progress

Long 169,778,44 176,550,51 3.98 181,395,222 2.7


Term investment 8 0

Notes receivables 68,862,288 53,165,384 (22.8) 59,880,588 12.6

CURRENT
ASSETS

Stores and spares 1,121,982 1,223,818 9.08 1,256,427 2.7

Advances, deposits 51,457,514 111,723,06 117 181,743,343 62.7


4
Cash and bank 18,462,5 8,823,880 (52.2) 11,563,667 23.69
31
balances

TOTAL 429,158 484,244,31 12.8 569,806,66 17.67


ASSETS ,586 8 4

75
EQUITY
AND
LIABILITIES

Share 9,522,000 9,522,000 ------- 9,522,000 ………


capital
Investment 129,397,406 135,794,720 4.94 135,794,720 ………
by
government
Accumulate 145,846,279 157,528,425 8.01 166,788,165 5.88
d profit
GRANTS 8,880,011 8,880,011 ---- 8,880,011 ……….

NON- -------
CURRENT
LIABILITIES

Long Term 109,429,685 103,250,380 (5.64) 107,538,328 4.15


loans&
Bonds

Defferd 101,406 3,243,572 3098. 2,284,519 (29.6)


credits of 5
GST

CURRENT
LIABILITIES

Current 18,217,088 10,092,584 (44.5) 9,845,367 (2.45)


maturity of
loans&
bonds

76
Short term 4,089,231 31,293,323 665.2 77,629,241 148
liabilities
Creditors, 3,675,480 9,779,604 158.2 36,664,641 275
liability
TOTAL 429,158,58 484,244,31 12.83 569,806,66 17.7
EQUITY 6 8 4
AND
LIABILITIY
LIABILITIE
S

VERTICAL ANALYSIS:

Residual power wing income statement

For the period ended 30-06-2008

77
(rupees in“000”)
Description 2006 2007 %(AGE) 2008 %(AGE)
Inc(Dec) Inc(Dec)
Electricity Sales 135,711,330 171,858,457 95.4 203,702,870 97.19

Costs of Electricity 112,877,183 147,424,189 81.9 178,994,445 85.4

Gross profit 22,834,147 24,434,268 13.5 24,708,425 11.78

Operating cost 12,552,962 13,001,501 7.22 13,521,849 6.45

Operating profit 10,281,185 11,432,767 6.35 11,186,576 5.33

Other income 7,975,399 8,128,325 4.51 5,869,776 2.80

Income before tax 18,256,584 19,561,032 10.86 17,056,352 8.14

Financial charges 7,719,419 8,059,421 4.47 7,750,369 3.70

Profit for the year 10,537,165 11,501,671 6.39 9,305,983 6.39

Concluding Remarks for Analysis:

1: LIQUIDITY RATIO:
The liquidity of an organization is measured by its ability to satisfy its short term
obligations as they come due. The current ratio of an organization is 2.37 in 2005-06, 2.39 in
2006-07 which indicates not good performance increase in 2007-08, which is 1.57 liquidity ratio
should be maximum.
Quick ratio is 2.69 which indicates easily convertible stock in to cash and reduced in 2006-07,

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which are 2.36, and further reduced in 2007-08, which are 1.56 the overall liquidity position of
the organization is not a fair.

2: ACTIVITY RATIO:
Activity ratio measures the speed with which various account are converted into
sales or cash. Asset turn over in 2005-06 is 0.32, in 2006-07, 0.35, which increases, and in 2007-
08 which are 0.36.it show the goods position of the organization. Assets turn over ratio should be
maximum.

3: DEBT RATIO:
The position of the firm indicates the amount of other people’s money being used to
generate profits. The debt position of WAPDA is also not a good.beacuse in 2005-06, debt ratio
is 31.6% which reduced in 2006-07, is 34.6 % and in 2007-08, 42%which is increase than the
previous year, debt ratio of the organization should be minimum. But here is not a fair position.
Debt ratio should be minimum.
4: PROFITABLITY RATIO:
These ratios measure the results of the business operations or overall performance and
effectiveness of the company. Profitability ratios are calculated either in relation to sales or in
relation to investment. Profitability ratio measure the profit of the organization. Gross profit
margin in 2005-06, is 16.8% and next year in 2006-07, 14.2% and in 2007-08 reduced
13.6%which show not a good position. Net profit margin in 2005-06, is 7.76% which reduced in
2006-07, is 6.69%, and further reduced in 2007-08 which is 5.47%.
Return on total assets in 2005-06, is 2.45% which reduced in 2006-07, which is 2.38%and in
2007-08 which are 1.63%its shows that the Wapda assets are not sufficient to pay its long terms
debts. The financial position is considered to be sound if the owner’s interest is greater than that
of creditor’s. In other words, the position of the business is highly solvent. Earning per share and
book value per share increases every year.
Overall position is not a fair because every ratio show no the satisfactory result., except earning
per share and book value per share So, we can say year 2007-08, WAPDA is still loss position,
because financial analysis of the organization is not a good and satisfactory results.

79
80
PROBLEMS FACING BY WAPDA

PRIVATIZATION
The Process of Corporatization was started in 1991 and was restarted in 1997. This is a three
year process during which WAPDA shall be the shareholder after which these 12 companies will
be privatized.
The major problem which is facing my Wapda is the privatization. Wapda is privatizing
its companies, which is not in favor Wapda, because when these companies are become
private. They make there own policies. They make there own price of electricity, which
will creates electricity price controlling problem for Wapda.

LOYALITY PAYMENT PROBLEM


Wapda has to pay round about Rs. 6 billion as loyalty to the N.W.F.P, which is simply a burden
on Wapda. The Wapda authorizes are trying to reduce it, but our politician are trying to increase
it up to Rs.12 billion.

BANK CHARGES PROBLEM

Another problem which is Wapda facing today is the bank charges on the collection of bills.
The banks increased there charges on bills collection without Wapda approval.

LINE LOSSES
Another major problem which is Wapda is facing today is the line losses. Which can be stated as
follows?

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DISTRIBUTION OF LOSSES UNITS TO GENERATIONS CO

JAN08 %AGE
LOSSES
COMPANIES UNITS UNITS UNITS Jun-07 Jun-08 INC/DEC
RECEIVED BILLED LOST
LESCO 1568.4 1258.2 352.5 22.5 19.5 3.0
GEPCO 987.5 563.2 121.5 12.3 11.31.0
FESCO 728.45 784.5 105.3 14.5 12.8 1.7
IESCO 645.3 521.1 95.3 14.8 11.5 3.3
MEPCO 1058.6 745.2 243.2 23.0 15.2 7.8
PESCO 987.56 583.83 198.5 20.0 18.2 1.8
FATA 406.2 149.97 74.1 18.1 15.1 3.0
HESCO 856.2 854.49 193.1 22.5 21.4 1.1
QESCO 502.4 426.12 65.6 13.1 12.9 0.2
KESC.EXP 745.6 547.93 10.2 1.37 1.05 0.32
IPPS 4.25 5.08 9.02 0.02 0.01 0.01
TOTAL 7634.26 6439.621468.32 162.19 138.96 23.23

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NOT FREE IN MAKING DECISION

Construction of Kalabagh Dam is still on papers since a decade because of restricted political
environment in Pakistan.
Same in the case with the contracts with IPPC. Before making the contract the Wapda authority
was not to be allows asking any question about the deal. The politician has made this contract
with out Wapda influence.

HIGER PAYMENTS TO IPPC


The higher payments to IPPC are the big problem for Wapda. Whether Wapda use there
electricity or not, but Wapda has to pay for some particular production, which is only a curse for
Wapda.

BILLING PROBLEMS
Billing is also the big problem for Wapda. Many government departments Big industrialists and
tribal areas are not paying there bills. Only from FATA Wapda has to collect Rs.32 billion.

LOW PROFIT
Although WAPDA has earned Profit of Rs. 10,856,104 during current year 2000-01 but this
profit is very low as compared to previous year profit which was Rs. 17,329,540. This decrease
in Profit of WAPDA is manly due to very high electricity cost and other operating coasts (Rs.
61,466,489 in 1999-2000 and Rs. 85,076,052 in 2000-2001).

Tariff Rates
NEPRA, the authority to regulate electricity prices in the country, has recently revised the tariff
rates and due to this revision, tariff has been increased by 11 paisa per KWH.As electricity is
already very costly and due to this revision it will become more expensive and economy will
suffer.

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LONG TERM DEBTS
Long-Term Debts of WAPDA has increased from Rs. 168,321,646 to Rs. 258,397,624. This
increase in Long-Term debts is not good indication for WAPDA because due to this increase
WAPDA has to pay more interest as shown in profit and loss Account of Power Wing of
WAPDA.

BANK CHARGES PROBLEM


Another problem which is Wapda facing today is the bank charges on the collection of bills. The
banks increased there charges on bills collection with out Wapda approval.

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SUGGESTIONS & RECOMMENDATIONS
PRIVATIZATION
Wapda should not privatize all its companies. In my opinion if these companies will work under
one authority it will be better for economy as well as for Wapda too.

CONTROL OF LINE LOSSES


The line losses can be controlled by regular check on lines, meters of commercial as well as for
industrial sector. It will reduce Wapda cost and will increase its profit.

DECREASING BANKING CHARGES


The Wapda authority should negotiate with banks to decrease there charges, because the effect of
higher charges is ultimately has to be bear by the end user, due to which the economy will suffer.

FINANCIAL CHARGES
The financial charges of WAPDA have also increased by Rs. 187,706 and this increase in
financial charges has resulted in the reduction of profit of WAPDA. In order to earn more profit
WAPDA should control these financial Charges rather should reduce these financial charges.

ELECTRICITY COST
Although WAPDA has earned Profit of Rs. 11,501,671 million during current year 2006-07 but
this profit is very low as compared to previous year profit which was Rs. 10,537,165 million.
This decrease in Profit of WAPDA is manly due to very high electricity cost and other operating
coasts (Rs. 12,552,962) in 2004-2008 and Rs.13,001,501).In my opining WAPDA should reduce
these electricity and other Operating costs if it wants to earn high profits.

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INVESTMENT IN OTHER BUSINESS
WAPDA should also invest in some profitable business like share of different companies
except the sale of electricity.

FREE IN MAKING DECISION


Wapda is an independent organization so it should be independent in decision making. If the
Wapda is free in decision making, it will reduce its extra cost such as loyalty cost, IPPC
payments, etc.

HYDROPOWER PROJECTS
Incentives should be given to foreign investors who are interested to build hydropower projects
in northern areas of Pakistan.

FAIR PAYMENT OF ELECTRICITY BILLS


It is well known that big industrialist and land lords especially of out tribal areas do not make fair
payment of electricity bills. Due to this unfair payment WAPDA as well as economy suffers. So
these industrialists and landlords should be completed by the state to pays their electricity bill
fairly.

CONTRACTS WITH IPP


The contracts of IPP most be eliminated as soon as possible because they sell electricity to
WAPDA sell electricity to consumers at considerable low rates, due to which not only WAPDA
but economy also suffers.

LONG TERM DEBTS


Long-Term Debts of WAPDA has increased from Rs. 168,321,646 to Rs 178,397,624. This
increase in Long-Term debts is not good indication for WAPDA because due to this increase
WAPDA has to pay more interest as shown in profit and loss Account of Power Wing of
WAPDA. So, WAPDA should reduce these long term debts, if it wants to earn more profit.

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REDUSE IN TARIFF RATES
NEPRA, the authority to regulate electricity prices in the country, has recently revised the tariff
rates and due to this revision, tariff has been increased by 11 paisa per KWH.As electricity is
already very costly and due to this revision it will become more expensive and economy will
suffer. In order to flourish economy, NEPRA should reduce the cost of electricity.

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CONCLUSION

To conclude, 6 weeks internship programmed was a good chance for me in FESCO (WAPDA).
During the internship programme I observed that FESCO WAPDA have four authorities which
run to it.
First authority is the WAPDA chairman (shakeel durani) which is the highest authority in
WAPDA and then three members of WAPDA wings, which is:
Water wing (Syed Raghib Abbas]
Power Wing [M. Fazal Ahmed]
Finance& coordination (Ch. Abdul Qadeer]
Power wing of WAPDA is to generate the power resources in the country and generate the
electricity through HYDEL (from water) , THERMAL (from coal, gas) and give it to nine
distribution companies and distribution companies give its to consumer
Water wing of WAPDA is to locate the places where water can be stored for further uses &
generate the electricity, because water is the main source for generate the electricity in the
country. Water comes from snow hills and underground which can be stored for further used.
Water wing also work and maintenances the water dams in the country.
Finance/coordination wing prepared the budget of both wing .i.e. power wings, water wings and
also approval and borrow the loan to other countries for running the projects of both wings.
Chairman is the highest authority in WAPDA which controls the overall three wings. The most
important thing is that WAPDA is still loss during 4 to 5 years and if want to reduce the loss, the
privatization is the best solution. WAPDA loss can be reduced due to privatization.
Wapda, in my view, by submitting the present proposal has raised a valid point for consideration
by the Government. Naturally the calculations made by Wapda in arriving at the need for
additional capacity will be checked thoroughly at various levels including at the level of IFIs.
The comments and criticism on the proposal for new thermal capacity will help a lot in that
Wapda and other institutions in similar position will in future make such proposals only after
justification is established and is in the best interest of the country. The debate in my view has
renewed the need for finalizing the Power Policy-2002, as in the absence of such a policy
document; no IPP might be financed or set up in private sector in the country. Let this draft

88
Policy be thoroughly debated at different forums and finalized after incorporating necessary
checks and balances on all important issues, in the light of past experience. The stakeholders
should not block the progress of essential national projects on flimsy grounds or to reap political
gains. This Policy should reflect the aspirations of different stakeholders in the best interest of
Pakistan.

I.

89