MEPCO Internship Report

INTERNSHIP REPORT ON MEPCO
(WAPDA)
MBA Finance
2011-2014
A Directory to the
Report
Adnan Akhtar (MB-11-65) | Institute of Management Sciences
MBA Finance

(WAPDA)
1. Preface
2011-2014
03
2. Acknowledgment ..
04
3. Dedication ..
05
4. Executive Summary
06
5. Purpose of Study
08
6. MEPCO Introduction ..
09
a. History of MEPCO .
11
b. Vision, Mission
12
7. Technical Overview.
16
8. Organization Structure
18
9. Top Management...
19
10. WAPDA Introduction .
23
11. Competitors
43
12. Departments .
48
13. SWOT Analysis
69
14. Porters 05 Forces Analysis .
74
15. PEST Analysis ..
75
16. My Working in MEPCO ..
80
17. Conclusion and Recommendations..
84
18. Financial Analysis
89
19. References and sources used
100
MBA Finance

(WAPDA)
2011-2014
Some words about the Report

Genius makes its observations in shorthand; talent writes them out at
length.
"Christian Nevell Bovee"

Nothing has such power to broaden the mind as the ability to
investigate
systematically and
truly
all that
comes
under
thy
OBSERVATION in life.
"Marcus Aurelius"
As mentioned by the above quotations observing and on site
viewing are a very firm base for learning. We learn a lot more by seeing
the theories, we read in books, applied practically by the pros and by
seeing how they actually put them to work.
Team building and teams are an important part of the business as we
see it today and a large emphasis is given to them in the modern
business world.
Organizations make systems to accomplish tasks and to increase
efficiency in their work. When it came to choosing the organization of
the MEPCO became the first thing to the mind of the team members.
The effective system at MEPCO was a piece of art and to see it in
working process was a treat itself.
It is hoped that the conducted study and the compiled report will provide
a source of comprehensive information and a complete internship report
on the topic as well as on the organization.

(WAPDA)
MBA Finance
2011
2011-2014
Absolute praise for Almighty Allah, provider of hope, guidance and

knowledge without whose constant remembrance I would not have overcome
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.
I want to give a special thanks to Mr. Irfan Azeez (Accounts Officer)
who gave me their full support and guided me throughout this report and he
should be given credit on top of all for this collection of knowledge.
I like to express my gratitude to Mr. Mubashir (Accounts),, who helped
me by providing all the needed information I needed to complete this report
At the end I would also like to thanks my parents who motivated me and
that motivation led to the successful completio
completion
n of the report and also all my
mates who took time out
ou of their busy lives to help me complete this report.
repo

(WAPDA)
MBA Finance
2011-2014
Dedication
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.
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.

(WAPDA)
MBA Finance
2011-2014
Executive summary
Experience is not what happens to you, it is what you do with what happens to
you.
-Aldous Huxley
I judge my time spent at Admin Branch (Rasheeda abad) as being the most
productive and exhilarating experience of my corporate life. Few of the main
highlights of my work experience while at different departments are:
Good Leadership
Congenial Work Atmosphere
Challenging Tasks Assignment
Employee Empowerment
Proactive Problem Resolution
Before the details description of the report I started with the summary of work
I done. The basic purpose of this summary is to given an idea about the contents
and efforts made behind the completion of the report to the reader.
It was assigned me to write an internship report of the MEPCO to view the
working environment, function, procedures and behavior of doing work.
Internship was started from 26/05/2014 and end on 18/07/2014, this period was
the real experience of my life and I saw the setup, working process and formal
documentation of the MEPCO.
The MEPCO is a very big organization with several departments in working in
the head office. The human resource department which deals with the internees
has assigned me MEPCO. MEPCO gives me the opportunity to view, how the
books of accounts are prepared, how to fill the different forms, how to behave
with customers and about the record keeping. I worked in Technical section of
MEPCO and
learned about distribution
system of MEPCO, technical
correspondence between departments and flow of data between departments. I


(WAPDA)
MBA Finance
2011-2014
also learned billing system of MEPCO and also how to apply for new connection
and what is procedure. Here staff gives me opportunity to do practical work. It
was a really nice and fruitful experience for my upcoming practical life.
I would like to conclude by saying that even though every person will
have a different story to tell, the common factor that binds us all is the good work
done by our predecessors in the IMS. I have given more than 100% of my efforts
to keep up that good work and I am sure that my colleagues have done the
same. I am hopeful that as we pass through the corridors of this great institution
into the real world, this legacy will be kept and upheld by the future generation of
Zakrians.

(WAPDA)
MBA Finance
2011-2014
Purpose of the study

Purpose of the study was two pronged.
General Purpose
To get acquaintance to the MEPCO operations.
To know what sort of changes management brings in managerial

activities.
To see the application of our Professional studies especially.
Specific Purpose
Specific purpose of the study includes.
A partial fulfillment as a requirement for the completion of MBA Degree.
To objectively observe the operations of MEPCO in general and the

operations of MEPCO in specific.
To make recommendations or implementation plans for the improvement

of the operations of MEPCO in the light of our professional studies.

(WAPDA)
MBA Finance
2011-2014

(WAPDA)
MBA Finance
2011-2014
About MEPCO
Multan Electric Power Company is one of the biggest Distribution
Company of WAPDA, its area of operation is from Sahiwal to Sadiqabad,
Bahawalnager to Bahawalpur and Tounsa Sharif to Rajanpur and bordering with
Sind, Balochistan and KPK Map.
The Charter of MEPCO is to provide the reliability, quality and safety of
electric power supply to the consumers in its Jurisdiction.
MEPCO is envisaged for the creation of the resources and engineering plans for
additions, renovation and augmentation of the distribution system in order to
achieve charter.
MEPCO is putting efforts to make it a viable and progressive utility to take
care of consumer's power demand.
Following MEPCO Officers will sit at MEPCO Regional Complaint Centre,
Khanewal Road Multan between 1000 to 1200 hrs on the weekdays mentioned
against each to receive the complaints regarding electricity. They will issue
orders at the spot where possible for immediate disposal of complaints:
. Officers Day
a. Chief Engineer / Tech:Director
Monday
b. Chief Engineer / CS Director
Tuesday
c. Chief Engineer / Op. Director
Wednesday
d. Manager (Commercial)
Thursday
e. Manager (O&M) Distribution
Friday
In case of non availability of any of the officer, next junior to him will sit in
his place.
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(WAPDA)
MBA Finance
2011-2014
History of MEPCO
WAPDA
The electricity supply service in Pakistan, initially, was undertaken by
different agencies, both in public and private sectors, in different areas. In order
to provide for the unified and coordinated development of the water and power
resources, Water and Power Development Authority (WAPDA) was created in
1958 through WAPDA Act, 1958.
Area Electricity Board Multan

The local areas electricity distribution service was being performed by
various Regions of WAPDA. Then the Area Electricity Board (AEB) Multan, on
the eight AEBs in Pakistan, was established under the scheme of Area Electricity
Boards in 1982, in order to provide more autonomy and representation to
provincial government, elected representatives, industrialists, agriculturalists and
other interest groups in functions of the AEBs.
MEPCO
The environment and structure of the power industry throughout the world
are undergoing dramatic change. The power sector is moving from monopoly to
privatization and from integration to disintegration. To keep pace with this
change, the Government of Pakistan approved a Strategic Plan in 1994 as a
consequence of which the power wing of WAPDA has been unbundled into 12
Companies for generation, transmission and distribution of electricity.
Multan Area Electricity Board was reorganized into one such corporatized
entity under the name of Multan Electric Power Company (MEPCO) with effect
from 14.05.1998, with the aim of commercialization and eventually privatization.
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(WAPDA)
MBA Finance
2011-2014
Vision
To ensure convenient availability of high
quality power in area of responsibility, in order
to alleviate the poverty, improve quality of life
and make the Industrial and Agriculture Sector
competitive in the World Market.
Mission
Ensure convenient availability of high
quality electric power to the people at
affordable price, retaining financial viability
of the Company.
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(WAPDA)
MBA Finance
2011-2014
To play and active role to make Sar Sabz and Roshan Pakistan
To facilitate agriculture and industrial sector
To ensure un-interrupted and stable power supply to all customers
State-of-the-art customer care for satisfaction of customers
To provide electricity to every village in jurisdiction of company
To establish, construct and operate reliable electricity distribution network
MEPCOs Commitment
Improve customer satisfaction
Reduce Line Losses
Weed out corruption
Increase revenue generation
MEPCO web site is launched to provide
the best customer services
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(WAPDA)
MBA Finance
2011-2014
Management Philosophy
Open door policy for all
Tackle all problems upfront
Merit, justice, fair play be the hallmark
Transparency in all fields
Accountability of everyone
Corporate Strategy
In the long run the company desires to
become a profit earning concern by minimizing
the line losses and maximizing the recovery. The
company would like to ensure availability of
uninterrupted power supply to the people of the
thirteen districts under its jurisdiction. To ensure
that the company is well managed and deliver
efficient and quality service to the electricity consumer at the minimum cost
possible.
Culture
MEPCO has its own strong culture. The employees
own the company.
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MBA Finance

(WAPDA)
2011-2014
Core Values
The core value of the company is that no
other company is operating in this area for
this
purpose.
Business
The
business
Strategy
strategy
is
to
provide
electricity to the consumers at affordable

rates. The domestic consumers using less
energy are charge at very low rates. The
commercial, industrial and big domestic
consumers are charged very high rates. In order to develop agriculture
sector, subsidies provided and they are charged less rates as compared
to commercial and industrial consumers.
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MBA Finance

(WAPDA)
2011-2014
Technical Overview
Area of Operation
MEPCO's area of responsibility
covers
Civil
Khanewal,
Bahawalnager,
Districts
Sahiwal,
Lodhran,
of
Multan,
Pakpattan,
Bahawalpur,
R.Y. Khan, Vehari, Muzaffargarh, D.G. Khan, Layyah, and Rajanpur.

(Map)
Organizational Structure of Mepco

MEPCO comprises of the following eight (08) distributions Operation
Circles, one
(1) Construction and two (2) GSO Circle, as detailed below:
Operation Circles
Grid Stations
Distribution Transformers
Capacity of Distribution Transformers
109,381 Nos.
5639.770 (MVA
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(WAPDA)
MBA Finance
2011-2014
Jurisdiction Map of MEPC
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(WAPDA)
MBA Finance
2011-2014
Organization Structure
Manager
(Operation)
Dy.Manager
(OP)
Assistant
Manager (OP)
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(WAPDA)
MBA Finance
2011-2014
Top Management
Mr. Guftar Ahmed
Chief Executive Officer
O/o Chief Executive MEPCO HQ, Multan.
Mehar Khan
General Manager / (Op) Director
Formations under Jurisdiction
1. All Managers Operation.
2. Power Control Center
Mr. Pervaiz Akthar Shah Khaga

General Manager / (Tech) Director
1. Project Construction
2. O & M (Distb)
3. Safety
Mr. Shafqat Asghar Tahir

Chief Engineer / (Distb:) Director
1. Manager (MM) Distb:
Muhammad Shakeel
Chief Engineer / (Development)
1. Procurement
2. Project Finance
3. Planning Scheduling & Coordination
4. DM Environment & Safeguard.
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(WAPDA)
MBA Finance
2011-2014
Mr. Anjum Naveed Arrain

Chief Engr: / (CS) Director
1. Commercial Directorate
2. Mark, Tariff, Contract Management
3. Surveillance & Investigation
Mr. Hamayon Khan Sadozai

Chief Engr: / (P&D)

1. O & M Directorate
Mr. Faiz Muhammad Khouso

Chief Engineer / (Op.) T&G
1. (O&M) T&G
2. GSO Circles (Multan & Sahiwal)
Mian Iftikhar Ahmed

HR & Admn Director
Formations under jurisdiction
1. Admn Directorate
2. HR Directorate
3. Labour & Law
4. Security
5. Transport
Syed Mushtaq Hussain Bukhari

Finance Director
O/o Chief Executive, MEPCO HQ, Multan.
1. MCA
2. CPC
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(WAPDA)
MBA Finance
2011-2014
Board of Directors
Ch. Guftar Ahmed (Director)
Chief Executive Officer
MEPCO
Mr. Jalal-Ud-Din Malik

(Director)
General Manager (NTDC),
WAPDA House, Lahore.
Mr. Muhammad Azhar Iqbal

(Director)
General Manager (HR & Admn) PEPCO,
Mr. Mumtaz Khan Manais (Direct)

Modern Agriculturist & Dairy Farmer
Gold Medal from UNO
& Pride of Performance from President of Pakistan
Mr. Tariq Mahmood Qurahsi (Director)

Engineering Advisor (Power)
O/o the Chief Engr: Advisor Plot No. 06 near old MNA
Building, G-5/I, Islamabad.
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(WAPDA)
MBA Finance
2011-2014
Inputs and Outputs of MEPCO

MEPCO Multan Electric Power Company is an electricity distributing
company that distributes electricity. Multan Electric Power Company buys
electricity from either
WAPDA the Pakistan Water and Power Development Authority and
NEPRA or produce their own electricity by using thermal power station and
distributes it to the consumers through grids and power stations.
Inputs
The inputs of MEPCO include the raw form of electricity coming from the
power stations and WAPDA and the purchased electricity from NEPRA. The
then distributes this electricity throughout the Multan division.
Outputs
The output of MEPCO is the processed form of electricity that is in the
state of distribution and is distributed through grid stations and transformer. They
distribute this electricity throughout Multan division to various sub divisions
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(WAPDA)
MBA Finance
2011-2014
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(WAPDA)
MBA Finance
2011
2011-2014
Introduction of WAPDA
WAPDA, the Pakistan Water
and Power Development Authority, was
created in 1958 as a Semi-Autonomous
Autonomous
Body for the purpose of coordinating
and giving a unified direction to the
development of schemes in Water and
Power Sectors, which were previously
being dealt with, by the respective
Electricity and Irrigation Department of the P
Provinces.
Since October 2007, WAPDA has been bifurcated into two distinct entities
i.e. WAPDA and Pakistan Electric Power Company (PEPCO). WAPDA is
responsible for water and hydropower development whereas PEPCO is vested
with the responsibility of thermal power generation, transmission, distribution and
billing. There is an independent Chairman and MD (PEPCO) www.pepco.gov.pk
replacing Chairman WAPDA and Member (Power) who were previously holding
the additional charges of these posts.
WAPDA is now fully rresponsible
esponsible for the development of Hydel Power and
Water Sector Projects.
PEPCO has been fully empowered and is responsible for the
management of all the affairs of corporatized nine Distribution Companies
(DISCOs), four Generation Companies (GENCOs) and a National Transmission
Dispatch Company (NTDC). These companies are working under independent
Board of Directors (Chairman and some Directors are from Private Sectors). The
Companies are administratively autonomous and leading to financial autonomy
by restructuring
ructuring their balance sheets by bringing their equity position to at least
20 percent, required to meet the prudential regulations and to facilitate financing
from commercial sector (approved by ECC). The Loan Liability Transfer
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2011-2014
Agreements (LLTA) has been signed with Corporate Entities and execution of
loan transfer is complete.
History of the Power Sector

Pakistan had power generation capacity of 119 MW at the time of partition
from India in 1947. This number has increased more than seven-fold to 19,420
MW. The power sector is Pakistan is a mix of thermal, hydel and nuclear power
plants. The break-up amongst the three types of power sources is approximately
66 percent thermal, 30 percent hydel, 3 percent nuclear and 1 percent was other
sources. The electric distribution network serves about 14 million customers;
with domestic consumption at 20.4 percent, transportation consumption 29.3
percent, commercial consumption at 3.7 percent, industrial consumption at 42.6
percent, agricultural consumption at 2 percent and the rest lost as traction
between Water and Power Development Authority (WAPDA) and Karachi
Electric Supply Corporation (KESC).
The electricity markets in Pakistan has undergone massive changes, with
hydel-electricity as a percentage of total power generated dropping from close to
60 percent to less than 30 percent as of 2009. Consequently, thermal power,
which includes gas, furnace oil and coal powered plants increasing to over 65
percent of all the power generated in Pakistan. This increasing dependence on
thermal power plants especially furnace oil, has put an increasing strain on
Pakistan and its ability to pay for this power source. According to the Oil and Gas
Journal remaining recoverable oil deposits in Pakistan are approximately 310
million barrels as of January 2008. Total output has fluctuated within a range of
about
60,000
65,000
barrels
per
day
since
1989.
In
2008
according to the Energy Yearbook 2008, Pakistan produced an average of

69,000 bbl/d of crude oil (representing roughly 20 percent of the demand) with
targets of producing 100,000 bbl/d by 2010. Since the mid-nineties the number
Independent Power Producers (IPPs) has increased, providing approximately an
ever increasing percentage (currently at 30 percent) of all the power generated
in Pakistan to WAPDA. To meet the need of these IPPs the furnace oil imports of
Pakistan have surged as of late touching the US$ 6 billion mark for 2008. Total
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2011-2014
crude oil and petroleum product imports for 2008 were approximately US$ 11.5
billion, representing close to a quarter of all the imports for the country.
Pakistan's Power Sector

Companies and Players
Pakistan has two vertically integrated power utilities the Water and Power
Development Authority (WAPDA) and the Karachi Electric Supply Corporation
(KESC). WAPDA supplies power to all of Pakistan except the metropolitan city of
Karachi, which is the responsibility of KESC. The system of WAPDA and KESC
are interconnected with a 220kV double circuit transmission line. Pakistan has an
installed generating capacity of
19,420 MW according to Pakistan Energy
Yearbook 2008 and the proportion of power generation is as follows:
Water and Power Development Authority (WAPDA) 11,344 MW
Karachi Electric Supply Corporation (KESC) 1,756 MW
Pakistan Atomic Energy Commission 462 MW
Independent Power Producers 5,858 MW

WAPDA was established in 1958 and entrusted with a massive agenda,
which included generation, transmission and distribution of power along with

irrigation, drainage and flood control. It owns about 58 percent of all the power
generated in the country and serves 88 percent of all the electricity customers in the
country. The privatization of WAPDA is underway, with its distribution network
getting divided into eight electric supply companies. There will be eight distribution
companies (DISCOs), along with three generation companies (GENCOs) and a
national transmissions and distribution company (NTDC).
KESC was incorporated in 1913 and is responsible for generation,
transmissions and distribution to Karachi and all its adjoining localities. KESC has
approximately 1.5 million customers most of them are located in urban areas.
KESC is wholly dependent on thermally generated power to provide the needs of
its customers. As of June 2009, KESC is facing around 450 MW shortfall in its
ability to generate power that is demanded by Karachi
and is dependent on
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2011-2014
WAPDA to fill in the deficit. In order to maintain transparency, fair competition and
protection of customers the Government of Pakistan enacted the Generation,
Transmission and Distribution of Electric Power regulation act, 1997. Under this act
the
National Electric Power Regulatory Authority (NEPRA) had been created
to regulate the Pakistans power sector.
NEPRA's primary responsibilities
include the issue of licenses for power production, transmission and distribution
(including the stipulation of licensing fees), specification of electricity tariffs. With
respect to tariffing, NEPRA is also responsible for approving the tariffs negotiated in
connection with bilateral agreements between individual power producers and the
National Transmission and Distribution Company (NTDC). Considerable progress has
been made by NEPRA toward the development of the regulatory management and
future market design for the power sector. All generation, transmission, and distribution
companies are now licensees of NEPRA, and abide by the rules and regulations
created by NEPRA regulators to support reliable and efficient power sector
production.
The Private Power and Infrastructure Board (PPIB), the state agency
responsible for regulating Pakistans power sector, acts as a one-stop shop for
investors interested in entering the market, and helps companies negotiate power
purchasing agreements and obtain licenses. PPIB came into existence after the
2002 power policy came to fruition, acting in the name of the Pakistani Government
to provide advice and guidance for the implementation of power plant projects.
PPIB's efforts are focused on the privatization of public sector companies, as well
as on attracting new investment from the private sector by providing incentives under
new and improved policies. PPIB also provides guarantees to private investors for
the performance of government entities (such as WAPDA, KESC etc., of which
KESC has been privatized). Currently, the transmission, distribution and retail
supply of electricity in Pakistan is largely undertaken by WAPDA, whose various
branches have been recently separated into distinct companies in an attempt to
create a more competitive, market- oriented environment. PPIB monitors
litigation and international arbitration for and on behalf of Government of
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2011-2014
Pakistan, and, finally, assist the regulatory tariffs for new private power projects.
The Alternative Energy Development Board (AEDB) was founded in May 2003
for supplying wind, solar and mini/small Hyde power generated electricity in
remote regions of Pakistan. AEDB is also responsible for developing the country's
medium and long-term promotion policy for renewable energy sources. In addition,
its functions include the coronation of joint ventures with the aim of transferring
foreign technologies to upgrade the existing alternative energy technologies in
Pakistan. The AEDB has a mandate of 10 percent of the total installed
Power Policy 2002

A new power policy was enacted in 2002, it closely resembled its
predecessor dating from 1994, but it has broader range of applications. Entitled
Policy for Power Generation Projects Year 2002, the new power law applies both
to private investment projects and to public-private partnerships and public-sector
power plant projects. The law also makes it possible for investors not only to
participate in public tendering, but also to propose power plant projects on their own.
With the new law, respective provincial governments are responsible for approving
plants with ratings below 50 MW. A two-component system of remuneration has be
defined for power providers: part of the remuneration depends on the output of the
respective plant (capacity purchase price, CPP), and the rest if a function of the
source used for the energy generation (energy purchase price, EPP). The later is
supposed to account for 34 to 40 percent of the total remuneration. The new
provisions for 2002 give preference to projects involving the use of domestic energy
resources, i.e. mainly water, coal and natural gas. Moreover, import duties on plant
components have been reduced to a mere 5 percent of the standard rate.
Incentives Provided in Policy

Complete security and guarantee against political risk, foreign exchange risk,
taxation risk and contract risk
Pakistan needs 5,529 MW of electricity by 2009 2010
Special incentives to use indigenous and locally available energy sources such
as hydel, coal and gas instead of oil fired power stations. Secured return on
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2011-2014
investment on coal/gas based power projects, by adjusting the tariffs to provide

the incentive
Under the pre-qualification criteria, main sponsors to have 20 percent equity

stake. Additionally, the main sponsors must have direct and relevant
experience in development, implementation, ownership and operation of the
facilities
Current Situation
As of June 2009 Pakistan is facing 6 10 hours off rotating black-outs
(load shedding) because of the ever increasing gap between demand and supply.
With an installed capacity of 19,420 MW and effective generation around the 14,000
15,000 MW and demand in the 16,000 17,000 MW there is a shortage of 2,000
3,000 MW. The situation is exacerbated by the unavailability of gas and/or oil for
generating the electricity, unpaid due by various parties, issue of revolving debt
among the related parties and transmission issues. Official estimates are that 5 12
per cent of economic production in Pakistan is lost every year due to load
shedding.
Based on the World Bank draft report on Pakistan's Investment Climate,
Pakistani power sector sells electricity to consumers at a rate that is 60 percent
higher than in India and 40 percent higher than in Bangladesh. The report claims
that apart from technical issues, corruption has impeded access to power supply to
business firms. 84 percent of business firms have allegedly had to make informal
payments for obtaining electricity services. This shows an increase from 25 percent
of the firms that had reported making such payments in 2002. In cities like Lahore,
Quetta and Hyderabad, almost every business that applied for a power connection is
reportedly asked to make an informal payment. Power outages are universal, with
95 percent of the businesses reporting power outages at some time during the day.
The total annual incidence of power outages in Pakistan, according to the report,
comes to 945 hours. Outages leading to forced overtime, waste of material,
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damaged equipment and an added maintenance averaged at 10 percent of annual

sales.
This figure has increased from about six percent in 2002. The report has
recommended that if uniform tariff is applied nationwide, timely payments must be
made to cover the difference between determined and notified tariffs; there must be
a substantial reduction in transmission, distribution and collection losses, which
currently account for over a quarter of the net generated power in Pakistan.
Fault lines identified are:

Electricity price: The price of electricity is on the higher side relative to other
South Asian countries. Even with the subsidies, system losses and supply quality
problems, electricity tariffs in Pakistan are 60 percent higher than in India and about
40 percent higher than in Bangladesh
Losses: Technical and collection losses impose a severe strain on the
financial sustainability of Pakistans power sector. The countrys electricity system
loses more power than all comparators, apart from India, which lost a quarter of its
generated electricity in 2006/07. According to Pakistan Energy Yearbook 2008,
transmission and distribution losses in the public grid were estimated at 20.3 percent
in 2007-08 against 23.2 percent for 2002-03.
Access to power: Access to power supply is a serious challenge for firms
although the pattern differs across location, type and size. Delays in getting
electricity connections has become worse for firms and this barrier to entry and
constraint on expansion. The waiting period for a new connection went up to from
around 37 to 41 days from 1999-2002. The average waiting period in 2006
deteriorated to 92 days, placing Pakistan among the worst performers in the world,
second only to Egypt amongst its comparators.
Corruption in the electricity sector: In addition to technical issues, other
factors impede low-cost access to power supply. A stunning 84 percent of the firms
that applied for connection had to make informal payments in order to obtain
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electricity services a startling increase from the 25 percent firms that reported
making such payments in 2002.
Supply interruptions: Firms facing unreliable power supply with frequent
outages are disproportionately affected in different regions of Pakistan. The firms
face significant interruptions in power supply, disproportionate to the available
generation capacity. Outages are not just pervasive but almost universal, with 95
percent of firms reporting power outages. In case of Pakistan, the total annual
incidence of power outages comes to 945 hours, comparable to Bangladesh (1105
hours), which is the worst case among the comparator counties in both
frequencies and number of outages
Power interruption losses: Power interruptions cause severe financial
losses for all Pakistani firms, and affect small firms and the textile sector the most.
Outages, leading to forced downtime, waste of materials, damaged equipment, and
added maintenance average 10 percent of annual sales averaged over the entire
manufacturing sector. This figure has almost doubled from the reported six per
cent in 2002 and is, again, second only to
Bangladesh among comparator countries
The World Bank report recommends that the power sector needs to achieve
financial sustainability to enable better maintenance and future expansion. The report
recommends: If uniform tariff is applied nation-wide timely payments must be made to
cover the difference between the determined and notified tariffs; and there has to be a
substantial reduction in technical (transmission and distribution) and commercial
(collection) losses which
currently stand at a quarter of net generation due to
overloaded, under-invested, and under-maintained networks.

Thermal efficiency in Pakistan in power generation is around 32 to 35
percent, against the global average of 54 percent. Pakistan can close this gap and
increase power generation from thermal plants by a colossal 60 percent just by
adopting new technology and production techniques. Further, distribution losses are
around a quarter of the generated power. By reducing this to a more manageable 10
percent, power available can be increased by a further 2,500 MW. Adding the
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benefits of just these two suggestions increases the effective power available by
4,000 5,000 MW, which would cut the deficit and in fact give the country breathing
room till 2010 when other power generation projects come online.
Demand and supply of electricity:

According to the Ministry of Water and Power, the deficit of power for the
years 2011-12 and 2013 is 4,025 MW and 5,529 MW respectively.
Load pattern and peak load hours:

The electrical load pattern in the country varies from season to season;
during summer season there is an increase in the inductive load while in the
winter season increase in resistive load has been observed. The peak hours of
the country also vary from season to season depending the time of sunset. As
an average, peak hours are generally taken as between 06:00 PM to 10:00 PM.
A short span of peak, about one hour, also occurs in the morning but this being
about 20 percent less in magnitude than evening peak and is not very important
for generation planning but it is significant for system operation and planning.
Having consumption of 45.9 percent of electricity, domestic sector is the
major consumer of electricity in Pakistan, followed by industrial sector 28.2
percent, agricultural 11.5% and commercial sector 7.6 percent.
Electricity consumption by sectors 2007-08 (Percentage of Total 73,400
GWh)
The sector-wise and province-wise consumption of electricity is given in the following charts:
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Electricity consumption by sector (GWh)
Sectoral electricity consumption by Province 2007-08 (GWh)
Inefficiencies and Losses

The Pakistani power sector based on independent researchers and
multilateral organizations such as World Bank and Asian Development Bank is
plagued with production inefficiencies at every level. On-line transmissions
losses are estimated at 20 per cent which skews the government's official production
figures. With 20 per cent losses in transmission due to dilapidated distribution
system, low conductivity of transmissions lines and theft of power the effective power
generated is as follows: Installed capacity 19,420 MW Productivity losses (10%) =
Available capacity of approximately 17,478 MW - Transmission losses (20%) =
Effective Generation Capacity of approximately 14,000 MW. If we compare this
effective generation capacity against effective demand of (16,500 MW), Pakistan is
facing a shortage of 2,500 MW or 12 percent of installed production.
One prominent example of transmissions losses are the transmission
wires in Karachi area. These lines are made of steel instead of the more
conductive copper. The reason for using steel for the lines is due to the close
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proximity of the steel mill and therefore cheaper purchasing price of steel
compared
to
copper.
Incidentally,
these
steel wires in addition to contributing to power losses are also subject to theft as
this scrap steel is sold to dealers and traders.
Finally, government neglect of power infrastructure has left many cities in
Pakistan still using antiquated energy infrastructure. This state of affairs is
complicating privatization efforts as investors are faced with a foundation that
has crumbled from years of neglect. Ironically, this has in turn required the state
to spend large amounts of money to update the infrastructure to make it
attractive for investors before the privatization can take place.
Sources of Renewable Energy

Hyde power
Pakistan's total Hyde power potential has been estimated between 40,000 MW
to 50,000 MW of which roughly half (20,000 25,000 MW) can be harnessed
relatively easily, and approximately 6,400 MW of which is actually being exploited.
More than 1,000 MW micro/mini Hyde power potential is available in the northern
mountainous region of the country, of which less than 1 percent is developed. Due to
anticipated growth in demand and of the fact that only about 20 percent of the
available Hyde power potential is being utilized, the Vision 2025 development plan
provides for vigorous, multi-stage development of Hyde electric power.
Wind Energy
Even as recently as 2003, Pakistan had not installed a single wind energy
conversion system with a generating capacity above 500 W. There were only a
small number of micro-plants (300 500 W) for generating electricity, and
roughly 30 wind power installations are in use for pumping water in the coastal
regions of Baluchistan and Sindh provinces. Most notably along its 900 km
coastline and in a number of North-West Frontier valleys, Pakistan possess
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about 50,000 MW of economically exploitable wind-power potential. In July 2006,

Turkish based Zorlu Energji Grubu signed a letter on intent to install a 50 MW
wind farm in Pakistan. Zorlue would operate the wind farm for 20 years; it was
inaugurated in July, 2009. Zorlu has indicated that it would like to install an
additional 2,000 MW of renewable energy capacity in Pakistan by 2015.
Nine companies in addition to Zorlu have been given licenses by the
Alternative Energy Development Board of Pakistan to generate electricity from wind
power. All the companies will generate 50 MW of electricity for the next 20 years.
The companies are: New Park Energy Ltd.,Tenaga Generasi Ltd.,Green Power
Ltd.,Wind Power Ltd.,Zyhper Power Ltd., Win Power Ltd.,Milergo Pakistan Ltd.
And Beacon Energy Ltd.
Solar Energy
Pakistan has very good overall solar-energy potential as the average
insulation rate amounts to approximately 5.3 kWh/m2. The south-western province
of Baluchistan offers excellent conditions for harnessing solar energy. There, the
sun shines between 8 and 8.5 hours daily, or approximately 3,000 hours per
annum. Despite these favourable conditions, the use of solar energy for
generating energy or for heating homes is negligible. Photovoltaic systems are
used primarily for producing electricity in rural area. As far back as the early
1980's the Government of Pakistan had 18 PV systems with a composite output of
440 kW installed in various parts of the country. Due to lack of technical knowledge
and maintenance capabilities no further systems were added and seven of the
installed PV systems have stopped working. However, with the establishment of
AEDB, this time round will ensure sustainability of such projects by providing a
workable model on commercial lines.
Nuclear Energy
Pakistan has two nuclear power plants, Chashma-1 and Kanupp, with 300
MW and 125 MW respectively, of installed capacity. The Pakistan Atomic Energy
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Commission operates both nuclear plants. Pakistan's first nuclear reactor was setup with the help of Canadians in 1971 at Kanupp near Karachi; with an installed
generating capacity of 125 MW. Kanupp-2 and Kanupp-3 are under-construction
and are being built by the Pakistan Atomic Energy Commission (PAEC). Both
these power stations are park of Pakistan's civilian nuclear program and will have
an installed capacity of 1,000 MW for each. Kanupp-2 and Kanupp-2 nuclear
plants will be based on the model of CANDU nuclear reactor and will be under
IAEA safeguards.
Pakistan is currently working on a third nuclear power plant (Chashma-2),
with the help of China National Nuclear Corporation. The main part of the plant was
designed by Shanghai Nuclear Engineering Research and Design Institute
(SNERDI), based on the Qinshan Nuclear Power Plant (pressurized water reactor).
The plant will have 325 MW of installed capacity, with an estimated budget of Rs 52
billion and could be completed by 2011.
The third nuclear reactor is Pakistan Nuclear Power Fuel Complex, a 1,000
MW pressurized water reactor under construction by PAEC. The main part of the
plant is designed on the model of Chasma Nuclear Power Plant and Candu reactor.
The power plant is expected to be operational by 2010.
Independent Power Producers (IPPs)

The Independent Power Producers (IPPs) is an entity, which is not a public
utility, but which owns facilities to generate electric power for sale to utilities and end
users.
Pakistan has allowed IPPs to operate in its energy sector since 1994 when the
Private Power Generation Policy was established to counteract the increasing
inefficiency in state electricity generation, causing frequent and lengthy outages
during the early 1990s. Today 17 of the largest IPPs in the country represent more
than 30 percent of the installed electricity generation capacity and the government is
working to raise both this percentage and the number of private companies
operating in the sector in order to meet a growing demand and part of the Vision
2025 strategy. With the current energy deficit emerging in late 2006 and projected to
expand to 5,500 MW in 2010 the Government of Pakistan and the related players in
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the energy sector are in the process of increasing the power generated from existing
and new power producers. As mentioned a new power sector policy of 2002 further
increased incentives for new players to build and operate power generation facilities
The 17 largest IPPs in Pakistan all operate thermal generating plants
only. In addition to the 17 major IPPs, numerous small IPPs with total installed
capacity of 100MW or less have been active in the Pakistani Power Sector since
1994. According to the Pakistan's Energy Yearbook, IPPs had an installed
capacity of 5,822 MW, representing over 30 percent of the generating capacity of
the country. In two international shows this year, PPIB unveiled three new largescale
projects
for
investors
that
included
400MW to 500MW gas project called Uch II, a 400MW dual-fired project to supply
the textile industry in Faisalabad, and another dual-fuel project near the load center
in the industrial city of Lahore. Additional opportunities were presented in the form of
smaller hydelpower projects. The shows elicited an immediate response from
investors, including a proposal from AES to develop a US$ 1 billion coal project in
Thar, and the announcement of increased investment to the tune of US$ 1 billion
from CDC Groups Globeleq, which already owns 50% of the Lahore-based
Orient Power.
Crisis of Electrical Energy in Pakistan and

Future guidelines for Policy makers
INTRODUCTION
Throughout the world electricity is the most widely used and desirable
form of energy. It is a basic requirement for economic development and for an
adequate standard of living. As a countrys population grows and its economy
expands its demand for electrical energy multiplies. If this demand is not met
adequately a shortage in supply occurs. This shortage can assume crisis
proportions.
Pakistan has been facing an unprecedented energy crisis since the last several
years.
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The problem becomes severe during the summers. Large numbers of

users have to be disconnected from the energy supply system to prevent
overloading the generating stations (load shedding). On occasions the urban
dwellers had to suffer load shedding of 8-10 hours everyday. During the same
time rural consumers suffered it for up to 20 hours at a stretch.
Almost two years ago the Chairman Water and Power Authority (WAPDA)
admitted that his organization could not meet the current demand for electricity.
It is surprising such a senior person took so long to discover this problem. The
government talked about Pakistans supposedly booming economy but failed to
understand the need for meeting the energy needs of the boom. General
Musharraf (R) (ex-President) after becoming Chief Executive used to talk about
building dams especially Kalabagh Dam. Very few power plants have since been
set up. The present energy crisis is totally due to lack of forecasting and
planning.
A general block diagram of power system is presented in Figure 1.
Any power system has 3 major parts:
1. Generation system
2. Transmission system
3. Distribution system
Generally speaking the major technical causes of the shortfall in the
availability of electrical energy in Pakistan are:
Insufficient installed generating capacity.
Transmission system unable to transmit the greater load now imposed upon it.
Grid Stations and related equipment unable to carry the load imposed.
Distribution System was built to carry a smaller power and hence unable to
cater to existing demands [Gelling at el 1988].
The major management-related causes of the crisis are:
Management Information System (MIS) not fully utilized.
Failure to forecast and plan for the future.
Failure to set up new generating stations in time.
No new Transmission/Distribution networks & grid stations setup.
Unexpectedly rapid growth of load.
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Short term solution

1. Line losses control
The methodology that will provide immediate relief is the conservation and
judicious use of whatever little energy is being produced in the country. The
current losses in the system are 24% of the total power generated. These
include losses incurred during transmission and distribution as well as due to
theft. Wasteful consumption such as businesses remaining open till late at night
and unnecessarily brightly lit also contribute to losses. By reducing these to 10 %
we can save up to 300 MW of energy. The government should enforce shutting
down businesses and forbidding excessive and unnecessary lighting during late
hours. Zoning should be enforced in cities. Market zones can have their power
switched off (load shedding) at scheduled hours. As a benefit of service
WAPDA employees are allowed free use of electrical energy for their
domestic use. This facility has been grossly misused [Federal Bureau of
Statistics 2002]. It is recommended every WAPDA household be given a raise in
salary and the free electricity facility being withdrawn.
2. Improving Power generating capacity

It is an unfortunate fact that WAPDA and IPPs thermal power plants are
running at an average plant factor of about 50 percent. This means they are
producing only 50% of their installed capacity. They are not being used to deliver
their full power. Internationally it is quite usual to have thermal power plants
operating at 75 to 80 percent plant factor.
Operating the power stations at higher plant factors demands better
maintenance procedures there. It is felt that operating the plants at a higher plant
factor will cause them to deliver 20 to 30 %more energy to the system. This will
alleviate the present shortage to a significant extent. Improving the power plant
factor of the existing plant is far more economical then setting up new power
plants.
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Medium Term solutions

The policy makers of Pakistan talk about making dams and setting up
nuclear power plants but do not understand the importance and benefits of
alternate energy (renewable source of energy) sources such as solar, windmill
energy, etc. These are cheap and quick methods for producing electricity.
Pakistan is very blessed because abundant solar energy is available. Similarly
wind energy is readily available in the coastal areas and throughout the winter
months in Baluchistan. These energy sources if tapped can be of great help in
reducing the current demand supply gap.
1. Wind Energy
America, Canada and China have invested large sums of money into
research and development in order to obtain maximum energy from wind. Wind
power is now the fastest-growing energy source worldwide [US Department of
Energy 2002]. Total worldwide production of electrical energy from wind is
around 30000MW. Germany, with over 12,000 megawatts of wind power at the
end of 2002, leads the world in generating capacity. Spain and the United
States, at 4,800 and 4,700 megawatts, are second and third. Many predict that,
with the development of more efficient wind turbines, wind energy will provide an
increasingly large proportion of electrical production in the U.S. Tiny Denmark is
fourth with 2,900 megawatts, and India is fifth with 1,700 megawatts. Although a
score of countries now generate electricity from wind, a second wave of major
players is coming onto the field, including the United Kingdom, France, Italy,
Brazil, and China. However, land clearing for vast "wind farms" may cause
concern to environmentalists.
2. Solar Energy
Pakistan has high potential of renewable energy sources. A very large
part of the rural population does not have the facility of electricity because they
are either too remote or it is found too expensive to connect their villages to the
national grid station. Pakistan being in the sunny belt is ideally located to take
advantage of solar energy. This energy sources is widely distributed and
abundantly available in the country. During last 15 years Pakistan has shown
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quite encouraging progress in the use of photovoltaic cells. Currently electrical

power derived from solar energy is being used is being used in some public
parks. These include Khalid bin Waleed Park in Peshawar and the Race Course
Park in Rawalpindi. The Public Health department has installed solar water
pump for drinking purposes in some parts of the country. Both public and private
sector are playing their role in up grading of photovoltaic system in the country. If
this technology is used in large scale commercial production of electricity the
problem of energy shortage can be substantially reduced.
Long term solution

1. Coal Potential in Pakistan
Pakistan has the 5th largest coal reserve in the World, amounting to
approximately 185.175 billion tones. That has largest reserve in the country that
is approximately 75.5 billion tones. Pakistan can generate more than 100,000
MW of electricity for next 30 years if it uses all coal available to it. At present
Pakistan generates only 0.79% of its total electricity from coal [WAPDA Annual
report 2007-08]. Coal contributes approximately 39% of the total global primary
energy demand. Share of coal in total electricity produced in different countries is
PAKISTAN 0.79%
USA 56%
UK 58%
China 81%
2. Hydro-electric power potential

Pakistan has a huge potential to produce electric power from hydroelectric power plants.
In table 5 presents a view of electric power generation with power plants whose
feasibility study has been completed or is under process. Construction of all
these plants gives almost 55,000 MW. This easily meets the electrical energy
requirement of Pakistan for next 20-25 years.
From the table 4, 5 we can see that hydro-electric power has a great potential.
Some details of these projects are given in table 4, 5.These plants can give low
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cost electricity. As they are run of river plants, they can be easily installed with
minimum cost and in short time
Conclusion
The policy makers of Pakistan do talk about making dams and setting up
nuclear power plants but do not understand the importance and benefits of
alternate energy (renewable source of energy) sources such as solar, windmill
Tidal, Wave, and Geothermal energy, etc. They are cheap and quick methods
for producing electricity. Pakistan is a very blessed country because solar energy
is available in most cities all year round. Similarly wind energy is readily available
in the coastal areas and in interior Baluchistan during winter. These energy
sources if tapped can be of great help in reducing the current demand supply
gap. The possibility of using coal and hydro-electric run of river plants must also
be considered seriously for the long term.
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Product Lines
Multan Electric Power Co. distributes the electric power/supply to
Domestic, Commercial, Industrial and Bulk consumers. The company also
provides the maintenance of Electrical Equipments.
Competitors:
Faisalabad Electric Supply Co.
(FESCO)
Gujranwala Electric Power Co.
(GEPCO)
Hyderabad Electric Supply Co.
(HESCO)
Islamabad Electric Supply Co.
(IESCO)
Peshawar Electric Supply Co.
(PESCO)
Quetta Electric Supply Co.
(QESCO)
Karachi Electric Supply Company Ltd.
KESC
Overview of the Competitors:

Faisalabad Electric Supply Co.
FESCO Distributes and supplies electricity to about 2.76 million
customers within its territory with a population over 26.5 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 Faisalabad, Sargodha, Mianwali, Khushab, Jhang,
Bhakker, T.T Singh and Chiniot.
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Gujranwala Electric Power Co.

Gujranwala Electric Power Company (GEPCO) has been setup over area
of jurisdiction and network of former Area Electricity Board, which was created in
early eighties. It encompassed the areas of existing Districts of Gujranwala,
Hafizabad, Sialkot, Narowal, Gujrat and Mandi Bahauddin. GEPCO was
incorporated on 25th April 1998 and obtained Certificate for commencement of
business on 5th June 1998. Management and Administration is entrusted to a
Board of Directors. We have about 2,356,305 connections; Average monthly
Collection for the year 2008-09 is approximately 3.2 billion rupees.
Hyderabad Electric Supply Co.

Area Electricity Board (AEB) Hyderabad was one of the eight AEB's
constituted through amendments in WAPDA Act during 1981. Later on
Government of Pakistan approved revamping of WAPDA power sector in April
1998, resultantly twelve corporate entities were formed, Eight Distribution
Companies (DISCOs), one National Transmission and Distribution Company
(NTDC) and three Generation Companies (GENCOs). Now one more GENCO
has been established. All these companies have been incorporated under
Companies Ordinance 1984.
Islamabad Electric Supply Co.

IESCO aspires to become a major, diversified, transitional, integrated
power supply company in Pakistan, with a strong environment conscience,
playing a national role in electricity supply and distribution. At IESCO, we believe
that time has come for us to set our sights beyond just being a provider of
conventional services. We expect to carry the spirit forward by training and
leading a crack team through the portal of Contact Center that will push the
frontiers of our interactive experience with our customers. Our Mission is to bring
the assurance of energy to our customers, with world-class quality and
commitment for satisfaction as we continue in our quest for excellence.
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Peshawar Electric Supply Co.

Peshawar Electric Supply Company (PESCO), located in Peshawar
provides service of power distribution to over 2.0 million consumers of all civil
districts of N.W.F.P, Pakistan. At PESCO networks, we own and maintain
N.W.F.Ps electricity distribution system via 132, 66, 33KV sub-transmission
lines, sub-stations and 11KV & 440V low tension lines with distribution
transformers that deliver electricity to your home or business.
Quetta Electric Supply Co.

QESCO is operating as a Power Distribution Company and will act as
Private Organization on switching over from Public to Private Sector. QESCO is
dealing with Power Supply System in the whole Balochistan less District
Lasbela. It is smallest in terms of consumers but largest as it covers 43 % area
of Pakistan. The peak demand at the moment is 1177 MW evaluating measures
and anticipated to be 1659 MW by the year 2015 with 8 % uniform annual
growth. QESCO system is under stress due to huge number of Agri: Consumers
contributing about 70-80 % of Power Demand. Low voltage profile prevails due
to long distances from Generating Sources, besides availability of Single 220 KV
sources from Guddu. The safe drawl of power is 721 MW. To have additional
source another 2x220 KV Dadu-Khuzdar & DG Khan-Loralai Transmission Lines
stands approved through out source funding at the cost of Rs 5.437 and 5.089
billion respectively. Hopefully, the work completion in totality is expected ending
2011

KESC is one of the city's largest employers: around 17,000 people
currently work for the company. It is also one of the oldest companies in Karachi
and was established in the city even before the creation of Pakistan in 1947.
Incorporated on September 13, 1913, under the Indian Companies Act of 1882,
the company was nationalized in 1952 but was re- privatized on November 29,
2005. KESC came under new management in September, 2008; a significant
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number of professional managers with experience in running utility and other

large companies have joined under this management and will be running it until
the company is turned into a best practice utility.
At present, KESC is the only vertically integrated power utility in Pakistan
and manages the generation, transmission and distribution of electricity. KESC
covers a vast area of 6,000 square kilometers and supplies electricity to all the
industrial, commercial, agricultural and residential areas that fall under its
network
KESC is one of the city's largest employers: around 17,000 people
currently work for the company. It is also one of the oldest companies in Karachi
and was established in the city even before the creation of Pakistan in 1947.
Incorporated on September 13, 1913, under the Indian Companies Act of 1882,
the company was nationalized in 1952 but was re- privatized on November 29,
2005. KESC came under new management in September, 2008; a significant
number of professional managers with experience in running utility and other
large companies have joined under this management and will be running it until
the company is turned into a best practice utility.
At present, KESC is the only vertically integrated power utility in Pakistan
and manages people to the right jobs" and enhancing their levels of motivation /
morale / job satisfaction through different departments.
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DEPARTMENTS
Operation
- Operation
Directorate
HR
-HR duties and

Functions
Finance
-Banking
-Compilation
- O&M (T&Gs)
- O&M (Dist)
-Employees
Benefits/
Funds/Pensions
plans
-A/c R/c & A/c

P/A
-TSD
-Audit cell
-PDC
-Budget cell
-Safety Dept
-Tax Cell
-TSO
-Pre-Audit
-MMD
-Assets/salary
slip
-TC
-Pension Cell
-CSD
-Establishment
-Admin
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DEPARTMENTS
Operation Directorate
The basic tasks performed by the operation directorate are:
Operation and maintenance of distribution system
Operation and maintenance of sub-transmission and grid systems
The Directorate consists of the following departments: -
O&M (T&Gs) Department

The Operation & Maintenance (Transmission and Grid Stations) - O&M
(T&Gs)
department headed by a Senior Manager is responsible for the electrical network
at
132KV and 66KV and has under its purview 67 132KV and 15 66KV Grid
Stations
and
1515 KMs of 132KV and 628 KMs of 66KV lines. The department carries out its
functions in the field through the Superintending Engineer (Grid System
Operation)
SE
(GSO) by issuing guidelines, schedules and authorization for the preventive and
emergency maintenance programs, and carries out frequent inspection to ensure
compliance by the field organization.
O&M (Dist) Department

The Operation & Maintenance (Distribution) - O&M (Dist) department
headed by a Senior Manager, is responsible for the electrical system at 11KV
and 400V. Policy guidelines, schedules and authorization for maintenance of
feeders are issued to the 6 operating circles in the field headed by then
Superintending Engineers and frequent inspections are carried out to ensure
compliance. The department also has a civil engineering division headed by an
Executive Engineer for the design, construction and maintenance of all the
buildings of MEPCO.
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Technical Services Department

The Technical Services Department carries out the testing, calibration and
repair of all the energy meters, and also the installation of the maximum demand
meters. It is headed by 02 Managers who have 03 distribution circles each as
their areas of responsibility.
PDC Department
The Power Distribution Control Department headed by an Executive
Engineer has been set up to monitor the entire electrical network of MEPCO
round the clock. Information about the supply breakdowns, major equipment
damages and occurrences of importance are received through telephone and fax
from the field and are transmitted to the highest level in MEPCO and WAPDA,
and then instructions are passed for situation management.
Safety Department
The Safety Department headed by a Deputy Manager ensures that the
system is operated in compliance with the statutory provisions regarding safety
for the employees and the public. Frequent inspections are carried out and
safety parades by the employees are held to ensure that working practices are
safe and the employees are adequately trained in safety measures. Every
accident occurring to an employee, member of public or animal is investigated
meticulously and lessons learnt and disseminated.
In order to update the assets information and to monitor the efficacy of its
operation, maintenance and safety policies and programs related to the entire
MEPCO electrical network, the following returns are prepared and issued.
Technical Services and Operations

M&T organization is one of the most important departments in MEPCO,
the company revenue depends on accurate functioning of its cash box i.e.,
energy meter, M&T deals with checking installation, testing and re-calibration of
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energy meters the importance of M&T cant be over emphasized. It also attends
any fault in metering equipment- involving panels, MDI meter, C.Ts, P.Ts or
cable and this ensures continuity of supply to consumer using electricity in bulk.
The low losses in B-2 & B-3 units of MEPCO speak volumes for efficiency of
M&T department. It has dedicated and devoted staff and ready for duty at call at
any time. This department also enables operation wing to reutilize defective T&P
meters and thus saving a large amount of revenue by repairing these meters.
Material Management Directorate

Pre qualification and Registration of firms for supply of distribution / GSO
Material
Procurement of material through tender
Disposal of unserviceable material / vehicles through tender and auction
Formation of rate contract for regular supply of material with firms.
Arrangement of all kinds of material including T&P items from other DISCOs as
per requirement of field formations.
Maintaining of minimum and maximum level of material in stores
Issuance of material as per requirements of field formation
(A) Private New Connection & Extension of Load
(B) Government Connection
(C) Housing Schemes
(D) Others Works
Training Centers
MEPCO also provides refresher courses to the employees for working in
computer based and modern systems. The newly induced employees are
enrolled for newly induction program and they are trained for MEPCO
environment and systems. Since the situation of Law and Order is very spoil in
our county therefore security staff of the MEPCO is also provided refresher
courses to familiar with advance security systems and arms. For this purpose a
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Training center is established in 220KV Grid Station Bund Road Lahore. All the
newly induced officials and officers are required to pass their newly induction
courses. The departmental promotion exams and training is also performed in
this center.
Customer Services Directorate
The tasks assigned to Customer Services Directorate in MEPCO are:

Implementation of Commercial Policies
Monitoring and management of recovery process
Monitoring of line losses and preparation of accurate line losses

statements
Settling consumer disputes involving technical, commercial and tariff

issues
Processing and monitoring policies and procedures for Customer

Services
Inspection of field formations regarding Commercial and Customer

Services matters
Sanction, contract management and monitoring of specialized electricity

consumptions such as Cable TV networks and neon signs etc.
Processing/sanctioning
of
various
incentives
for
customers
and
employees introduced from time to time.
Effective marketing of electricity
Tariff structuring and management of other tariff related matters
Compilation of statistical data and management returns
Co-ordination with Manager MIS for regulating effective billing program
Surveillance and detection of electricity theft
Taking effective measures for prevention of electricity theft
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HRM DEPARTMENT
HR DEPARTMENT
Under direction from the Chairman and Chief Executive Officer of the
Company, HR &
Admn Director shall be responsible for the recruitment and placement of the
"right people to the right jobs" and enhancing their levels of motivation / morale /
job satisfaction through:
a) The provision of the necessary support systems and structures such as an

attractive compensation package, a fair and objective system for promotion and
career progression, training and development inputs to keep people in pace with
the changing demands of their jobs, etc.
b) The creation of a working environment and administrative support systems

that will promote employee performance and productivity.
More specifically the Human Resources Director shall perform following
functions:-
a) A human resource philosophy, which shall govern the companys

actions with respect to human resources management.
b) Prepare a Human Resource Plan to support the short and mediumterm goals of the company.
c) Develop the policies, guidelines and procedures for the following

human resources
management concerns: -
Manpower planning / budgeting
Recruitment and Selection
55

(WAPDA)
Appointment, deployment, re-deployment / transfers
Compensation and benefits administration
Career planning and promotion
Performance management
Incentives administration
Training and development
Grant of Move over
Grant of permission for higher education
Consider and approve transfer requests.
Sanction leave.
MBA Finance
2011-2014
Duties / Functions of Manager (HR)

1. Recruitment
Manpower Planning
Recruitment and Selection
Appointment and Development
Creation of Posts and Offices
2. Promotions
Preparation of Seniority Lists / Fixation of Seniority
Career Planning and Promotions
Performance Management
Training and Development
Grant of Selection Scales
Move Over
Preparation and Circulation of Seniority Lists
Maintenance of Service Books
Pension Welfare Fund and GLI Cases
Over Time / Off-Days Wages Cases
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(WAPDA)
MBA Finance
2011-2014
3. Transfer / Posting
Transfer and Posting of Staff and Officer
Vacancies Statement and Manpower Data
Incumbency Statement / Register
To Maintain List of Officer Stay Wise
4. Retirement
Retirement and Resignation of Service
Preparation of Pension Papers
Actively supervise and Coordinate the Working of All Administration Staff
Posted under
JOB ANALYSIS
Job Analysis is a process to identify and determine in detail the particular job
duties and requirements and the relative importance of these duties for a given
job. Job Analysis is a process where judgments are made about data collected
on
job.
The Job; not the person An important concept of Job Analysis is that the
analysis is conducted of the Job, not the person. While Job Analysis data may
be collected from incumbents through interviews or questionnaires, the product
of the analysis is a description or specifications of the job, not a description of
the person.
Purpose of Job Analysis

The purpose of Job Analysis is to establish and document the 'job
relatedness' of employment procedures such as training, selection,
compensation, and performance appraisal.
Determining Training Needs

Job Analysis can be used in training/"needs assessment" to identify or develop:
57
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(WAPDA)
2011-2014
training content
assessment tests to measure effectiveness of training
equipment to be used in delivering the training
Methods
of
training
(i.e.,
small
group,
computer-based,
video,
classroom...)
Compensation
Job Analysis can be used in compensation to identify or determine:
skill levels
compensable job factors
work environment (e.g., hazards; attention; physical effort)
responsibilities (e.g., fiscal; supervisory)
required level of education (indirectly related to salary level)
Selection Procedures
Job Analysis can be used in selection procedures to identify or develop:
job duties that should be included in advertisements of vacant positions;
appropriate salary level for the position to help determine what salary
should be offered to a candidate;
minimum requirements (education and/or experience) for screening

applicants;
interview questions;
selection tests/instruments (e.g., written tests; oral tests; job simulations);
applicant appraisal/evaluation forms;
orientation materials for applicants/new hires
Performance Review
Job Analysis can be used in performance review to identify or develop:
goals and objectives
performance standards
58

(WAPDA)
evaluation criteria
length of probationary periods
duties to be evaluated
MBA Finance
2011-2014
Methods of Job Analysis

Several methods exist that may be used individually or in combination. These
include:
review of job classification systems
incumbent interviews
supervisor interviews
expert panels
structured questionnaires
task inventories
check lists
open-ended questionnaires
observation
incumbent work logs

A typical method of Job Analysis would be to give the incumbent a simple
questionnaire to identify job duties, responsibilities, equipment used, work

relationships, and work environment. The completed questionnaire would then
be used to assist the Job Analyst who would then conduct an interview of the
incumbent(s). A draft of the identified job duties, responsibilities, equipment,
relationships, and work environment would be reviewed with the supervisor for
accuracy. The Job Analyst would then prepare a job description and/or job
specifications.
The method that you may use in Job Analysis will depend on practical concerns
such as type of job, number of jobs, number of incumbents, and location of jobs.
What Aspects of a Job Are Analyzed?

Job Analysis should collect information on the following areas:
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(WAPDA)
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Duties and Tasks The basic unit of a job is the performance of specific
tasks and duties. Information to be collected about these items may
include:
frequency,
duration,
effort,
skill,
complexity,
equipment,
standards, etc.
Environment This may have a significant impact on the physical

requirements to be able to perform a job. The work environment may
include unpleasant conditions such as offensive odors and temperature
extremes. There may also be definite risks to the incumbent such as
noxious fumes, radioactive substances, hostile and aggressive people,
and dangerous explosives.
Tools and Equipment Some duties and tasks are performed using
specific equipment and tools. Equipment may include protective clothing.
These items need to be specified in a Job Analysis.
Relationships Supervision given and received. Relationships with

internal or external people.
Requirements The knowledge, skills, and abilities (KSA's) required to

perform the job. While an incumbent may have higher KSA's than those
required for the job, a Job Analysis typically only states the minimum
requirements to perform the job
Importance of Job Analysis

Job analysis helps in analyzing the resources and establishing the
strategies to accomplish the business goals and strategic objectives. Effectively
developed, employee job descriptions are communication tools that are
significant
in
an
organization's
success.
The main purpose of conducting job analysis is to prepare job description and
job
specification
which
helps
to
hire
right
quality
of
workforce.
Job Analysis can be used in training to identify or develop, training content, and
assessment tests to measure effectiveness of training, equipment to be used in
delivering
the
training
and
methods
of
training.
Job Analysis can be used in compensation to identify or determine: skill levels,

60
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(WAPDA)
2011-2014
compensable job factors, work environment, responsibilities and required level of

education.
Job Analysis can be used in selection procedures to identify or develop
job duties that should be included in advertisements of vacant positions,
appropriate salary level for the position to help determine what salary should be
offered to a candidate, minimum requirements for screening applicants, interview
questions, selection tests/instruments (e.g., written tests; oral tests; job
simulations), applicant appraisal forms and orientation materials for new hires
Job Analysis can be used in performance review to identify or develop goals and
objectives, performance standards, evaluation criteria, length of probationary
periods, and duties to be evaluated.
Conclusion and Recommendations

The Manager HR is a very important position in MEPCO. The position
holder has to perform all the HR functions including recruitment, training,
orientation,
posting
transfer,
promotions,
career
planning,
performance
appraisal, disciplinary actions and general services.

With all these responsibilities, the manager HR has also the charge of
manager administration and Sports committee. In absence of HR Director, the
manager HR has to take care of that position too. This whole thing may create a
mess.
61

(WAPDA)
MBA Finance
2011-2014
EMPLOYEES BENEFIT PROGRAMMES

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.
Pension
WAPDA employees are entitled to full pension on reaching the age of
superannuation subject to completing their minimum required service. In
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(WAPDA)
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2011-2014
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.
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.
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.
WAPDA Staff College, Islamabad.
WAPDA Engineering Academy, Faisalabad
Regional Training Centers (RTCs) one each in Distribution Companies.
Technical Services Group, Lahore with Training Centre at Terbela.Gatti

(Faisalabad) and Kot Lakhpat Lahore
63

(WAPDA)
MBA Finance
2011-2014
Hydel 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
64

(WAPDA)
MBA Finance
2011-2014
65

(WAPDA)
MBA Finance
2011-2014
Banking Section
There are two basic functions of banking sections which are:
Demand Notice
Billing Collection
Demand Notice:
In demand notice, there are two kind of deposits which are collected by banking
section of finance department. The first one is security. Which customers will
deposit at the time of application and it is refundable. The second type of deposit
is Capital deposit. In capital deposits, customers deposits according to their
requirements (for example Wire, meters, transformers etc) , which is not
refundable.
Billing Collection:
Customers paid their bills in different banks, and banking section is responsible
to collect data from revenue office and prepare bank reconciliation statement
and match balances . There are approximately 1700 branches of different banks
are working with MEPCO. Some of the banks are:
UBL (180 branches)
HBL (195 branches)
NBL (185 branches)
MCB (180 branches)
ABL (80 branches)
MOP (65 branches)
Consolidation Department/ A/R & A/P

Basic purpose of consolidation department is to prepare consolidated
statements. They received data from revenue office and make consolidated
statements of MEPCO. They basically make two type of statements which are:
Income statement
Balance Sheet
Another function of consolidation department is to control the account receivable

and account payable.
66

(WAPDA)
MBA Finance
2011-2014
Pre-Audit & Audit

Pre-audit and audit sections are responsible for all the work before audit. They
perform three type of functions which are:
Internal audit
Private audit
Government audit
Internal Audit:
Internal audit is the responsibility of Pre-audit section. They have 5 to 7 person
audit team and performed internal audit by getting information and data from
revenue and other departments.
Private Audit:
After the Internal audit, Pre-audit team hire the services of private audit company
and perform the private audit and helped them while getting different type of
information and data from different sections.
Government Audit:
It is the responsibility of Audit section of finance department. NEPRA has its
audit team which has its head office in LAHORE. They send their team in
MEPCO in every year for major audit. Audit team helped them to perform major
audit . This is how pre-audit and audit sections works. If there is any gape exist
they send "para" to particular department and ask them to answer.
Tax Section:
Tax section get the revenue figure from revenue department and calculate the
tax and report to WAPDA as well as PAKISTAN tax authority. This is how tax
section works for MEPCO.
Budget Section
Budget section of finance department make two types of budgets which are:
Capital Budget
Expenditure Budget
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(WAPDA)
MBA Finance
2011-2014
Capital Budget:
In capital budget , budget section make budget for long term assets like
machinery, towers , vehicles etc. They basically get budget requirements from
different departments and after identification send the requirements to NEPRA
and get the overall budget. Then budget department distribute budget to all
required departments and get all types of bills and time to time information about
budget spending.
Expenditure Budget:
Expenditure budget is required to fulfill the expenses within the year, like petty
cash, telephone requirements etc. All the procedure of expenditure budget is
same just like capital budget.
Salary/Pension Section
Salary and pension section is responsible for making the salaries of all the
employees of MEPCO. On monthly bases, they make salaries slips and
calculate the total figure and get salaries from banking department and transfer it
to individual salaries account which has contract with HBL bank. Second function
of salary department is to make pension for all the retire employees of MEPCO.
Admin Section
Admin section is responsible to control all the sections and maintain all type
records on monthly bases. They send the record to head office of WAPDA. This
is how MEPCO finance department works.
68

(WAPDA)
MBA Finance
2011-2014
69

(WAPDA)
MBA Finance
2011-2014
SWOT Analysis
Strengths
One Window service facility at each Sub-Division
Establishment of Computerized Customer Service Centers in each Circle
Central Chief Executive Customer Service Center
Positioning of Field offices near geographic center of their jurisdiction and
co-location of XEN & RO offices
Printing of 12 months billing detail on bill
Printing of SDO's and XENs telephone numbers on the bill
Well defined and uniform policy for detection bills.
Enhanced allocation for Development and Maintenance.
More branches of scheduled banks and post offices authorized to collect
bills
Establishment of Model Sub-Divisions
Restructuring of Stores to ensure prompt availability.
Establishment of Marketing Cell and Task Force at MEPCO HQ to
facilitate industrial/commercial consumers
The MEPCO top management is the combination of both experience and
young energetic professionals which are providing to be the real strength
of MEPCO.
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(WAPDA)
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2011-2014
MEPCO website provides every information about MEPCO to the

customers and investors.
MEPCO has equipped with the latest technology.
MEPCO has good relation with different departments.
The MEPCO employees are locally so, the turnover rate is low.
The MEPCO has efficient internal audit department, which keep check
and balance.
The MEPCO has experienced of strategic apex and managerial skilled
staff.
Full support from Federal Government.
Weakness
Large time required for processing any project/job
Communication system between employees is not sufficient
Customer services centers required well trained and loyal staff
Lake of loyalty, consistency and regulatory in the staff
People has less trust over company
Customers guideness is not sufficient
Customers complaint system is very old and execution on the complaint
is very fatigue.
Customers and employees relation is very poor.
The administrative cost of the company is very high due to which the
profitability of the company decreases.
There is still improvement of technology in the MEPCO like in computers.
The customer services are not up to mark they have to improve the
customer services to satisfy the customers.
The divisions are not well furnished they have the need to improve them.
Telecom and Media revolution.
Dependency on suppliers of power generation equipment.
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(WAPDA)
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2011-2014
Opportunities
Corporatization and commercialization goals as per plan.
Establishment of mobile customer services center at each circle.
Distribution system rehabilitation under System Augmentation Program
(SAP) for reduction in energy losses.
Timely execution of development works and LT/HT Proposals under SAP.
New Grid Stations and augmentation/extension of existing Grid Stations
and
Transmission Lines
Establishment of Computer Billing Centers.
Conversion of petrol vehicles to CNG.
Purchase of new vehicles for field formation.
The MEPCO is situated in the region where the customers are large in
quantity and other necessary related product is easily available in the
market.
There is no competitor in the local market, there is a big opportunity to get
more share.
Buyers of MEPCO services are easily available in the local market.
The extension plan of divisions by the MEPCO is very good to capture
the market.
The MEPCO has maintained better relationship in the market which helps
the MEPCO to increase the customers.
The strategies of MEPCO are very strong which help them to get
advantages over the competitors.
Research and development in power generation equipment.
Natural resources to increase water resources and cheaper power.
There are rapid changes in technology of power generation and to coup it
ministry will have to be planning for the future plans keeping in mind the
changes.
New power projects have the bargaining power for higher prices keeping
in view the high demand and supply gap in power sector.
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(WAPDA)
MBA Finance
2011-2014
Threats
Since MEPCO is a public organization, therefore political environments
are
Decreasing the efficiency of the company.
Some other competitors like GEPCO have their own power
Generation system; therefore MEPCO is dependent on those companies.
In future it is expected that the market value of the MEPCO will be
decreased.
Politics in the employees and labor unions are very awful for company.
Governments pitiable projects also spoiling the publicity of the MEPCO
The overall performance of the MEPCO also decreasing.
One major threat to the MEPCO is increasing number of customers day
by day.
Due to fluctuation occur in the supply is permanent threat to the MEPCO.
There is always a threat the government may impose some duties on the
MEPCO.
Another threat to the MEPCO is change in day by day technology.
Withdrawal of support from suppliers.
Curtailment of budget.
Obsolescence of strategic equipment.
There is not a long list of suppliers in power sector and the suppliers enjoy
monopoly to some extent and they can change higher and delay supplies
as there is long waiting list for equipment supplies.
73

(WAPDA)
MBA Finance
2011-2014
Porters Five Forces Analysis
The porters five forces comprises on the following factors

Suppliers power
Threats of Substitute
Buyers Power and
Barriers to entry.
But in the case of MEPCO the competitors are limited to provide their
services in the defined areas of the country. They cannot provide their services
beyond the limitations. So the MEPCO is responsible for providing the services
in there relevant areas therefore no other substitute or there is no any new
company, which can provide electric supply.
74

(WAPDA)
MBA Finance
2011-2014
75

(WAPDA)
MBA Finance
2011-2014
Political Factors
The political situation of Pakistan is not satisfactory. Due to the rapid
change in the Government every government sets its own new trade policies.
MEPCO is under PEPCO/WAPDA which is a public sector organization and is
controlled by the Ministry of Water and Electricity of Pakistan. Raja Pervez
Ashraf is Federal Minister of this ministry. As WAPDA is fully operated by the
Government. Due to this political interference in WAPDA has increased and the
political persons and policies directly affect the WAPDA which is not only harmful
for the WAPDA but causes inefficiency and mismanagement. Employees are
hired on political basis, due to this reason inefficient work force is hired which
causes corruption and mismanagement. Due to number of external political
factors power-generation is somewhat restricted. In mid-2000, Pakistan's
government stated that it would permit a natural gas pipeline linking Iran's
massive reserves to rival India across Pakistani territory. Pakistan would earn
transit fees for Iranian gas supplied to India and also would be able to purchase
some gas from the pipeline when and if its own demand was sufficient. While
Iran and Pakistan have shown great interest in the project, India has been
reluctant to move forward as long as political and military tensions with Pakistan
over Kashmir persist. The recent escalation of tensions between the two
countries has made any movement on the project even more unlikely, though a
feasibility study is still underway.
Govt. should apply sustainable policies for continues and sustained
growth of WAPDA.
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(WAPDA)
MBA Finance
2011-2014
Economic situation:
The economic condition of Pakistan can also affect the foreign investors
increasing inflation rate make the cost of production high and thus reduce the
profit margin.
Investment activity in the country has already been slowed down and
further raise in the power tariff would add to the problem. Overall economic
activity in the country would remain sluggish if the investment remains blocked.
With the industrial power rates already too high, Pakistan was unable to
compete other regional countries in the international export market. "Target of
$10 billion export target is hard to achieve with such high power rates".
Industries all over the world get power on comparatively lower rates, but it was
other way around in Pakistan "Under the TWO regime we have to support the
competitiveness, and in the presence of such exaggerated power rates our
industry is not in a position to compete with other Asian states".
Social situation:
Power tariff in Pakistan are related with the poverty, and raise in the tariff
would automatically push up the poverty. Poor lot in the country was already
cutting down the food intake, and another hike in the power tariff would worsen
this situation in a country where calorie-based poverty is on the rise.
Technological factor:
The energy demand in Pakistan is likely to increase steadily.
Consequently, the current level of dependence on fossil fuel for electricity
production will come under severe strain because of the high depletion rate of
the fuel. Currently over 70 percent of the total electricity generation in the country
is from fossil fuels, as shown in Table 1 below for the year 2000-2001. In the
year 2000-2001 alone, the total fossil fuel consumption in electricity generation
amounted to 11.94 million tons of oil equivalent (TOE).
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(WAPDA)
MBA Finance
2011-2014
The fossil fuel resources, however, are not expected to last for many
years. In fact at the current rate of use of oil and gas for electricity generation,
the existing oil reserves, if put to produce electricity only, can last for a little over
six years only, and the gas reserves for about 75 years. According to some
estimates, a large hydroelectric potentialto the tune of around 30 gigawatts
exists, which is likely to form the backbone of future electricity generation. But
there are issues environmental as well as politicalthat makes large-scale
dams controversial. The mini- and micro-hydel plants, besides being too far
removed from the national grid, add up to a small net generation, serving only
some local communities. Even with a greater focus on microhydel plants, the
benefit will remain confined mainly to the northern mountainous areas.
Among the various renewable energy options, wind and solar energy
stand out for a larger and possibly grid-scale potential. Wind energy potential is
currently being charted out by a state agency and in view of the sharp drop in
installation costs, may help attract private investment in power generation. The
potential is however likely to remain significant only in the coastal areas, mostly
far away from the national electricity grid, and perhaps only to the tune of a
couple of gigawatts.
Solar photovoltaic systems are prohibitively expensive in terms of
installation costs. Power from them is also available intermittentlyonly when
energy from the sun is available. On the other hand, PV systems are free of the
ever-rising costs of input fuel.They also incur much less operation and
maintenance costs and are supposed to have a longer lifetime than, for example,
a fossil fuel power plant. Thus using solar-PV power looks uneconomical in the
short term, but may be profitable in the long term. It is, therefore, interesting to
identify the factors that can make investment in solar PV power generation
acceptable.
There are several technological alternatives for electricity generation.
While the product - electricity supplied to the end consumer- is uniform, different
production techniques do make a difference on the basis of final cost, reliability
of supply and quantity of polluting emissions. There are different primary energy
sources such as thermal, nuclear or renewable energy which make use of
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(WAPDA)
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2011-2014
different installations and transformation processes. Investment in technological

processes is generally for the long term and is virtually irreversible.
79

(WAPDA)
MBA Finance
2011-2014
80

(WAPDA)
MBA Finance
2011-2014
My Working in MEPCO
Banking Section
There are two basic functions of banking sections which are:
Demand Notice
Billing Collection
Demand Notice:
In demand notice, there are two kind of deposits which are collected by banking
section of finance department. The first one is security. Which customers will
deposit at the time of application and it is refundable. The second type of deposit
is Capital deposit. In capital deposits, customers deposits according to their
requirements (for example Wire, meters, transformers etc) , which is not
refundable.
Billing Collection:
Customers paid their bills in different banks, and banking section is responsible
to collect data from revenue office and prepare bank reconciliation statement
and match balances . There are approximately 1700 branches of different banks
are working with MEPCO. Some of the banks are:
UBL (180 branches)
HBL (195 branches)
NBL (185 branches)
MCB (180 branches)
ABL (80 branches)
MOP (65 branches)
Consolidation Department/ A/R & A/P

Basic purpose of consolidation department is to prepare consolidated
statements. They received data from revenue office and make consolidated
statements of MEPCO. They basically make two type of statements which are:
81

(WAPDA)
Income statement
Balance Sheet
MBA Finance
2011-2014
Another function of consolidation department is to control the account receivable

and account payable.
Pre-Audit & Audit

Pre-audit and audit sections are responsible for all the work before audit. They
perform three type of functions which are:
Internal audit
Private audit
Government audit
Internal Audit:
Internal audit is the responsibility of Pre-audit section. They have 5 to 7 person
audit team and performed internal audit by getting information and data from
revenue and other departments.
Private Audit:
After the Internal audit, Pre-audit team hire the services of private audit company
and perform the private audit and helped them while getting different type of
information and data from different sections.
Government Audit:
It is the responsibility of Audit section of finance department. NEPRA has its
audit team which has its head office in LAHORE. They send their team in
MEPCO in every year for major audit. Audit team helped them to perform major
audit . This is how pre-audit and audit sections works. If there is any gape exist
they send "para" to particular department and ask them to answer.
Tax Section:
Tax section get the revenue figure from revenue department and calculate the
tax and report to WAPDA as well as PAKISTAN tax authority. This is how tax
section works for MEPCO.
Budget Section
82

(WAPDA)
MBA Finance
2011-2014
Budget section of finance department make two types of budgets which are:
Capital Budget
Expenditure Budget
Capital Budget:
In capital budget , budget section make budget for long term assets like
machinery, towers , vehicles etc. They basically get budget requirements from
different departments and after identification send the requirements to NEPRA
and get the overall budget. Then budget department distribute budget to all
required departments and get all types of bills and time to time information about
budget spending.
Expenditure Budget:
Expenditure budget is required to fulfill the expenses within the year, like petty
cash, telephone requirements etc. All the procedure of expenditure budget is
same just like capital budget.
Salary/Pension Section
Salary and pension section is responsible for making the salaries of all the
employees of MEPCO. On monthly bases, they make salaries slips and
calculate the total figure and get salaries from banking department and transfer it
to individual salaries account which has contract with HBL bank. Second function
of salary department is to make pension for all the retire employees of MEPCO.
Admin Section
Admin section is responsible to control all the sections and maintain all type
records on monthly bases. They send the record to head office of WAPDA. This
is how MEPCO finance department works.
83

(WAPDA)
MBA Finance
2011-2014
84

(WAPDA)
MBA Finance
2011-2014
Conclusion
I got a lot of experience in MEPCO. During my working I come to know that the
different units are working under one umbrella. I have noticed that they are
getting the benefits by minimizing different costs which earlier they were paying
due to lack of technology of computer.
The MEPCO has latest technology for its services and they are serving the
local market very well. MEPCO has open door policy for all tackle all problems
upfront Merit, Justice, Fair play be the hallmark Transparency in all fields
Accountability of everyone. The Multan Electric Supply Co. is a big organization.
It provides electricity to the consumers. It is performing his job very well but
certain improvements and developments are required. This organization has
vertical management system. The top-level management has ample potential to
make this company as an excellent company. The middle level and bottom level
management is also very hard working, punctual and geniuses. But unfortunately
the provision of equipments for maintenance purposes, the governments lengthy
planes, and inexperienced customer services department is spoiling the image of
the company. The demand of electricity of the consumers must be fulfilled at top
priority. Necessary actions should be taken against the span between the
demand and supply. The response of the employees on the failure of the supply
must be enhanced. Following conclusions are described here:
Increase in Raw material
Slow speed of implementation must be eliminated
Make exact estimate of the demand
Reduce the political factors in MEPCOs projects and system
augmentations.
Regarding De-Marketing, WAPDA or MEPCO is going without planning, as being
monopoly of WAPDA; it should emphasis on energy saving measures in different
ways like:
Reducing technical losses
85

(WAPDA)
MBA Finance
2011-2014
Reducing non-technical losses like reduction in theft of energy by different

tariff consumers.
In this way, the Extra revenue generated may be used on different WAPDA
Generation Projects, so that energy conservation may use for extra consumers
at villages where electricity in not still provided.
Similarly electricity or energy may be saved for use in industries, by giving
awareness to domestic consumes for saving energy through different ways.
The progress of different companies of WAPDA like MEPCO must be

compared with another company with good results regarding recovery
and line losses, inspite of giving targets to one company itself.
As no any competitor of WAPDA is there, so should be emphasis on

uninterrupted power supply to all kind of consumers at reasonable prices
per KWH. This can be done by:
o Production of electricity by gas and fuel.
o Constructing naturally designed hydel dams like Kala Bagh Dam.
o Small hydel dams must be constructed and in this way, Vision
2025 plan of WAPDA must be taken in consideration to fulfill future
power needs.
86

(WAPDA)
MBA Finance
2011-2014
Suggestions
The following are some suggestions about the MEPCO: Management should try create more understanding between different
department is to increase their productivity.
The top management should give the authority and flexibility to every
manager to make decisions according to the situation at any time and in
the absence of the top manager.
A proper training should be given to the employees and workers to
enhance their skills to increase their productivity and utility of the
MEPCO.
All the duties and responsibilities of the employees and the workers
should be clearly defined.
The computer technology should also be used in decision making as
well as in storing and feeding the data.
There should be decentralization in decision making.
The management should recruit right person for right job.
The management should hire multi skilled workers to get economy of
scales.
The employees must be well trained for customer services issues.
The extra equipment for maintenance and complaint attendance must
be provided to the staff.
The communication gap between senior management and lower
technical, maintenance staff must be improved.
The organizational hierarchy inside the organization must be reduced.
The application processing system must be improved. For complaints
and other customer related tasks, online computerized system should be
arranged.
The trust of the customers must be retained.
The DISCOS should purchase all rating capacitors 11 KV, 132 KV and
415 KV for improving voltage of the lines.
87

(WAPDA)
MBA Finance
2011-2014
Technical assistance should be given to the line staff regarding power

factor improvement through capacitors.
For new connection applicants of industries, a condition for installing
capacitors at factories must be imposed on industrialists to avoid voltage
drop due to heavy load.
A penalty should be imposed on industrialists who are not using
capacitors.
88

(WAPDA)
MBA Finance
2011-2014
89
MBA Finance

(WAPDA)
2011-2014
FINANCIAL REVIEW OF MEPCO

Fin
ancial Overview
FINANCIAL OVERVIEW OF MEPCO

Profit & Loss Account
For the Period ended 31-03-2014
Revenue
Sale of Electricity
Rental & Service Income
Amortization of Deferred Credit
Other Income
Total Revenue
(Rs.)
126,771,281,136
220,464,784
1,289,006,152
2,030,168,394
130,310,920,466
EXPENSES
Cost of Electricity
Operating Expenses (incl depreciation)
Financial Charges
Tax
Total Expenses
Profit for the year
107,799,701,283
10,218,553,365
375,567,429
118,393,822,077
11,917,098,389
FINANCIAL POSITION AS ON 31-03-2014

ASSETS
(Rs. in Million)
Tangible Fixed Assets
39,704.222
Long Term Advances / deposits
23.281
Current Assts
26,123.094
Total Assets
65,850.597
Equities & Liabilities
Share Capital & Reserves
Long Term liabilities
Current Liabilities
Total Expenses
4,779.078
16,220.889
44,850.630
65,850.597
90
MBA Finance

(WAPDA)
2011-2014
FINANCIAL REVIEW OF WAPDA
Horizontal Analysis:
BALANCE SHEETCOMMON SIZE HORIZONTAL ANALYSIS
Assets
2014
2013
In %
current assets
116,868,269,641 89,089,880,57
27778389067
Deferred tax asset
49185
31.18%
3739299066
5.82%
49185
Non-Current assets
67,896,023,045
64,156,723,97
9
Total Assets
184,764,292,686 153,246,604,5
31517688133
20.6%
53
91
MBA Finance

(WAPDA)
2014
2013
50,000,000,000
50,000,000,000
paid up capital
10,823,636,048
10,823,636,048
Accumulated Loss
(44,797,876,397)
(56,714,974,786
Equities and liabilities
Share
capital
2011-2014
In %
and
reserves.
Authorized capital
5,000,000,000
ordinary
shares of Rs10 each.
Issued, subscribed and
-11917098389
21.01%
2901744742
Non-current liabilities
38,949,475,879
15551352290
8.04%
36,047,731,137
Current Liabilities
12.24%
142,584,196,770
127,032,844,480
Total
Equities
Liabilities
and 184,764,292,686 153,246,604,5
31517688133
20.6%
53
92
MBA Finance

(WAPDA)
2011-2014
Profit and Loss Account (Common size Horizontal analysis)

2014
2013
Increase (decrease)
In %
Sale
126,771,281,136 140,240,103,230
(13468822094) 9.6
Rental
220,464,784
269,425,031
(48960247)
18.17
1,289,006,152
1,577,145,499
(288139347)
18.27
&Service
income
Amortization
of
deferred
credit
118,018,254,648 132,679,226,301
(14660971653) 11.05
Other Income
2,030,168,394
2,222,148,009
(191979615)
8.64
390,225,086
(14657657)
3.76
Financial
375,567,429
11,239,370,382
677728007
6.03
Total
Operating Cost
Charges
Profit for the 11,917,098,389
period
93

(WAPDA)
MBA Finance
2011-2014
Vertical Analysis
BALANCE SHEETCOMMON SIZE VERTICAL ANALYSIS
Assts
2014
2013
Non-current assets
36.74%
41.86%
Current assets
63.26%
58.14%
Total Assets
100%
100%
Equities and Liabilities
2014
2013
94

(WAPDA)
MBA Finance
2011-2014
Share capital and reserves

Authorized capital
5,000,000,000 ordinary shares of Rs 10 each
Issued, subscribed and paid up capital
Accumulated loss
(18.38%)
(29.93%)
Deferred Credit
20.13%
23.52%
Non-current liabilities
21.08%
23.52%
Current Liabilities
77.17%
82.89%
Total Liabilities and Equities
100%
100%
95
MBA Finance

(WAPDA)
2011-2014
Profit and Loss Account

Common size vertical analysis
2014
2013
Sale
100%
100%
Rental & Service
0.17%
0.19%
of 1.06%
1.12%
Amortization
Deferred credit
Operating Cost
93.09%
94.60%
Other income
1.601%
1.58%
Profit after Interest &

Tax
9.4%
8.01%
96

(WAPDA)
MBA Finance
2011-2014
NTERPRETATION
Horizontal Analysis
Horizontal analysis of 2014 and 2013 at MEPCO shows that sales decrease by 9.6% due
to shortage of electricity. In spite this less sale MEPCO decrease its overall operating
profit and bring incremental in Net profit and EPS in year 2014 as compared to previous
year 2013. While looking to balance sheet, fixed assets decreased by 5% but current
assets increased by 5% as compared to previous year, its means MEPCO is generating its
income through current assets and that's why relying on its current assets. While on the
liabilities sides it is good sign that MEPCO control on both types of liabilities (current &
Non-current) and decreased 5% respectively. Its means that company is generating its
income by using its own resources rather than using anyone else resources.
Vertical analysis
In Vertical analysis, Size of gross profit in proportion to sales has increased and that is
the case with operating profit as well. But important thing to note is that NPAT has
increased by 1.3%, proportion to sales. Investment in fixed assets look to decrease
slightly but this factor is due to depreciation mainly. Long-term investments and long
term loans and advances are decreasing in comparison with previous year. This is
because of decrease in sales. Now interesting thing to note is that value of total current
assets in total assets has increased by 5% in proportion to total assets.
97

(WAPDA)
MBA Finance
2011-2014
Ratio Analysis Of MEPCO MULTAN

Ratio
Formula
2013
2014
Liquidity
1. Current Ratio
Current assets/current liabilities
0.70
0.82
2. Acid test Ratio
Current assets-Inventory/current liabilities
0.70
0.82
Total liabilities/ Total Assets
106.41%
98%
29.80
32.7
Debt
3. Debt ratio
4. Times Interest earned Earnings before interest & tax/ Interest

ratio
Profitability
5. GP margin
Gross profit/ sale *100
101.36
101.19
6. NP margin
Net profit/sale *100
8.014
9.40
7. ROA
Earnings available for common stockholder/ Total 7.33%

Assets
6.44%
Market
98

(WAPDA)
8. Price/Earnings ratio
MBA Finance
2011-2014
Market price per share of common stock / Earning 0.96
0.91
per share
9. Earnings per share
Net income preferred dividends/CS outstanding
10.384
11.010
10. Market/Book ratio

Market price per share of common stock/ Book 0%
0%
value per share of common stock
Ratio Analysis
Liquidity of Firm:
Current ratio of the firm predict that the firm is in a favorable position because its
current assets are more than its current liabilities and firm can easily meet its current
obligations. But the recommended position of current ratio would be more than one
which firm does not fulfilled but in time series analysis, its liquidity increase in current
year as compare to year 2013.
Leverage of Firm
Firm has 106.41% debt in its capital structure, which shows greater leverage. From
investor point of view it is quite acceptable because equity has 37% of share. If we look
time series analysis firm has less leverage from previous years 2012 & 2011. From
debtor point of view it is also acceptable because mostly others firms in industry have
also more than 60% of its debts, so they can make decision for granting the loan easily.
Its interest coverage capabilities are increase from year 2013 to current year 2014 but
firm still be able to meet its interest expenses comfortable.
Profitability of Firm
Profitability of the firm decrease as compares to previous year, because in current year it
has nine months statements. Overall it has greater performance due to better economic
conditions in 2014 as compared to previous year.
Market standing
Firms degree of financial leverage is quite unacceptable in time series analysis because
it is less than one but less compare to year 2013. Lender can still rely on them for their
interest payment. Firm EPS increase in year 2014 just because of greater sales and cut in
expenditure compare to year 2013.
99

(WAPDA)
MBA Finance
2011-2014
References and Sources Used

Website of MEPCO/WAPDA
Technical brushers of MEPCO
Personal meetings with different mangers
MEPCO new induction training program booklets
Standard Operating Procedural (SOP) documents
Annual Reports published by MEPCO for FY 2009
Technical data prepared and collected by MEPCOs library.
100

MEPCO Internship Report

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INTERNSHIP REPORT ON MEPCO

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

10. WAPDA Introduction .

13. SWOT Analysis

14. Porters 05 Forces Analysis .

15. PEST Analysis ..

16. My Working in MEPCO ..

17. Conclusion and Recommendations..

18. Financial Analysis

19. References and sources used

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

Some words about the Report

"Christian Nevell Bovee"

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

Absolute praise for Almighty Allah, provider of hope, guidance and

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

learned about distribution

system of MEPCO, technical

correspondence between departments and flow of data between departments. I

INTERNSHIP REPORT ON MEPCO

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

Purpose of the study

To get acquaintance to the MEPCO operations.

To know what sort of changes management brings in managerial

To see the application of our Professional studies especially.

A partial fulfillment as a requirement for the completion of MBA Degree.

To objectively observe the operations of MEPCO in general and the

To make recommendations or implementation plans for the improvement

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

b. Chief Engineer / CS Director

c. Chief Engineer / Op. Director

e. Manager (O&M) Distribution

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

Area Electricity Board Multan

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

electricity to the consumers at affordable

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

R.Y. Khan, Vehari, Muzaffargarh, D.G. Khan, Layyah, and Rajanpur.

Organizational Structure of Mepco

Adnan Akhtar (MB-11-65) | Institute of Management Sciences

INTERNSHIP REPORT ON MEPCO

Jurisdiction Map of MEPC

Adnan Akhtar (MB-11-65) | Institute of Management Sciences