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MBA (E)

INTERNSHIP REPORT ON MEPCO Marketing 2010


(WAPDA)

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 NWFP 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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MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)

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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12
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)

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.

Missi
on
Ensure convenient availability of high

quality electric power to the people at

affordable price, retaining financial viability

of the Company.

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13
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
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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MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)

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.

Cult
ure
MEPCO has its own strong culture. The employees
own the company.

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15
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)

Core Values
The core value of the company is that no
other company is operating in this area for
this purpose.

Business Strategy
The business 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.

Technical
Overview
Mah amia University Bahawalnagar
16
Campus

mood-ul-Hassan Abbasi | The Isl


MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)

Area of Operation
MEPCO's area of responsibility covers Civil Districts of Multan,
Khanewal, Sahiwal, Pakpattan, Bahawalnager, Lodhran, 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 109,381 Nos.


Capacity of Distribution Transformers 5639.770 (MVA

Jurisdiction Map of
MEPC

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17
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
Organo
gram
Mahmood-ul-Hassan Abbasi | The Islamia University Bahawalnagar Campus
18
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
Manager
(Operation)

Dy.Manager
(OP)

Assistant
Manager (OP)

Top Management

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19
ar Campus
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
Mr. Guftar Ahmed
Chief Executive Officer
O/o Chief Executive MEPCO HQ, Multan.
Off: No. 061-9210333
Res. No. 061-9210357
Mob: No. 0321-4560001

Mehar Khan
General Manager / (Op) Director
O/o Chief Executive MEPCO HQ, Multan.
Off: No. 061-9210282
Res. No. -
Mob: No. 0345-3041021

Formations under Jurisdiction

1. All Managers Operation.


2. Power Control Center

Mr. Pervaiz Akthar Shah Khaga

General Manager / (Tech) Director


O/o Chief Executive MEPCO HQ, Multan.
Off: No. 061-9210335
Res. No. -
Mob: No. 0300-6783100
Formations under Jurisdiction
1. Project Construction
2. O & M (Distb)
3. Safety

Mr. Shafqat Asghar Tahir


Chief Engineer / (Distb:) Director
O/o Chief Executive MEPCO HQ, Multan.
Off: No. 061-9210006
Res. No. 061-9210008
Mob: No. 0300-8630580
Formations under Jurisdiction
1. Manager (MM) Distb:
Muhammad Shakeel
Chief Engineer / (Development)
O/o Chief Executive MEPCO HQ, Multan.
Off: No. 061-9210377
Res. No. 061-9210380-Ext:2076
Mahmood-ul-Hassan Abbasi | The Islamia University Bahawalna
20

gar Campus
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
Mob: No. 0300-7300422
Formations under Jurisdiction
1. Procurement
2. Project Finance
3. Planning Scheduling & Coordination
4. DM Environment & Safeguard.

Mr. Anjum Naveed Arrain


Chief Engr: / (CS) Director
O/o Chief Executive MEPCO HQ, Multan.
Off: No. 061-9210338
Res. No. -
Mob: No. 0300-9686688
Formations under Jurisdiction
1. Commercial Directorate
2. Mark, Tariff, Contract Management
3. Surveillance & Investigation

Mr. Hamayon Khan Sadozai


Chief Engr: / (P&D)
O/o Chief Executive MEPCO HQ, Multan.
Off: No. 061-9210348
Res. No. -
Mob: No. 0333-6188522
Formations under Jurisdiction
1. O & M Directorate

Mr. Faiz Muhammad Khouso


Chief Engineer / (Op.) T&G
O/o Chief Executive MEPCO HQ, Multan.
Off: No. 061-6782286
Res. No. 061- 6221660
Mob: No. 0333-6061667

Formations under Jurisdiction

1. (O&M) T&G
2. GSO Circles (Multan & Sahiwal)

Mian Iftikhar Ahmed

HR & Admn Director


O/o Chief Executive MEPCO HQ, Multan.
Off: No. 061-9210388
Res. No. 061-9210389
Mahmood-ul-Hassan Abbasi | The Islamia University Bahawalnag
ar Campus
21
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
Mob: No. 0300-4124743
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.
Off: No. 061-9210323
Res. No. 061-9210299
Mob: No. 0300-4296652

Formations under Jurisdiction

1. MCA
2. CPC

Mr. Tanveer Ahmad Sheikh


(Chairman)/Director
Industrialist / MD, Maqbool Textile Mill,

Chowk Sarwar Shaheed, Muzaffargarh.

Board of Directors
Ch. Guftar Ahmed (Director)

agar Campus
Mahmood-ul-Hassan Abbasi | The Islamia University Bahawaln
22
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
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.

Mr. Shahbaz Ahmed Khan (Secretary)


Company Secretary MEPCO

Inputs and Outputs of MEPCO

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23
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
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 through out 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 through out Multan division to various sub divisions

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24
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
Introduction of WAPDA

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25
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
WAPDA, the Pakistan Water
and Power Development Authority, was
created in 1958 as a Semi-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 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 responsible 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 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
Agreements (LLTA) has been signed with Corporate Entities and execution of
loan transfer is complete.

Mahmood-ul-Hassan Abbasi | The Islamia University Bahawalnagar Campus


26
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)

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
every 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
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.

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27
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)

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 WAPDA to fill in the deficit. In order to maintain transparency, fair
competition and protection of customers the Government of Pakistan
enacted the Generation,

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28
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
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

Pakistan, and, finally, assist the regulatory tariffs for new private power
projects. The Alternative Energy Development Board (AEDB) was founded in
May 2003

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29
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
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 bee 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 investment on coal/gas based power projects, by adjusting the
tariffs to provide
the incentive
Mahmood-ul-Hassan Abbasi | The Islamia University Bahawalnagar Campus
30
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
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
(loadshedding) 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, damaged equipment and an added maintenance averaged at 10
percent of annual
sales.
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31
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
This figure has increased from about six percent in 2002. The report has
recommended that if uniform tariff is applied nation wide, 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 electricity services a startling increase from the 25 percent
firms that reported
making such payments in 2002.

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32
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
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 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.

Mahmood-ul-Hassan Abbasi | The Islamia University Bahawalnagar Campus


33
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)

Demand and supply of


electricity:
According to the Ministry of Water and Power, the deficit of power for the
years 2008-09 and 2009-10 is 4,025 MW and 5,529 MW respectively.
Projection for demand and supply of electricity (2008-2010)

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.
Maximum load:
Maximum on the different power plants during the year 2007-08 is given
in below table:

WAPDA - Supply and demand estimates:


Electricity consumption in the country is growing steadily. The projected
committed power generation and peak demand in the areas of WAPDA for the
year 2009-10 and 2010-11 is given as under.

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Consumers:
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)

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The sector-wise and province-wise consumption of electricity is given in the following charts:

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

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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
proximity of the steel mill and therefore cheaper purchasing price of steel
compared to c opper. 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.

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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
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

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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
Commission operates both nuclear plants. Pakistan's first nuclear reactor was
set- up 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)

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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 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 large-
scale projects for investors that included
a
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.
Future Outlook and Scenarios

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Pakistan at the present can provide only 50-55 percent of its population
with electricity, albeit intermittently. The government has made it a priority to
add 3,000
MW of electricity by end of 2009 and to add approximately 15,000 MW by 2015
in order to reliability provide electricity to an increasing percentage of the
population. Electricity demand outstrips supply by in excess of 3,000 MW in
the summers and 2,500 MW in the winters with the gap expected to grow and
reach almost
5,500 MW by end of 2010. In this scenario is it impossible for the government of
Pakistan to provide power and fill this gap, rendering Independent Power
Producers (IPPs) viable and imperative. IPPs provide approximately 30 percent
of the country's generation capacity and with this addition of 2,200 MW, IPPs will
provide more than 40 percent of the country's generation capacity.
To prevent the electricity deficient from getting out hand and to minimize
future supply deficits, Pakistan has adopted a system development plan
called
Vision 2025' that targets to add 35,000 MW by the year 2025 to help sustain
growth of the Pakistani economy and to provide electricity to the under served
rural areas of Pakistan. This number of 35,000 MW is nearly twice as much
power that was available to Pakistan at the end of 2002 and 175% of the
installed capacity as of 2009. Around two thirds of the additional power (22,563
MW) is slated to come from Hyde electric power plants. New gas-fired power
plants are supposed to contribute 13% (4,680 MW), along with coal-fired power
plants of 13% (4,350 MW). New nuclear power plants with a total installed
capacity of 5% (1,800
MW) are planned. Finally, renewable sources of energy are supposed to account
for more than 4% (1,500 MW) of the overall newly installed capacity. The planned
expansion will cost approximately US$ 30 billion. In view of Pakistan's high
national debt and persistent budget deficit, the government always positioned this
as a largely private effort with the hope of attracting private investors and strategic
players.

Pakistan has decided to launch two new nuclear power projects at


Chashma worth Rs 129.37 billion that would generate 640 MW power to
induct into national grid. These plants include Chashma Nuclear Power Project
(c3) and
Chashma Nuclear Power Plant (c4) and government has allocated Rs 100
million
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for these nuclear power projects in the Public Sector Development Programme
(PSDP) 2008-09.

Two more private power projects have obtained financial closure for
establishment of 420 megawatts electric power stations. The two projects,
Hubco-Narowal Power Project and Liberty Power Tech Project have achieved
financial closure for 220 and 200 megawatts electric power stations and have
gone into construction phase. The
sponsor of HUBCO-Narowal project, located at Narowal, is the Hub Power
Company Limited, while the lenders of project include Habib Bank Limited (HBL),
National Bank Limited (NBP), Allied Bank Limited (ABL) and Bank Al-Falah. The
sponsors of Liberty Power Tech Project, located near Faisalabad, are Liberty
Mills Limited and Mukaty Family, while lenders of project are Allied Bank Limited
(ABL), Habib Bank Limited (HBL), National Bank Limited (NBP), Faysal Bank
Limited (FBL), Meezan Bank Ltd and Bank Al-Falah Ltd, etc. The estimated
investment in HUBCO-Narowal project is approximately US$ 274 million while in
Liberty Power Tech Project it is US$ 240 million, expected to be commissioned
by March 2010 and December 2010, respectively. With these two projects
having started construction, a total of twelve (12) new IPPs are now under
construction through government's power policy and will add a capacity of 2,539
megawatts by
end of 2010.

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WAPDA vision 2025

The high profile vision 2025 was unfolded at a seminar arranged by


WAPDA and inaugurated by the President Gen. Pervez Musharraf in Lahore on
Monday. The Chairman Water & Power Development Authority Lt. Gen Zulfiqar
Ali Khan highlighted WAPDA vision which envisages meeting the entire needs of
water and power generation requirements of the country at a total expenditure of
45 billion US dollars.

Inaugurating the seminar on "Water Resources and hydropower


development programme; vision 2025", President Musharraf, attired in his
Military uniform, commended the efforts of his comrade General Zulfiqar to put
the long-ailing WAPDA on the right path. Gen. Musharraf disclosed that former
prime minister Nawaz Sharif sought Army's help in managing the affairs of
troubled WAPDA. "Accepting the PM's suggestion, I asked Lt. Gen. Zulfiqar Ali
Khan to assume the charge of Chairman WAPDA, though he (Zulfiqar) was a bit
shy.... but he took up the great challenge and proved his mental by plugging in
the leakages and pulled out the corporation for a turnaround," General
Musharraf remarked.

He said that WAPDA was on a right path and marching towards a great
recovery. The Vision 2025, he said, was also a marvellous achievement under
which short-term strategies have been developed for the good of the country.
Elaborating WAPDA Chairman, said, six of the schemes that form part of Vision
2025 are due to be launched next month. They include the Gomal Dam in
NWFP, Hingol Dam and Mirani Dam in southern Balochistan, the Greater Thal
Canal in Punjab and the Right Bank Outfall Canal in Sindh. The cost of these
five schemes is estimated at nearly 5 billion dollars. At current prices, the total
cost of the Vision 2025 programme which also includes Basha Dam on the
Indus River in the Northern Areas, 320 kilometers upstream of Tarbela Dam is
estimated at $45 billion.

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Chairman said that these six projects, costing 6.29 billion dollars, would help
generate 2817.4 MW power besides creating water storage facility of 5.04 Million
Acre Feet (MAF) which will bring 1,936,200 areas of land under cultivation in all
four provinces of the country.

He said that the objective of the seminar was to seek participation of the
interested parties including national and international investors for the fast track
and cost effective implementation of the projects. "The seminar aims to share
details and status of projects, of foreign and local investors," he said.

The Chairman said that due to sedimentation, Tarbela, Mangla and


Chashma reservoirs have already lost 4.26 million MAF capacity and this loss
would be 5.94 MAF by year 2010 which was almost equivalent to the original
storage capacity of Mangla Dam.

He lamented that so far existing reservoirs could store 17.1 MAF water
out of total storage potential of 64.4 MAF which was only 11 per cent of available
surface water. "We can cultivate around 22.5 million acre cultivable land by using
the available water resources," he observed. He added that same was the case
of hydropower generation as only 16 per cent of our total capacity could be
achieved.

General Zulfiqar Ali Khan said that according to a study, we may face
power shortage of 650 MW by the year 2006. However, by harnessing the
potential to generate 40,000 MW, this shortage could easily be overcome. He
said that during the last 20 years, the share of hydropower in total generation
had reduced from 60 per cent to 20 per cent.

The Vision 2025 is to be implemented in three phases. The federal


cabinet approved the Vision 2025 programme in August last year. Under Phase
1 of the three-phase programme, WAPDA has been given the go-ahead to
undertake detailed engineering and feasibility studies for Basha Dam and the
Greater Thal Canal, as well as for Kachi Canal in Balochistan, the Chashma

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Right Bank Canal in NWFP, the Thal reservoir project in Punjab, and three
projects in Sindh: Riverne Area Development, Thar Canal and Sehwan Barrage.
The total cost of these projects is estimated at $11.71 billion (at the current
exchange rate of 64 rupees to the US dollar).

Priority hydroelectric generation projects in Phase I include: Jinnah ($162


million), Malankand-III ($80 million), Allai Khawar ($110 million), Golen Gol ($104
million), New Bong ($110 million) Khan Khawar ($86 million), Duber Khawar
($109 million, and Pehur High Level ($8 million).

In January this year, the federal government also approved Phases II and
III of the Vision 2025 programme. Hydroelectric project to be built under Phase II
include: raising the height of Mangla Dam to increase its reservoir storage and
power generation capacity ($850 million), Thal Reservoirs ($58 million), Doyian
($346 million) Neelkum-Jhelum ($1.5 billion), Kohala ($1.4 billion), Matiltan ($110
million), Gulpure ($150 million), Abbasian ($250 million), Rajdhani ($113 million),
and several combined cycle power generation projects ($2.9 million).

Phase III includes 16 schemes, including dams and generation projects:


Basha ($6 billion), Dasu ($3.1 billion), Patan ($2.97 billion), Thakot ($2.56
billion), Bunji ($2.69 billion), Munda ($1.56 billion), Chakothi ($167 million),
Naran ($262 million), Suki Kinar ($750 million), Patrind ($167 million), Azad
Pattan ($266 million) Karot ($252 million), Thar Coal Project ($1.6 billion) Lakhra
Coal Project ($360 million, and several combined cycle power generation
projects ($1 billion).

Vision 2025 is the most ambitious development programme in Pakistan's


history, and its implementation will, of course, depend on the country being able
to find the money to finance it. Even so, its basis reflects very creditably on both
the Federal Government.

Among the international lending agencies that have shown interest in co-
financing the Vision 2025 programme is the Asian Development Bank (ADB).

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However, it is not yet clear as to what will be the size of ADB's investment.
Before firming up its investment plans, the ADB is expected to consult other
lending agencies and donor countries that may be interested in providing funding
for the programme. A report prepared by WAPDA and the federal government on
Vision 2025 was circulated amongst ADB's partners earlier this year and is said
to be under consideration by them.

The World Bank is also said to have shown interest in partly financing the
Vision 2025 programme, but its support is said to be conditional upn counterpart
financing by the Pakistan government and WAPDA. According to the Economic
Affairs Division, financing for the progrmme is also being discussed directly with
China, Saudi Arabia, the United Arab Emirates and several other friendly
countries.

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Crisis of Electrical Energy in
Pakistan and
Future guidelines for
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.
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

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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.

Present Situation of Crisis

Total generation of electricity by different sector in Pakistan is presented


in Table 1.
Share of different kind of power generating plants in Pakistan is presented
in Figure 2.
Historical peak demands of Pakistan from year 2002-2007 are presented
in Table 2.
Forecast of demand and generation for the years 2009-2020 is given in
Table 3.
A careful examination of the tables 2 and 3 clearly indicates that although
Pakistans installed generating capacity will increase, the shortfall will

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continue to exist [Federal Bureau of Statistics 1998]. The government
must take steps to overcome this situation.

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 hydro-
electric 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.

Conclu
sion
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.

Table 1. Total capacity of electric power generation of Pakistan in 2009

Table 2 Historical peak demand 2002-2007

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Table 3. Forecast Supply and demand position from 2009-2020 in MW

Table 4. Pakistans Total Power Potential

Table 5. Run of river projects with their feasibility status

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Fig.1. Block diagram of power system

Fig.2. Power generation in Pakistan by different sectors

Fig. 3. Power generation in last few years by WAPDA and KESC

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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.

Competi
tors:
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.

Gujranwala Electric Power Co.

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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.

Peshawar Electric Supply Co.

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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

Karachi Electric Supply Company Ltd.

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

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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
Karachi Electric Supply Company Ltd.

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 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.,

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energy meter, M&T deals with checking installation, testing and re-calibration of
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

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courses to familiar with advance security systems and arms. For this purpose a
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
MULTAN ELECTRIC POWER COMPANY (MEPCO)
MEPCO 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 Khyber-
Pakhtunkhwa. MEPCO is the largest organization in the region; having 17193
employees. 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.
History of MEPCO
Under the WAPDA act 1958, WAPDA created eight Area Electricity
Board in all four provinces to distribute electricity. The distribution in Southern
Punjab including Bahawalpur, D.G.Khan and Multan Divisions were entrusted to
newly created Area Electricity Board Multan. The company which was supplying
power to the Multan area was known as MESCO. Defunct MESCO was taken
over by WAPDA in the year 1981. All these Area Boards were under General
Manager (Op) Distribution WAPDA Lahore. During 90s when new corporate
culture was emerging in Pakistan and public sector companies were being
privatized, WAPDA also envisaged the restructuring of its Power Wing.
Accordingly 12 companies were established and got registered from SECP. Out
of these; 08 companies were Distribution companies, 3 were Generation and 1
Transmission and Dispatch Company. MEPCO was established w.e.f 01-07-
1998 replacing the old Area Electricity Board Multan. At present MEPCO is
providing electricity to 13 districts of Southern Punjab. It has more than 3332147
Domestic, 380661 Commercial, 40472 Industrial, 59584 Tube Well and 1685
other consumers.

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EXISTING STRENGTH of
Employees
Up to April 2010

S.# Category Distribution GSO Total

01 Officers Gr-18 & above 151 10 161

02 Assist: Managers 256 31 287

03 Assist: Managers (C.S) 25 0 25

04 LS-I 479 23 502

05 LS-II 408 5 413

06 SSO-I 1 109 110

07 SSO-II 1 218 219

08 Foreman 3 21 24

09 LFM-I (Foreman) 35 0 35

10 LFM-II (Foreman) 37 1 38

11 Commercial Assistant 637 0 637

12 LM-I (Lineman) 1559 63 1622

13 LM-II (Lineman) 1497 83 1580

14 ALM (Asstt: Lineman) 4154 53 4207

15 Meter Reader 1637 0 1637

16 Bill Distributor 440 0 440

17 Chowkidar / NQ 850 40 890

18 Clerks all types 957 24 981

19 Other Staff 2016 1369 3385

Grand Total 15143 2050 17193

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ORGANOGRAM
HR Directorate MEPCO

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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 medium-
term goals of the company.
c) Develop the policies, guidelines and procedures for the following
human resources

management concerns: -
Manpower planning / budgeting
Recruitment and Selection
Appointment, deployment, re-deployment / transfers
Compensation and benefits administration
Career planning and promotion
Performance management

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Incentives administration
Training and development
Grant of Move over
Grant of permission for higher education
Consider and approve transfer requests.
Sanction leave.
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

3. Transfer / Posting

Transfer and Posting of Staff and Officer


Vacancies Statement and Manpower Data
Incumbency Statement / Register

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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 a
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:

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...)

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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
evaluation criteria
length of probationary periods
duties to be evaluated

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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:

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

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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,

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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.

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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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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

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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

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INTERNSHIP REPORT ON MEPCO
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(WAPDA)
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Marketing 2010
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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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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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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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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.

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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.

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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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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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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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different installations and transformation processes. Investment in technological
processes is generally for the long term and is virtually irreversible.

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My Working in
MEPCO
During my work in MEPCO Division I was given task, for improvement of
the area electricity distribution system, whether it relates to LT voltage system or
it is HT, that is high tension (11KV) system through installing capacitors in the
system to be improved.
I did that practically on the line whether these are of 415 volts, 11 K volts or it is
132 KV lines.
The permission was granted for that and requested by Dy.Manager (OP)
MEPCO Division Haroonabad to the technical advisor, of PEPCO for MEPCO
Multan and provide me chance for conveying my views and experience to the
Dy.Manager(OP) MEPCO Davison Haroonabad and other engineers.
The company has purchased 132 KV, 11KV and 415 KV capacitors to
2
reduce I R losses and three sets of each bank was drawn by the concerned 11
KV feeder incharge (Line Superintendent) and was allowed for experiment use
by me in coordination with and supervision of Dy.Manager (OP) Haroonabad.
The capacitors are basically two metal plates with opposite charges
(+Q, -Q) with a dielectric in between so that current cannot pass across and
hence voltage only stored.
It means, improvement of system by installing capacitors of rated voltages
results in increasing voltage at a long length already existing electricity lines.
For that, ultimately line losses are to be reduced technically.
2
Line Losses = I R
Where I = Current
And R = Resistance of Conductor
R = Resistance depends on the length of the conductor and is directly
proportionate to the electricity line length and inversely proportionate to the area
across section of the conductor.

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That is:
RL
And
R 1/A
Combining these to relations we have formula
R L/A
Or
R = L/A
Where = constant of proportionality resistivity
And L= Length of Conductor
A = Area across section of conductor.
In simple words, it means:
More length, more resistance
More thick, the conductor, the less resistance will be there and vice versa.

So I choose site for 11KV feeder of City Haroonabad after calculations as use
capacitors in circuit at different locations and I did that through provided line staff
by the Dy.Manager (OP) Haroonabad.
The sketch for the 11 KV feeders where I installed capacitors is shown below.

132 KV 132/11 KV I3 I4 I5 I6
I1 I2
C1 C2 C3

C1, C2, and C3 are three capacitors, I installed for improving the system. I
did that after getting shut down approved for the said feeder by concerned line
superintendent from the concerned Grid Station as it was necessary for the
safety measures.
Before shut down and installing capacitors, I have noted the running current at
different locations as follows:
I1 = 87.5 amperes
I3 = 89.02 amperes

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I5 = 86.54 amperes
These readings were taken from amperes meters at panel of the Grid Station.
After, installing capacitors, I cancelled the shut own of grid and noted the current
amperes again after the capacitors accordingly and found as follows.
I2 = 98.52amperes
I4 = 107.43 amperes
I6 = 102.52 amperes
This clearly shown by comparing above six values of currents those current
values (due to voltage improvement) after the capacitors have increased as:
I2 > I1
I4 > I3
I6 >I5
So it was an experiment and was successfully appreciated by the technical
officers of the office of the Dy.Manager (OP) Haroonabad.
So system of MEPCO WAPDA, HT, and LT lines may be enhanced and hence
improved by installing capacitors on every lengthy feeder lines, particularly at
villages feeding lines and also at overloaded lines.
The work was appreciated by the Manager (OP) MEPCO Circle and suggested
to the higher ups for purchasing of high voltage capacitors, so that, in this way
the voltage problem at village areas and load areas may be improved. This can
also have an impact on revenue generation of the MEPCO.

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INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
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Conclu
sion

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

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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.

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Sugges
tions
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.

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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.

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99
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INTERNSHIP REPORT ON MEPCO
Marketing 2010
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FINANCIAL REVIEW OF MEPCO

FINANCIAL OVERVIEW OF MEPCO


FINANCIAL RESULTS DURING 2008-2009
Revenue (Rs. in Million)
Sale of Electricity 62,745.023
Rental & Service Income 182.537
Amortization of Deferred Credit 1,009.089
Other Income 1,592.379
Total Revenue 65,529.028

EXPENSES
Cost of Electricity 61,886.892
Operating Expenses (incl depreciation) 6,637.902
Financial Charges 304.739
Tax -
Total Expenses 68,829.533
Loss for the year (3,300.505)

FINANCIAL POSITION AS ON 30.06.2009


ASSETS (Rs. in Million)
Mahmood-ul-Hassan Abbasi | The Islamia University Bahawalnagar Campus
Tangible Fixed Assets 39,704.222
101Long Term Advances / deposits 23.281
Current Assts 26,123.094
Total Assets 65,850.597

Equities & Liabilities


Share Capital & Reserves 4,779.078
Long Term liabilities 16,220.889
Current Liabilities 44,850.630
Total Expenses 65,850.597
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
FINANCIAL REVIEW OF WAPDA

WAPDA Power Wing (Hydroelectric) is operating under the generation


license granted by the power regulator NEPRA, for operation, maintenance and
development of hydel power resources in Pakistan. The installed capacity of
existing hydel power plants in operation is 6,444 MW. Major hydro plants include
Tarbela (3,478 MW), Ghazi Barotha (1,450 MW), Mangla (1,000 MW) and
Warsak (243 MW).
Capacity
During the period under review, WAPDA Power Wing (Hydroelectric) has
made available its full capacity of 6,444 MW, with water outflow limitations.
Operational Performance
The Net Electrical Output (NEO) for the year stood at 27,363 MKWh,
decrease by 859 MKWh over the same period last year. This decrease in energy
is due to reduced water indents during the year 2008-09 particularly from
Tarbela power station.
Financial Performance
Net profit of WAPDA for the year under review stood at Rs.12,521 million,
which is less than previous year figure of Rs.12,615 million. Sales revenue
during the period comes to Rs.29013 million consisting variable charge of Rs.8
447 million and fixed charge of Rs.20,566 million as per NEPRA approved tariff.
Despite of decrease in net electrical output, sales revenue has increased by
Rs.546 million from the previous years figure of Rs.28,467 million due to the fact
that new tariff was notified in September 2007 and was applied in last three
quarters of the FY 2007-08 only, whereas, in FY 2008-09 new tariff was applied
on full year.

Operation & Maintenance expense stood at Rs.3,011 million, which has


increased by Rs.482 million from the previous year figure of Rs. 2,760 million.

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Employees cost during the period was Rs.2,136 million, consisting of pay and
allowances Rs.1,125 million and employees benefits Rs.1,011 million.
This is Rs.262 million higher than last year because of increase
announced by Government of Pakistan. Admn cost for the year stood Rs.336
million as compared to last year figure of Rs.214 million. Plant repair and
maintenance expenses for the year were Rs.539 million as against Rs.242
million of last year. Depreciation charge for the period worked out to Rs.3,454
million, for the fixed assets valuing Rs.159,378 million (gross value). WAPDA is
paying Rs.6,000 million annually, on account of net hydel profit, to Government
of NWFP as adhoc payment. Water Usage Charge amounting to Rs.695 million
has accrued to Government of Azad Jammu & Kashmir, at the rate of Ps 15 per
unit of electricity generated by Mangla Power Station, as against Rs.685 million
paid last year. The increase in the water usage charge is due to more generation
by Mangla Power Station.
Cash Flow
During the period under report, CPPA has made payment of Rs.20,429
million against billing of Rs.29,013 million. In order to make partial redemption of
foreign currency loan of US $ 125 million, arranged through Standard Chartered
Bank, Rs.2,038 million was borrowed as Bridge Financing from WAPDA
Equipment Protection Organization. For financing of capital expenditure of
Khawar project, external loans of Rs.1,522 million, obtained from Islamic
Development Bank (IDB) were also utilized during the year. Funds received from
CPPA during the year were mainly applied towards payment of net hydel profit to
Government of NWFP and WUC to
Government of Azad Jammu & Kashmir, payment of markup on Running
Finance/Short term loan on WAPDA on behalf of PEPCO entities and operating
costs. Capital Expenditures of Rs.8,174 million WAPDA Hydroelectric for the
year are in line with Water Resources and Hydro Power Development Vision
2025 Programme envisioned by the Federal Government. New loans of
Rs.2,540 million were obtained for financing of Khan Khwar, Allai Khwar, Dubair
Khwar, Jinnah Hydro Power projects which are near to completion.

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Assets
Fixed Assets in Operation (gross value) as on June 30, 2009 remained at
Rs.159,378 million, against the last years closing balance of Rs.160,241 million.
The value of net fixed assets in operation has also decreased from Rs.127,642
million to Rs.124,104 million. Increase in Capital Work in Progress of Rs.8,174
million is mainly because of capital expenditure on development projects in
progress i.e. Khan Khwar, Allai Khwar, Dubber Khwar and Jinnah hydropower.
Long Term Investment of Rs.186,913 million mainly comprise investment of
Rs.182,859 million (deposit for shares) in ex-
WAPDA Companies, comprising nine DISCOs, four GENCOs, NTDC and
Neelum Jhelum Hydro Power Company. This amount depicts the net worth of
the formations as a result of the transfer of assets and liabilities from WAPDA to
the corporatized entities. The companies will issue shares to WAPDA for this
investment after BTA closing date i.e. June 30, 2008, and accordingly WAPDA
will issue shares in the name of President of Pakistan, reducing the investment
of GoP in Residual WAPDA Power Wing. Store and spares worth Rs.1,442
million relates to hydel power stations and has no significant change in the stock
during the period under report. Trade Receivable from NTDC are Rs.151,371
million. This includes Running Finance facility/short term loan of Rs.48 billion
taken by WAPDA on behalf of PEPCO entities which GoP has agreed to settle
as its own, and this liability is to be transferred to Power Holding Company and
WAPDAs receivables from CPPA will be reduced accordingly. Moreover, Rs.31
billion will be adjusted against KESC dues. Advances, Deposits and other
receivables amounting to Rs.31,114 million mainly consists of receivable from
the associated companies/formations. Cash and bank balances as at June 30,
2009 was Rs.772 million, which was significantly less than the last year figure
due to suppressed release of funds from CPPA against power sale billing.
Capital & Liabilities
Equity balance of Rs.359,454 million as at June 30, 2009 comprised of
Rs.294,147 million including share capital, revaluation surplus and investment by
Government of Pakistan, whereas, Rs.65,308 million represent accumulated
profit of WAPDA Power wing.

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Government of Pakistan extended grants of Rs.8,769 million to Residual
WAPDA Power wing from time to time for financing of various projects as well.
Long Term Loans amounting to Rs.49,196 million were outstanding as on June
30, 2009 as detailed below: Rs.4,766 million has been reported separately as
current maturity under current liabilities including Rs.4,605 million of FRL and
Rs.161 million of CDL Liabililty under Ijara Financing relates to WAPDA
Hydroelectric development projects and has been increased from Rs.8.0 billion
to Rs.16,000 million, the detail of which is as under:
Short term borrowings contains Rs.47,163 million outstanding short term bank
loans taken on behalf of DISCOs and Bridge Financing Loan. Government of
Pakistan has agreed to transfer the said loan to power holding company during
current financial year.
Short term liabilities Rs.35,476 million include pending Government of
Pakistan Debt Service Liability comprising Rs.20,506 million pertaining to
previous years and Rs.11,606 million pertaining to FY 2008-09, besides 4%
Return on Assets payable to Provinces and other liabilities accrued because of
payment default by NTDC / CPPA against power sale by WAPDA. Creditors
Accrued & other Liabilities of Rs.22,229 million mainly includes due to Corporate
Entities & other formations and Project Clearing accounts.

Mahmood-ul-Hassan Abbasi | The Islamia University Bahawalnagar Campus


105
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
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.

Mahmood-ul-Hassan Abbasi | The Islamia University Bahawalnagar Campus


106
MBA (E)
INTERNSHIP REPORT ON MEPCO
Marketing 2010
(WAPDA)
Mahmood-ul-Hassan Abbasi | The Islamia University Bahawalnagar Campus
107

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