Wapda Final Report

8/8/2019 Wapda Final Report

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1.0 Introduction

Pakistan Water and Power Development Authority (WAPDA) is an integrated utility in

Pakistan. WAPDA is responsible for the development of Hydel Power and Water Sector

Projects in Pakistan. WAPDA operates through- Power wing and Water wing, It is engaged in

the generation, transmission and distribution of power. In addition, it also manages irrigation,

water supply and drainage system in the country. Further, it is also responsible for prevention

of water logging and reclamation of waterlogged and saline lands. Its responsibilities also

include flood management and inland navigation. WAPDA was created as a Semi-

Autonomous Body in 1958. The company is headquartered in Lahore, Pakistan.

The Pakistan Water and Power Development Authority (WAPDA) was established through

an act of parliament in February 1958 for integrated and rapid development and maintenance

of water and power resources of the Country. This includes controlling soil salinity and water

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logging to rehabilitate the affected land in order to strengthen the predominantly agricultural

economy of the country. As per the charter, amended in March 1959 to transfer the existing

electricity departments from the federating units to it, WAPDA has been assigned the duties of

investigation, planning and execution of projects and schemes for:

Generation, Transmission and distribution of power,

Irrigation, water supply and drainage,

Prevention of water logging and reclamation of saline land,

Flood control and

Inland navigation.

Under the later on developments, vis--vis the Energy Policy 1994, setting up of thermal

power generation projects was shifted to the private sector. Similarly, as a result of

restructuring of the Power Wing, the utility part was corporatized into independent companies.

This shift from convergence to divergence gave birth to 13 entities to operate in different

zones. These are National Transmission and Dispatch Company (NTDC), four thermal power

generation companies (GENCOs) and eight distribution companies (DISCOs). The present

status of these companies is of corporate public limited entities under the Umbrella of EPCO,

ultimately to go privatized as planned. The residual Power Wing is therefore now responsible

for major hydro-electric power projects and schemes in operation.

1.2 Water Vision 2025

WAPDA has formulated a comprehensive $2533 billion National Water Resource and

Hydropower Development Program me, entitled Water Vision 2025. The Water Vision 2025

projects are expected to generate 16,000 MW of hydroelectricity. Other goals are to prevent

water shortages, limit drought and increase water storage for a growing population. FivePage | 2


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1.4 PROGRESS OF POWER WING IN CURRENT FINANCIAL YEAR

2009/2010

During the year, construction of 267.77 Km long transmission lines and 65 grid stations

(including extension, augmentation and replacement) was achieved).

1.5 GRID SYSTEM OPERATION

The GSO is maintaining as at present 634 grid stations and 31,929 km length of

transmission lines are presently to transmit about 57,157 GWH electricity annually, linking

various power- station to load centers through its four regions i.e. Lahore, Islamabad, Multan

and Hyderabad. These regions are availing technical expertise from Technical Services Group

(TSG) and System Protection. The Transformer Reclamation Workshop is also part of GSO

NUMBER OF GRID STATION

Number of GRID

STATION

Region KV

12 Lahore 500

10 Islamabad 220

68 Multan 132

135 Hyderabad 66

1.6 Wings of WAPDA

There are three main wings in WAPDA.

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Water Wing

Power Wing

Finance/coordination wing.

1.6.1 Water Wing

The organization was also entrusted with the work of implementing Indus Basin

Settlement Plan signed between India and Pakistan in 1960 to develop replacement works for

management of river water and irrigation system. Since then it has been engaged in building

water development projects which include extensive research and investigation to augment

country's water resources .

Member (Water) controls the water wing which is divided into North, Central, South

and Northern Areas zones. These zones cover, in general, North West Frontier Province

(NWFP), Punjab, Sindh and Balochistan and Northern Areas respectively. The activity of

water wing involves execution of surface and sub-surface water development and drainage-

Salinity Control and Reclamation Projects (SCARPs). Chief Engineers and Project Directors at

various levels are responsible for effective and timely implementation of Water Wing Projects.

1.6.2 Power Wing

Member (Power) controls the Power Wing, through General Managers and Chief

Engineers in the field of hydro-electric power, coordination and WAPDA Power Privatization

Organization. WAPDA has an elaborate setup headed by a General Manager for training of its

officers and officials at different levels covering all the wings of the organization.

1.6.3 Finance/ coordination wing

Member (Finance) is responsible for the functioning of the departments of Finance,

Internal Audit and Budget and Accounts headed by Chief Auditor (Internal Audit) and Director

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General Finance (B&C). He also exercises administrative control over General Manager

(Central Contracts Cell), Director General (Taxes) and Director Public Relations. Managing

Director (Admin) is vested with the responsibility for overall administration and services.

Secretary WAPDA in addition to looking after day-to-day affairs of the Secretariat, prepares

minutes of the Authoritys meetings, maintains records of its decisions and issues its directives

and coordinates among the three Wings besides monitoring and implementation of Authoritys

decisions.

1.7 Authority Fund

The Authority Fund consists of the following:

Loans and grants obtained from the federal and provincial governments

Sale proceeds of WAPDA Bonds

Loans obtained by the Authority with general sanctions of the government

Foreign aids and loans obtained from he IBRD, ADB and other international loan

giving agencies on such terms and conditions as may be approved by the government

Sale of power

All other sums received by the Authority

1.8 Major Functions Of WAPDA

Under the government set out in the License, the WAPDA is entrusted to act as:-

Central Power Purchasing Agency

System Operator

Transmission Network Operator

Contract Registrar and Power Exchange Administrator

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1.9 EMPLOYEES BENEFIT PROGRAMME

1.9.1 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.

1.9.2 Education

In order to promote and maintain education in various WAPDA colonies and projects,

WAPDA has set up 45 educational institutions which provide education not only to children of

employees stationed in the respective areas but also to the adjacent non- WAPDA population.

These institutions have performed exceedingly well with some remarkable results.

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1.9.3 Pension

WAPDA employees are entitled to full pension on reaching the age of superannuation

subject to completing their minimum required service. In financial year 2000-01, as many as

7,875 pension cases were processed involving payment of Rs. 2210.242 million.

1.9.4 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.

1.9.5 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

1.10 Thermal Power

As per Government of Pakistan policy all thermal power generation has been

restructured and four corporatized companies namely Jamshoro Power Generation Company

Limited (GENCO-1) head quarter at Jamshoro district Dadu near Hyderabad Sindh, Central

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Power Generation Company Limited (GENCO-2) head quarter at Guddu district Jacobabad

Sindh and Northern Power Generation Company Limited (GENCO-3) head quarters at

Muzaffargarh and Lakhra Power Generation Company Limited (GENCO-IV) at Khanote

(Sindh) have been formed and registered. Functioning of GENCOs has commenced.

Jamshoro Power Generation Company Limited GENCO - I

Central Power Generation Company Limited GENCO - II

Northern Power Generation Company Limited GENCO - III

Lakhra Power Generation Company Limited GENCO - IV

WAPDA's Thermal Power Generation is mainly based on generation of power from its

Steam Turbo-Generators, Gas Turbines (simple as well as Combined Cycle Units) installed at

different Power Stations located in Sindh, Punjab and Balochistan provinces. Indigenous Gas

& Coal is the main fuel whereas Furnace oil and HSD are also used as alternative fuel. The

total installed capacity is 4664 MW.

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Structural formation of all four GENCOs is as under

JPCL

(GENCO-1)

CPGCL

(GENCO-2)

NPGCL

(GENCO-3)

LPGCL

(GENCO-4)

TPS Jamshoro TPS Guddu TPS Muzaffargarh FBC Lakhra

GTPS Kotri TPS Quetta NGPS Multan -

- - GTPS Faisalabad -

- - GTPS Shahdara -

- - CGTM W/Shop

F/Abad

-

1.11 Pakistan Water and Power Development Authority Key Recent

Developments

Jun 29, 2010

Pakistan May Import 1,000MW Of Power From Iran.

Mar 31, 2010

Engro Energy Achieves Targeted Commercial Operations Date Of 217.3MW Qadirpur

project.

Mar 26, 2010

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OFID To Extend Loan Worth $31.10 Million For Neelum-Jhelum Hydropower Plant In

Pakistan.

Feb 15, 2010

WAPDA's Neelum-Jhelum Hydropower Project To Start Production By 2016.

Dec 26, 2009

WAPDA Invites Tenders For Supply Of Station Battery Set For Dargai Power Station.

1.12 WAPDAs ROLE AS DEVELOPMENT ENTITY

The primary development role of WAPDA has been revived. It is now focusing only on

Hydel Development and Water Sector Projects to support the national economy and poverty

alleviation through improved Hydel-Thermal mix of Power Generation, provision of electricity

at affordable price and most pertinently perspective planning and timely execution of Projects

to meet the Water and Power demand of the growing population, agriculture and industry of

the country.

1.13 Installed Capacity of WAPDA System (as of June 2007)

*Installed Capacity of WAPDA System

(as of June 2007)

Hydel 6444 MW

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GENCOs 4675 MW

IPPs 5772 MW (including 30 MW Hydel)

Nuclear IPP (Chashnup) 325 MW

Rental 150 MWTotal 17366 MW

2.0 CUSTOMER SERVICES

Respective distribution companies under PEPCO are responsible to deal with all

matters of their electricity consumers as per their procedures.

LAHORE ELECTRIC SUPPLY COMPANY LIMITED (LESCO)

GUJRANWALA ELECTRIC POWER COMPANY (GEPCO)

FAISALABAD ELECTRIC SUPPLY COMPANY (FESCO)

ISLAMABAD ELECTRIC SUPPLY COMPANY (IESCO)

MULTAN ELECTRIC POWER COMPANY (MEPCO)

2.1 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.

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2.1.1 LAHORE ELECTRIC SUPPLY COMPANY LIMITED (LESCO)

LESCO

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.

Lahore Area Electricity Board was reorganized into one such corporatized entity under the

name of Lahore Electric Supply Company (LESCO) with effect from 22-03-1998, with the aim

of commercialization and eventually privatization.

2.1.2 Area of Operation

LESCO's area of responsibility covers Civil Districts of Lahore, Kasur, Okara and

Sheikhupura.

2.1.3 Gujranwala Electric Power Company (GEPCO)

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 Gjranwala, 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 2,461,729 connections,

Average monthly collection for the year 2009-10 is approximately 3961 million Rupees.

2.1.4 FAISALABAD ELECTRIC SUPPLY COMPANY (FESCO)

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FESCO Distributes and supplies electricity to about 2.88 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.

2.1.5 ISLAMABAD ECTRIC SUPPLY COMPANY (IESCO)

Area Electricity Board (AEB) Islamabad was one of the eight AEB's constituted

through amendments in WAPDA Act during 1981. Later Government of Pakistan approved

revamping of WAPDA power sector, resultantly twelve corporate entities were formed. Eight

Distribution and Supply Companies (DISCOs), one National Transmission and Distribution

Company (NTDC) and three Generation Companies (GENCOs). All these companies have

been incorporated under Companies Ordinance 1984.

2.1.6 MULTAN ELECTRIC POWER COMPANY (MEPCO)

MEPCO the Multan Electric Power Company is one of the biggest Distribution

Company of WAPDA. It's 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.

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MEPCO is putting efforts to make it a viable and progressive utility to take care of

consumer's power demand.

2.2 Central Power Purchasing Agency (CPPA)

As the Central Power Purchasing Agency (CPPA), for procurement of power from

GENCOs, Hydel & IPPs on behalf of Distribution Companies (DISCOS), for delivery through

500 kV, 220 kV & 132kV Network.

2.2.1 System Operator

For secure, safe and reliable operation, control and generation facilities.

2.2.2 Transmission Network Operator

For Operation & Maintenance, Planning, Design and expansion of the 500 kV and 220

KV.

2.2.3 Contract Registrar And Power Exchange Administrator (CRPEA)

As CRPEA, to record and monitor contracts relating to bilateral trading system.

2.3 Energy Resources & Power Development History

At the time of independence, Pakistan inherited 60MW of power generation capability

for a population of 31.5 million, yielding 4.5 units per capita consumption. Twelve years later,

when WAPDA was created in 1959, the generation capacity had increased to 119 MW. By that

time country had entered the phase of development, which required a dependable and sold

infrastructure, electricity being its most significant part. The task of power dev elopement was

undertaken by WAPDA for executing a number of Hydel and thermal generation projects, a

matching transmission network and a distribution system, which could sustain the load of

rapidly increasing demand of electricity.

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The effects of WAPDAs professional approach to find the solution to multifarious

problems did not take long to show. After first five years of its operation by 1964-65, the

electricity generation capability rose to 636 MW from 119 in 1959, and power generation to

about 2,500 MKWH from 781 MKWH. Number of consumers in 1959 to 688 thousand in

1965, as many as 609 villages had electricity supplied to them by 1959, increasing to 1882 in

1965. The rapid progress witnessed a new life to the social, technical and economic structures

of the country, mechanized agriculture started, industrialization picked up and general living

standards improved. In the year 1980 the system capacity touched 3000 MW which rapidly

rose to over 7000 MW in 1990-91.

Now the total generation capacity from WAPDAs own hydel and thermal sources after

completion of Chashma Hydro Power Plant plus generation from independent power

procedures stands at 15764 MW.

2.4 Power Sector Reforms & History Of NTDC

Over the past 15 years, Pakistan has been following a strategy of deregulation,

privatization and transformation of its public sector entities (PSEs), including its two major

power utilities, Water and Power Development Authority (WAPDA) and Karachi Electric

Supply Corporation (KESC). WAPDA was established in 1958 as a semi-autonomous agency

to coordinate the development of Pakistan's water and power resources.

NTDC previously was the part of Water and Power Development Authority (WAPDA).

It was known as Transmission and Grid Station. In December 1998, the WAPDA Act was

amended, which allowed the creation of Pakistan Electric Power Company (PEPCO), and

unbundling of WAPDAs Power Wing into:

eight (9) distribution companies (formed from existing area boards);

three (4) generating companies (comprising 11 of WAPDAs generating plants); and

National Transmission and Dispatch Company (NTDC).

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2.5 Formation of PEPCO

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

of Pakistan vested with the following corporate objectives

The corporatization and commercialization of WAPDAs assets block in generation,

transmission and distribution.

Overseeing the design and implementation of the Manpower Transition

Program stewardship of early business operations by the newly formed companies

Privatization initiative

2.6 Formation of NEPRA

National Electric Power Regulatory Authority (NEPRA) was created to regulate the

unbundled Power Sector in order to promote competitive power market to ensure reliable

power supply at affordable rates to millions of electricity customers in Pakistan. Major

responsibilities of NEPRA include:

Issuance of licenses to the power utilities.

Tariff determinations in a transparent manner.

Establishment of performance standards for the utilities.

2.7 CHARTER OF DUTIES IN WAPDA

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The charter of duties of WAPDA includes investigation, planning, and execution, of

schemes in the following fields.

Generation, transmission and distribution of power.

Irrigation, water supply and drainage.

Prevention of water logging and reclamation of water logged and Salind land.

Flood control and inland navigation.

Inland navigation.

2.8 Follow Sind-Tass Agreement

The organization was also entrusted with the work of implementing Indus Basin

Settlement plan signed between India and Pakistan in 1960 to develop replacement works for

management of river water and irrigation system. The life saving action for Pakistans

agriculture has been WAPDAs role in the field of water logging and salinity. During past four

decades WAPDA has planned and executed 60 scraps at a total cost of Rs.37.8 billion to cover

an area of 19 million acres of affected land for putting it back into production.

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2.9 Division of WAPDA

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WAPDA

RESIDUALWAPDA PEPCO

GENCOS NTDC DISCOS

GENCO-1(Kotri)

GENCO-3

1. WAT DAMS2. HYDL PWR


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WAPDA

RESIDUALWAPDA

PEPCO

GENCOS NTDC DISCOS

GENCO-1(Kotri)

GENCO-3(Muz. Gh.) 1. IESCO

2. GESCO

3. LESCO

4. MESCO

5. HESCO

6. FESCO

7. QESCO

8. PESCO

9. TESCO

GENCO-2(Guddu)

GENCO-3(Muzafargarh)

1. WAT DAMS2. HYDL PWR

GENCO-4(Lakhra)


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NTDC is only one of the above companies, which is connected with all the companies.

Its major operations are based on the purchasing of electricity from generation companies and

selling it to distribution companies.

The other functions of NTDC are performed to handle high voltage electricity wires in

preinstalled electrified areas and those areas to which Discos want to electrify. So we should

have knowledge about all stakeholders which are generating and distributing electricity in

Pakistan like what are their major functions, projects, and their locations in order to make

budgets through which NTDC will earn revenue in future.

2.10 Major Stakeholders Of WAPDA

Now we discuss all the companies which are the major stakeholders of WAPDA.

These are:

Power / Electricity Generation Cos.

Power / Electricity Distribution Cos.

2.11 Major Sources For Generation Of Power / Electricity Are

HYDEL Power (Controlled by Residual WAPDA)

Thermal Power (Controlled by PEPCO)

IPPS (Independent Power Projects) Controlled by PEPCO

Rental Power Projects (Controlled by PEPCO)

2.12 WAPDA Residual Projects & Functions

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2.12.1 Water Dam

To Constructing ,repairing & maintaining of dams is the major function of WAPDA.

2.12.2 Hydel Power Generation

As a consequence of partition of the Indo-Pakistan Sub-Continent in 1947, India and

Pakistan became two independent sovereign states. Hydel generation capacity of only 10.7

MW (9.6 MW - Malakand Power Station & 1.1 MW - Renala Power Station) existed in the

territory of Pakistan. With the passage of time, new Hydel Power Projects of Small and

Medium capacities were commissioned including the first water storage dam and power house

at Warsak due to which country's Hydel capability raised to about 267 MW uptill 1963.

The Irrigation System which existed at the time of partition in 1947 was divided

between the two countries without any regards to the irrigation boundaries which resulted in an

international water dispute which was finally resolved by signing of the Indus Water Treaty in

1960 under the aegis of World Bank. The Treaty assigned three Eastern rivers (Ravi, Beas and

Sutlej) to India and three Western rivers (Indus, Jhelum & Chenab) to Pakistan. It also

provided construction of replacement works called Indus Basin Projects (IBP) to compensate

for perpetual loss of Eastern rivers' water. The works proposed under the Treaty included two

multipurpose dams i.e. Mangla Dam on Jhelum river and Tarbela Dam on Indus river having

the provision of power generation. These were commissioned in 1967 & 1977 respectively.

However, their capacities were subsequently extended in different phases .

WAPDA RESOURCES

3.1 Dames

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There are many dams under WAPDA control. Some important names of these dams are

given below.

3.1.1 Tarbilla Dam

3.1.2Cashma Power Plant

3.1.3 Mangla Dam

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3.1.4 Warsak Dam

3.2 Hydel Generation Capacity

The total capacity of 13 No., Hydel Stations as of today is 6443.56 ~ 6444 MW which

is 37.10% of total installed generation capacity of WAPDA. During 2007~2008, aggregate

energy sharing during the year was 33.32%. The Hydel Generation Capacity was reduced from

6463.16 MW to 6443.56 MW due to decommissioning of Jabban Hydel Power Station after a

fire incident in November, 2006.

3.2.1 Seasonal Variations Of Hydel Generation

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Sindh and Northern Power Generation Company Limited (GENCO-3) head quarters at

Muzaffargarh and Lakhra Power Generation Company Limited (GENCO-IV) at Khanote

(Sindh) have been formed and registered. Functioning of GENCOs has commenced.

(GENCO-I) Jamshoro Power Generation Company Limited.

(GENCO-II) Central Power Generation Company Limited.

(GENCO-III) Northern Power Generation Company Limited.

(GENCO-IV) Lakhra Power Generation Company Limited.

WAPDA's Thermal Power Generation is mainly based on generation of power from its Steam

Turbo-Generators, Gas Turbines (simple as well as Combined Cycle Units) installed at

different Power Stations located in Sindh, Punjab and Balochistan provinces. Indigenous Gas

& Coal is the main fuel whereas Furnace oil and HSD are also used as alternative fuel. The

total installed capacity is 4664 MW.

Structural formation of all four GENCOs is as under:

3.5 IPPS (Independent Power Producers) Controlled By PEPCO

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The country had been experiencing severe power shortage during eighties and early

nineties. As a result, load shedding had to be resorted to all over the country. This adversely

affected the national economy. It was not possible for the Govt. to establish Power Plants in

public sector due to shortage of funds. In order to eliminate power shortage/load shedding in

the minimum possible time, the Government constituted an Energy Task Force in 1993 to

devise a consolidated and comprehensive policy for revamping and rejuvenating the energy

sector. On the recommendations of the Energy Task Force, the Government announced a

Policy Framework and Package of Incentives for Private Sector Power Generation Projects

in March 1994 for a large scale induction of the private sector in power development. The said

Policy offered a fix level zed tariff of US$ 5.57 / kWh to the prospective investors (US$ 6.1 /

kWh average for 1-10 years) and a number of other incentives to attract foreign investment in

the power sector.

3.5.1 IPP Installed Capacity

In 1994, the government formulated a power policy that allows the private sector

to invest in the power sector to ensure sufficient generation capacity. The policy also

allowed full flexibility to independent power producers (IPPs) to bring capacity on line as

quickly as possible at predetermined power purchase prices. The government guaranteed

implementation, fuel supply, and power purchase. (By 2001, the private sectors share of

installed capacity reached 5,551MW, all of which were oil-fired thermal plants.)

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1292 MW (Net 1200 MW) HUB Power Project the biggest power plant in the private

sector contracted in 1992 started commercial operations in March 1997. Shortly after

commissioning disputes arose between GOP / WAPDA and HUBCO on tariff and other issues.

After protracted negotiations, these were resolved through Settlement Agreement of December

2000 signed by the GOP, WAPDA and HUBCO.

This resulted in a lower tariff entailing a saving of about 3 billion dollars over 30 years

term of the Power Purchase Agreement. WAPDA also privatized its 1638 MW (Net 1342

MW) Gas Turbine Power Station, Kot Addu in June 1996 by incorporating it under the name

of KAPCO and selling its 36% shares to International Power of UK. After extensive

correspondence/negotiations with the International Power, the Power Purchase Agreement and

other relevant documents have been amended, providing inter-alia, reduction in tariff from

Cents 5.60 / kWh to Cents 5.04 / kWh, resulting in a saving of about 1.3 billion dollars to

WAPDA over 25 years term of the Agreement.

3.5.2

Rental Power Projects

During the Government of PM Shaukat Aziz (2006), ECC in its decision of 16th

August, 2006 approved 150 MW Rental Power Plants proposal by WAPDA / NPGCL for

installation at Piranghaib, Multan as emergency measure subject to acceptance of tariff by

NEPRA, stipulating that WAPDA should only rent as much power as is absolutely necessary

to be utilized with high load factor for economic utilization of capacity. The ECC was briefed

by then government that given the urgency to have additional power capacity before next

summer as per WAPDAs demand projections and the long gestation period for new plant,

renting of plant/plants appears to be the only short term solution if shortfalls are to be met.

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Further, as the commissioning of the new IPPs for which gas has already been allocated

will take 2-3 years, practical arrangements may be worked out with the Ministry of Petroleum

and Natural Resources to utilize this gas for the rented plants in the intervening period. The

then Planning and Development Division concurred with the proposal of M/o Water and Power

to keep the momentum of economic growth progressive, and also to meet the high anticipated

power shortages in the country.

During the Caretaker Government of PM Mian Muhammad Sommro (15.02.2008), the

ECC approved four Rental Power Plants each of 200-300 MW (combined capacity 1000-

1200MW) as Rental Power Plants in private sector to be located at Sahiwal, Gakhar,

Kotlakhpath, Sialkot, Shikarpur, Jamshoro, Eminabad & Sheikupura. The ECC advised that the

RPPs be arranged for a period of four years, PEPCO would reevaluate RPPs location sites on

the basis of oil storage space plus transportation and environmental impact. Secretaries Finance

and Water & Power along with MD-PPRA will review the procurement mechanism and avoid

delay in induction of RPPs while making it PPRA- compliant.

3.6 Power Policy

3.6.1 Power Policy 1995

3.6.2 General

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The Government of Pakistan in March 1994 announced the Policy Framework and

Package of Incentives for private sector power development in the country. It received a

tremendous response albeit for all Thermal Plants. GOP now intends to encourage proposals

for power generation based on indigenous resources namely its hydel resources. Hydel power

being cheaper, will provide tariff relief to the consumers, utilize indigenous resources, involve

Pakistani entrepreneurs and provide benefits of economic growth to the relatively backward

parts of Pakistan.

3.6.3 The Need For A Separate Hydel Power Policy

In Pakistan nearly all hydro potential results from discharges into the Indus River basin.

Discharges result primarily from precipitation and snow-melt in the northern mountainous

ranges of the country. Discharges take place in small rivulets coming further down to the

bigger tributaries of River Indus and then to Indus River itself. The development of

hydropower projects however, is characterized by remote locations and seasonal variations.

Pakistan's climatic factors including rainfall and snowmelt, make it relatively easy to develop

hydel generation during the months of July to December while the period January to June is

extremely dry in terms of stream flow. In order, therefore, to arrest the risk of over

development in summer months that would create an unbridgeable gap in winter months, the

total requirement of hydel plants in private sector may be limited to 2,000 MW upto the end of

the 9th Five Year Plan. However, the limit of 2,000 MW will be reviewed at a later stage and

can be enhanced to suit the national priorities and power demand growth. Realizing that these

peculiarities of hydropower development necessitate special consideration the Government has

devised an attractive policy package to evoke response of private sector similar to that of

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thermal power. The salient features of the policy framework and package of incentives devised

for development of hydropower through private sector.

3.7 Power Policy 2002

3.7.1 Introduction

Electricity constitutes one of the most important components of infrastructure and plays

a key role in national growth and development. With only about half of nearly 140.5 million

people (2001 population estimate) having access to electricity, a huge population base provides

an ideal opportunity for expansion of electricity generation. The growing pace of urbanization

and industrialization also puts a premium on demand for electricity.

Demands for augmenting the power infrastructure, unsatisfactory performance of

public sector entities, ever-squeezing budgets in the public sector, the need to make the tariff

free from subsidies and cross-subsidies and reflect market prices etc., provide motivation for

resource mobilization, improving efficiency through involvement of the private sector, to

reduce the burden on budgetary resources caused by ailing enterprises and more importantly, to

meet consumer expectations within affordable limits of tariff.

Reform of the power sector through restructuring and deregulation is high on the

agenda of the Government of Pakistan (GOP). The GOP is committed to pursue a far-reaching

reform program me for the power sector and to help meet the country's future power needs.

Implementation of the envisaged program me will bring about a gradual transition of the power

system from integrated, state-owned utilities to a decentralized system with separate

generation, transmission and distribution entities, having substantial private ownership and

management, reflecting and encouraging a commercial and competitive operating

environment.

3.7.2 Objectives

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The main objectives of the Policy are:

To encourage and ensure exploitation of indigenous resources,

which include renewable energy resources, human resources,

participation of local engineering and manufacturing capabilities;

To provide sufficient capacity for power generation at the least

cost, and to avoid capacity shortfalls;

To be attuned to safeguarding the environment.

To ensure that all stakeholders are looked after in the process, i.e. a win-win situation

for all; and

3.7.3 Scope

The scope of the Policy covers.

Projects developed by the public sector and then divested.

Public-private partnership projects; and

Private sector projects;

Public sector projects;

3.8 2009 Policy Framework For New - Captive Power Producers

To lessen the gravity of power shortage in the country it was decided by

WAPDA/PEPCO to acquire surplus and redundant Captive Power from APTMA members as

one of the supply side measures. This Captive Power was mostly oil based. Subsequently,

Sugar Industry also made a similar offer for sale of surplus (biogases based) Captive Power. So

far about 182 MW produced by different CPPs on different fuels could be fed to DISCOs on

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take-and-pay-basis at tariffs approved by WAPDA Authority/PEPCO under the guidelines of

NEPRA. Up till now APTMA remains the main contributor.

3.8.1 NTDC Development Programs

3.8.2 Current Projects

Addition of new transmission lines and sub stations is an integral part of NTDC

program for strengthening/augmentation and expansion of the existing integrated system in

order to meet the power transmission requirements efficiently & effectively and for dispersal

of power from generating plants to the load centers.

To cater for the above, a number of schemes have been taken in hand. A list of the

ongoing projects is given in the tables below.

Approved PC-I cost at US$1=Rs. 30.83

3.9 Finance department

Finance department plays vital role in every organization we can say that its a back

born of every organization. Without it nobody can start the operations of any type of the

business. WAPDA is generating revenue through producing electricity from Dams selling to

Discos. I have served a week in finance department and learned a lot of things. Mr. Naseem

has guided me for finance department working.

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3.9.1 Hierarchy of Finance Department

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FinanceDirector

(NTDC)

Manager Finance


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3.9.2 Manpower in Finance department

3.9.2.1 Finance Director Staff (Head Office) Summary:

F.D (NTDC) 01

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Finance

Director(NTDC)

Manager Finance

Corp: A/cs

Mgr Fin. (CPC)

D M

(B & A) F & TA

D.M

Corp: A/cs-I

D.MCorp: A/cs-II

D.MCorp: A/cs-III

Asstt.Manager

Corp:A/cs (IOT)

Asstt.Manager

Corp:A/cs

(Admin)

Asstt. Manager Corp:

A/cs (Compilation)

Pension Cell

Asstt.Manager

Corp:A /cs (GAD)

Asstt.Manager

Corp :A/cs (Estt)


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Manager Finance (C.A) 01

Manager Finance (CPC) 01

Deputy Manager (B & A) / F & TA 01

Deputy Manager 03

Assistant Manager 08

Account Officer 16

B. Examiner 01

Steno G-I 01

Steno G-II 02

Account Assistant 23

Cashier 10

Junior Clerk 10

Driver 04

Naib Qasid 06

Daftri 01

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

Total 80

3.9.3 Different sections of Finance Department

3.9.3.1 Budget

Each department of NTDC makes its budget that how much their expenses may occur

during next year. They make their budget through previous year estimated budget and actually

expenses occurred. Each department sends the budgeted expenses requirements to the financePage | 36


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director office in budget section. Budget section does consolidate all the budgets and make

comparison in one sheet in order to get approval of the budget for all the departments from

higher authorities. Normally the final approval of budget is given less than the amount which is

mentioned in the budget requirement.

Whenever any office informs that more funds are required during a financial year then

solid reason has to given. That request again passes through all formal way to get budget

approval from the higher authorities. This section not only consolidates all the budgets of each

department but also makes the budget of its own department (Finance Director Office).

3.9.3.2 Admin

Admin section exists almost in all departments of the company. This section deals with

all the matters related Human resource like attendance record, salaries, promotion cases

forward to concern persons, maintaining stationary requirements and all the admin work.

3.9.3.3 Banking & Imprest

This section helps to release the funds. Whenever budget approved, copy of budgets

sent to concern departments, offices. Afterwards any office may request to release the funds

which are approved from the higher authorities to Banking & Imprest section. This section

counter check the funds approval and limit then send request to top management.

When request is recommended this section sends request to Manger Finance (treasury)

Nepir Road Lahore. This person currently doing work under PEPCO and manages all the funds

which receive from all the companies which are divided by WAPDA.

3.9.3.4 Inter Office Transactions

Whenever material moves among the departments, then cash is not given and

transaction is recorded internally. This section is responsible to record IOT. After a week or a

month ledgers of internal offices are reconciled.

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3.9.3.5 Payment / Establishment Section

This section is responsible to pay the cash. Firstly all bills are checked and verified.

Then limits are checked of that person who claimed the amount by this section. Afterwards

expense is recorded by both way computerized and manually. Then voucher is sent to cashier

who pays the bill by issuing the cheque. Almost all payments are made by bank cheque.

3.9.3.6 Book Keeping

This section is responsible to maintain all the records of accounts files. There are three

types of voucher files.

It includes as under:

Bank Payment Voucher Files

Bank Receipt Voucher Files

Journal Voucher

3.9.3.7 Process of approval and payment for a budget of offices

Firstly budget makes and approves by concerned department chief, then sends to

budget department of finance. Budget department consolidates all the budgets and make

comparison with previous year and make one sheet budget of all departments of NTDC.

Budget checked by Finance Director and Approved by Board of Directors. Then fund demand

request is sent to Banking and Imprest Section to release the funds. The request is flowed from

top to bottom and after implementation bottom to top.

3.9.3.8 Letter of Credit

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This section is deals all matters of import and export of equipment of electricity

transmission.

3.9.3.9 Pension Cell

This section is very important for the every permanent employee after his retirement.

However this section deals with all the employees of NTDC but working under the Director

Finance.

3.9.3.10 G.A.T

This section deals with the issuance, control of employees salary slips, incentives, and

allowances.

3.9.3.11 G.S.T

This section deals with the deduction of taxes from the salaries of employees and other

tax payable equipments.

3.9.3.12 Consolidation

This section basically collects the accounting record from all sections, consolidate them

and make consolidated final account of NTDC.

3.10 FINANCIAL OVERVIEW OF WAPDA

FINANCIAL RESULTS DURING 2008-2009

FINANCIAL OVERVIEW OF WAPDA

FINANCIAL RESULTS DURING 2008-2009

Revenue (Rs. in Million)

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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 (inch 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)

Tangible Fixed Assets 39,704.222

Long Term Advances / deposits 23.281

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Current Assts 26,123.094

Total Assets 65,850.597

Equities & Liabilities (Rs. in Million)

Share Capital & Reserves 4,779.078

Long Term liabilities 16,220.889

Current Liabilities 44,850.630

Total Expenses 65,850.597

COORDINATION

4.1 Coordination

The head of this department is Muhammad Adeeb (Deputy Director Account). 27 employees

are working in this department. This department maintain the record of all the subordinate

offices, maintain their account and prepare financial statements and also make investments of

the funds of this department. The main function of book keeping department includes

4.1.1 Book Keeping

Book keeping section maintains the record of the entire department, make financial statements

and also compile their records. Following is the procedure of book keeping:

Cash Book Entries

i. Imprest cash book

ii. Collection cash book

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General Ledger

Subsidiary Ledger

Trial Balance

Statement of Profit and Loss

All the accounts are prepares manually but only Trial balance is prepares with the help of

computer software.

4.1.2 Investment

The budgeted and consolidation department usually invest in the banking sector and they

invest for short or long period of time.

4.2 Budgeting Department

This department prepares, compile, approve and estimate the budget of all the department of

WAPDA. Assistant Director Muhammad Ahmed Qureshi who is responsible for the working

this department and he checks and approve the budgets. All the budgets are prepared by

Account and budgeting officer Muhammad Inam. Here below is the Performa of budget.

4.2.1 Type of Budget

There are three types of budgets:

Estimated Budget

Purposed Budget

Revised/Final Budget

4.2.2 Preparation of Budget

Purposed budget is prepares in the concerned department and compile in the budgeting

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4.2.3 Who Approves the Budget?

When a department sends its purposed budget to the budgeting department then this

department after discussion approves this budget and budget is approve by Deputy Director B

& C and then sends it to the D.G Finance B & C.

4.3 BUDGET AND CONSOLIDATION

4.3.1 Introduction of B&C Department

Budget and consolidation department plays very important role in WAPDA. Pakistan

water and power development authority is an autonomous government body created by the

virtue of water and power development authority act 1958 .its statutory mandate is to utilize

water and power resources of the country on the a undefined and multipurpose basis .WAPDA

was empowered , among other to frame scheme for the generation of hydel and thermal power,

transmission and distribution of power and construction ,maintenance and operation of power

houses and WAPDA has been divided into three major entities for according and financing

purpose via power, water and co-ordination wings power wing activities except hydel

power have now been transferred to PEPCO.

The matter relating to the budget and accounts of the coordinating wing are handled by

director general finance (B&C) WAPDA, Lahore who report to the authority through member

finance WAPDA. He has three directors under him namely director, finance (admin &

regulation), director finance (budget consolidation) and director accounts (funds).

4.3.2 Jobs Perform By Budget and Consolidation Department

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The director finance (budget & consolidation) is responsible to the director general

finance (B&C) WAPDA, Lahore. He is assisted by 3 officers in BPS-18, 5 officers in BPS-17,

7 officers in BPS-16 and 60 non gazette employees as per attached organization chart.

Following jobs and being performed in the directorate.

Dealing with the audit report/advances/draft paras pertaining to the common services

offices (annexure A&B)

Consolidation of accounts of the offices/organization of the coordinating (common

services) wing of WAPDA.

The pre-audit and payment in respect of claim relating to the common services offices.

Consolidation of accounts of the offices/organization of the coordinating Issuing of

funds to the common services offices(annexure)

Investment of the surplus funds of WAPDA with different banks/financial institution

with the approval of the competent authority

The maintenance of the receivable /payable accounts with power wing, water wing and

the corporative entities under PEPCO and reconciliation of sub accounts with these

quarters.

The director finance (B&C) WAPDA works as member of WAPDA welfare fund.

Maintaince of the accounts of employees medical benevolent fund.

Maintenance of authorities bank accounts and reconciliation with the banks

. Preparation /process of cases regarding grants of the long term advances and

earmarking of funds for employees of coordinating wing of the WAPDA.

Process of the cases of the purchase of the physical assets received from different

offices by the scrutiny committee constituted under economy measures.

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Scrutiny/process of (a) revised budget estimates and budget estimate (b) cases of the

additional budget grants and (c) re-appropriation of budget grants in respect of the

accounting units of the coordinating. Wing, WAPDA hospital dispensaries under D.G

(medical services) WAPDA Lahore and other directorates roe which payment is being

made centrally (annexure A)

Administration of employees of finance cadre from BPS 1 to 15.

4.3.3 Departments under Budget and Consolidation, we have visited:

Insurance

Funds (Budgeting)

Pension

Coordination (Book keeping)

4.3.4 Expenditure of the Coordinating:

Expenditure of the coordinating wing is met with from share (authority overhead)

provided by power and water wing@ 1.0% and 0.8% of the budget of the concerned wing

respectively. The size of the budget of the coordinating wing for year 2009-10 is Rs 982.407

million.

4.3.5 Capacity of the Budget Grant of the WAPDA Hospital

The capacity of the budget grants of the WAPDA hospital/dispensaries under (medical

services) WAPDA is Rs 1010.53 million. The expenditure of WAPDA medical directorate is

met with from amount provided by three wings of WAPDA and the corporative entities of the

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PEPCO on the basis of the number of the employees (serves/retired) of the respective

wing/entity receiving medical from these hospital/dispensaries.

4.3.6 Offices on the Payment Roll of the Director General Finance (B&C)

Authority {G.M (Admin), Director General (S&GA), Director (S&E), Secretary,

WAPDA And Director (Legal)}

Admin &Coordinating

Director(O&M)

Director General Finance (B&C)

Director General WAPDA Audit

Director ( Stationary Store)

Director (Security)

Law Division

Director (Pension)

General Manager; Central Contract Cell

Secretary, WAPDA Welfare Fund.

Director (Rules)

Telephone Exchange

Director General(Insurance)

WAPDA Lodges/Hostels

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Director Accounts (Funds)

Director Education

Director Intelligence

2.6.19 General Manager (M&S) WAPDA

4.4 Offices under Financial Control of the General Finance (B&C)

Sr. # Name Of The Organization Code

1 Director General Finance (B&C) HOC

2 Director General, Medical Services, WAPDA Complex Lahore WMS

3 Transport Directorate, Sunny View, Lahore TPT

4 WAPDA Printing Press Sunny View, Lahore WPP

5 Central Stores Stationary Sunny View Lahore WSS

6 Chief Auditors WAPDA Al-Jannat Building, Bank Square Lahore CAR

7 Public Relation Division, G26 WAPDA House Lahore DPR

8 Building Circle, 334-WAPDA House Lahore BCD

9 XEN Building Division Hyderabad WBH

10 XEN Building Division, Peshawar WBP

CHAPTER 5

HYDEL Department

5.1 Hydel

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This department plays back born role in WAPDA. Through it WAPDA produce more

than 5100 MW electricity at cheap cost because electricity produce through HYDEL and

HYDEL means generate or creating power through flow of water than moving turbines

because of this power generate. The HYDEL generation is 98% under the WAPDA from

HYDEL development projects. The electricity which produce through HYDEL is very low

cost just less than RS 70.

5.2 Functions of hydel:

HYDEL department is performs many function but some Following are the main

function performs by the hydel development head office situated in Gardee Trust Building

Napier road Lahore.

5.2.1 Budget Section

Assistant Director Mjahid Hussain is the head of this section. The main responsibilities of

this section include:

Prepare the estimated budget

Compile the budget

Approved or make queries the budget of a sub office

Note: Budget prepares at site and compile in this department.

This section approve loan for the construction of new dams, for repair and maintained

of hydel power stations, for purchase of machinery, stationery and traveling expenses of the

hydel offices. This section compares the new budget with the estimated budget and then

approved and sends this budget to the G.M Finance office for the approval a payment of fund.

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5.2.2 Inter Office Transaction (IOT) Section

Assistant account officer Tahir Abbass Khan is supervising this section. IOT section is

responsible for the transaction between sub offices of the hydel development. Debit/Credit

invoices and Super scrap cheque are used for inter office transaction. The balances are

quarterly reconciled and cash section of the IOT is transfer and received funds to the sub

ordinate offices.

5.2.3 Compilation Section

The budget and account officer Waqas Ahmed is controlling all the working of

compilation section. This section compiles the data and accounts of sub offices, check their

balance sheet, cash statements and other financial record. For this purpose they are using

software named as ERP (Enterprise Recourse Planning).

5.2.4 Imprest, Establishment and Account Section

There are two sub sections of this section

Establishment

This section pass all those expenses which are needed by the admin section for the operation,

check all the payment voucher and assign a token number to these vouchers. The budget and

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account officer can pass any amount for recurring expenses but for the non recurring expenses

he can approved only up to Rs. 50000.

Banking and Imprest

This section deals in the Imprest expenses of:

head office (Hydel Development)

20 lower foundations offices.

Being head office it provides the funds to the above mention offices. Imprest limit for the

recurring expenses is depends upon their budget and monthly expenses. At least 3 months

expenses should consider knowing the imprest limit. Following are the main recurring

expenses of offices under hydel development:

Salary

Utility Bills

Traveling and Accommodation etc.

There are three main types of account using this office are:

Main Imprest account

Imprest account

Collection

Amount from main imprest account can only transfer through authority letter form the imprest

account the amount can be transfer through the bank cheque and for collection cheque there is

no advice and no cheque is use the amount transfer directly to the head offices account.

5.2.5 Admin Section

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Admin department play vital role in WAPDA. Because it joint all department of

WAPDA with each another. The admin department controls the working of the overall

department, assign their duties, and arrange training programs for employees inside the office

or for the employees in the sub offices. There are 1600 employees working under this

department.

5.3 Share and capacity of hydel throughout total generation

Before 10 years generation is 70% from HYDEL and 30% from thermal but now the

30% from HYDEL and 70% from thermal. So the cost is very high because of more thermal

generation. The capacity of HYDEL production is 27000 million units to 30000 million killo

watts (MKH) but still the total requirement is 90000 mkh.

5.4.1 Sources of generation

HYDEL generation is getting from fallow of water in dams such as

Terballa dam

Varsac dam

Mangla dam

Other small dams

5.4.2 WAPDA thermal

Four generation companies which are categories as company one, company two,

company three and company four. For example the generation company at Jamshoro.

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5.4.3 Fuel wise generation

Fuel wise generation provide electricity according to the following ways.

Use Furness oil or residue Furness oil(RFO)

Use of gas

Use of high speed diesel(HSD)

Use of coal.

5.4.4 Cost of thermal generation

The cost of thermal generation is very high according to the HYDEL generation. The

cost of thermal generation of electricity is rupees 300000 million annually .

5.4.5 Independent power producers (IPP)

These are private companies generate the electricity and make the contract with

WAPDA and provide the electricity to WAPDA according to the decided rates.

5.4.6 Sharing the capacity

The generation companies is provide 35000 million units and from GENCOS 17000

million units.

5.4.7 Not exact prices of all generation companies

All IPP charge different rates . there in no similarity in rate among IPP.

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5.4.8 By pass of merit order

This contract make through NATIONAL POWER CONTROL ORDER. A rate which

different companies offer and WAPDA make the contract according to rate and prices from the

suitable companies. Fro example the requirement of power in Lahore but cost rupees 6.50 per

unit which can get from the nearest place of the Lahore or from Karachi is rupees 5 per unit of

the cost but with conveyance cost is rupees 7 per unit. The suitable is first one because is its

price rupees 6.5 per unit and order is take place from this company by WAPDA.

5.4.9 Purpose of bypass of merit order

According to the bypass of merit order observing the demand and order for generation

companies

5.4.10 Cost break up

Fixed cost paid even units is closed. Fixed cost always charge on capacity. According

the WAPDA consider the total cost plus development cost.

5.4.11 Making the cost break up

In costing and planning department discuss and calculate the components of costs

which are included both fixed cost and variable cost through the ENERGY PURCHASE

PRICE and CAPACITY PURCHASE PRICE. Energy purchase price or EPP showing the

variable cost and Capacity purchase price or CPP included on fixed cost. The variable cost

showing the costs of fuel, gas, and other variable costs but the fixed costs are normally

included on operating and maintenance costs.

5.4.12 Energy purchase price (EPP)

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In which discuss the total variable cost which normally consists fuel cost plus VOM.

Variable operating maintenance cost (|VOM)

Consumption of gas and fuel :

Consumption of gas and fuel in terms of rupees.

5.4.13 Admin cost

In admin cost included the salaries, wages, and other operating costs.

5.4.14 Capacity purchase prices (CPP)

CPP is covering the fixed cost of the departments and on the projects.

5.4.15 Esclateable

According to CPP in this department discuss and calculate the fixed operating and

maintenance cost and secondly discuss the returns.

5.4.16 Debit service liability (DSL)

In which discuss the principle amount and interest, secondly some units of generations

electricity seasonally and the fixed cost bear throughout the year.

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5.4.17 Contract from IPP

IPP provide electricity to the WAPDA, WAPDA making contract from these

independent power producers for example contract to the company which charge variable cost

from EPP on fuel base generation. So WAPDA agreement to this company and decide the fuel

price for example the cost is rupees 45000/3000 units. So the price is rupees 15 per unit.

5.4.18 Indexation Factor

In which calculate and decide the rate according to the units such as 100million units in

1997, the cost is rupees 1 per unit. so the cost is also rupees 100million.

5.4.19 Fuel Indexation

It means charge the cost according to the fuel rate. The rate decide according to the

current rate of fuel .for example the fuel indexation is 100million units and the rate is rupees 15

per unit. The cost is rupees 1500million and the units are measure in maga watts. these are

always calculate monthly.

5.4.20 According to CPP

In which for example 100million units and the reference price is rupees 10 per unit. so

the cost is rupees 10000million.In that method the major thing is factor of the rate of dollar.

for example we assume the rate of dollar is equal to rupees 80 and the cost is now rupees

80000million.

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According to the WAPDA there are different types of the line losses which are

underlying.

5.4.22 Transmission and distribution losses (TSD)

These losses are adjusted as the cost on the remaining units.

5.4.23 Busbar

The losses adjust according to the NATIONAL TRANSMISSION ANT DISPATCH

COMPANY (NTDC) to grid estuations and drop electricity due to the flow of current.

5.4.24 Deduction term

The line losses are bear due to deduction of bills.

5.4.25 Defective term

In which meters are defectives then making estimated units according to previous units

consumption of last 11 months or currently corresponding month or last year month estimated.

5.4.26 Critical path method

CPM is used in manufacturing process according to the time and motion study.

According to the CPM the work done accurately and timely so according to this costing and

planning department is very important for their project and work on them.

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5.4.27 Structure of line losses

WAPDA (residual) out of 13 companies such as LESSCO, FASSCO, KESSCO, and

other companies. Divide in different companies for identified their functions. In 13 companies

9 companies are DISCO (distribution companies) and 4 companies are GENCOS (making

power through fuel).

5.5.1 GENRATION COMPANIES

1. WAPDA ( just HYDEL )

2. GENCOS

3. IPP

5.5.2 Pipe line of Electricity

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5.5.3 Distribution margin

The margin which can get from deduction of cost in sale. This margin showing that the

excess amount which getting in according to costing and planning department through the

deduction of all costs from sale.

5.5.4 Sale in price

Selling price = Distribution margin + cost

Distribution margin= Sale cost

5.5.5 Establishment cost

Operating and maintenance cost (O&M )

Depreciation

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Return on assets (ROA )

Return on assets ( DM )

5.5.6 Tariffs Partitions

NEPRA give prices according to the different types of prititions of tariffs which are

followings.

5.5.7 Regulatory Tariff

NEPRA regulate the tariff then government of Pakistan (GOP) notify of this tariff. The

other name of the regulatory tariff is determining tariff.

5.5.8 Notified Tariff

The notified tariff showing by the government which are different from the determine

or regulatory tariff.

5.5.9 Consumer Tariff:

This type of tariff making according to the consumer. The first two tariffs may be same

but the consumer tariff is different from these two.

5.5.10 Changes in Tariff / Unstructured Tariff

It means changes of prices of fuel or increases the prices of fuel which are impact on

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5.5.11 Structured Tariff

In which included structure changes or base changes because of returns. After this

structure changes this determination of prices.

A1: Domestic tariff of household.

A2: For commercial usage.

B1,B2,B3: Industrial categories according to their usage of electricity

C1: Big units of industrial

D1,D2: Tube wells and agriculture tariff

E1: Temporary connection which are domestic or construction

E2: For commercial business

F: seasonal connection such as rice and ice mill. In which concept of fix charges. In

which according to 6 month included the normal tariff plus 20% increment for seasonal

working

G: In which included the street lights (how many pools).

5.5.12 Average sale rate

Average sale rate = Total sale / Units (average tariff by NEPRA)

5.5.13 Revenue

Revenue = Units * Price

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5.5.14 Subsidy

The subsidy is always providing by the government of Pakistan to WAPDA.

5.5.15 Gross subsidy

The subsidy which provides by the all tariff to each other.

5.5.16 Break up

This break up basis on tariff, product mix (use units in tariffs), projection units.

5.5.17 Total budget

Total budget = Operating and maintenance budget + capital budget

5.5.18 Zero base budgeting

Zero base budgeting justify why increase budget? What reasons and justify the all

reasons.

5.5.19 National Electric Power Regulatory Authority (NEPRA)

GENRATION

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DISTRIBUTION

5.5.20 Revenue

According to standard average produced units of 28000 million units. Revenue split in

fixed and variable according to percentage. Variable cost / units and fixed cost measure in

mega watts. WAPDA HYDEL capacity 6444 mega watts.

CHAPTER 6

DIRECTOR OF WATER (WAPDA), WAPDA HOUSE LAHORE

The director of water control and discuss the varies functions which are followings.

Making dams

Water reservoir

Making canals

Research laboratories

Tube wells to needy areas

Research projects

Research on agriculture

Research on earth

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6.1 Dams

There are two major purposes of the making dams.

6.1.1 Water reservoir

The water reservoir making for the purpose of the storage of the water not for the

creation or generation of the power. In which showing the range of projects and how to make

the projects and whose are work on that projects . In water reservoir to observe the

organization, s capacity. The example of the reservoir is CHASHMA RISORWIRE, the

purpose of this project use for just agriculture purpose. The generation of electricity at

chashma barrage which is near from the chashma reservoir. The other purpose of this to

increase the generation of fish.

6.2 Canals

6.2.1 Kachi canal

A project for agriculture purpose start from the province of the SINDH and after

running throughout the province of the PUNJAB backed in the SINDH.

6.2.2 Thar canal

A big project which start with billions rupees in the province of the SINDH. It also

running throughout the province of the PANJAB and use for agriculture purpose throughout

KHUSHAB, BHAKAR, and JHANG and throughout PUNJAB.

6.2.3 Cost of thar canal

Cost of pc1 is rupees 32000 million and cost of pc 2 rupees 48000 million.

6.3 Budgeting

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In budgeting categorized because of different sources of funding according to PUBLIC

SECTOR DEVELOPMENT PROGRAM ( PSDP ) and other function involved in it.

6.4 Public sector development program ( PSDP )

Funding from government of Pakistan according to federal government. In October

letter from government of budget circular which define for estimate expenditure of future one

year and demands send to federal government according to projects.

Write done all information and submit all proposal, this department received proposals

from project and submit after checking to government. Checking accuracy record of usage of

fund, caution calculation according to historical session, check trial balances and accumulated

expenses calculate and less from pc 1 cost then available future calculation. Recognize the

caution is accurate and locate break up of finance of projects which included the fixed cost in

following ways

Establishment charges for admin

Calculate overhead charges which are 2.25%

Interest during the construction (IDC).

Consultant charges.

Add up all of them are called the total fixed cost and not compromise on that cost,

compulsory pay and assets locations and needs of new assets according to the requirements

then calculate the expected valve of assets. The excess amount consume on project work and

submit the proposal after the detail of all heads expenses such as admin expenses detail or

break ups. All expenses and where these are consumed such as salaries, travelling allowances,

daily allowances, power free supply, building rent, rates and taxes, computer charges,

stationary, advertisement charges, etc.

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e.g. the high increase of mangla dam cost is rupees 53000 million the budget is rupees 11000

million, in which fixed cost is rupees 2057 million and cost on work rupees 9000 million.

6.5 Procedure

This department received the proposals from the projects and overseeing them and

estimates the suitable values, detail of contractors.

Detail of contractors

How many payments and future payments

Work currently, previously, and future work

Mention time period, if time over run then reasons of this and time extensions.

All 42 projects discuss in this departments and the cost is rupees 101 billion deposits as

a proposals to the federal government in this year

Maintain books and send to GENERAL MANAGER OF FINANCE, MEMBER

WATER, CHAIRMAN and back to this department then making the cover letter and

send to the federal government. After this procedure decide the meetings which are

followings.

6.6 Meetings

6.6.1 Priority meeting

After the all procedure the proposal send to the federal government which making the

deductions on that budget in priority meeting.

6.6.2 ANNUAL PLANT COORDINATION COMMITTEE ( APCC )

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After the priority meeting the budget send to the APCC. The approve budget is just

rupees 10 billion by APCC meeting in this year but the proposal which this department send to

priority meeting is rupees 101 billion, so the deduction by the APCC is rupees 91 billion.

After extensions of that budget approved by APCC is rupees 16 billion.

6.7 NATIONAL ECONOMIC CONCIL (NEC)

After the APCC the budget is finalize in the NEC. In that meeting foll0wing authorities

involve and attend these meetings by the one or all of them.

GM NORTH(KHAIBAR PAKHTOONKHAH)

GM SOUTH

GM(PUNJAB)

GM(NOTTREN AREAS)

CHAIRMAN(WAPDA)

In this meeting the parliament involves and approve and finalize the budget then

signature on that budget by the president. Now the current budget is approving of rupees 16

billion.

After approve the final budget by the NEC the amount is give in the four faces. If any

problem inure discuss according to the cash plan not according to the proposal. The relief is

received in first quarter then to projects provide monthly and progress reports of previous

month from projects.

After quarter the federal government checking the work completed or not first quarter.

Discuss on the proposals and the review all quarters, after 6 months and after 1 year.

6.8.1 Function Director Of Water (WAPDA)

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6.8.2 Cash plan :

In which showing that how many cash use in four quarters according to approved the

final budget by the NEC.

6.8.3 Work plan :

It shows that how many work in 4 quarters, monthly, after 6 month and yearly.

Central work development party (CWDP)

If budget less then rupees 5 million then use in provincial works.

6.8.4 Token Provision

Token amount from the government against guarantee of projects. If situation is

unfavorable where project start, investment excess on project due to law & order situation. If

saving i.e. rupees 5million then surrender to federal government or secondly. Transfer amount

to needy project to just allocating projects which allocate against token money.

6.8.5 Off Funds

It means making a case of needy project transfer amount from continual project

savings, approve by federal government or at same amount then use or federal government

order to give past of that amount any other project, the federal government saying about it.

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6.9 Cost of generation of electricity

PARTICULAR GENERATION(GWH) COST (RS. IN

MILLLION)

HYDEL 28000 30000

THERMAL

GENCOS

19000 125000

IPPS 36000 290000

TOTAL

GENERATION

83000 445000

GENERATED/ PURCHASE 83000 units

UNIT LOST 17000 units

UNITS SOLD 66000 units

SALE VALUE Rupees 356000 million

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7.4.1 Why WAPDA take loan

WPADA is a working all areas in Pakistan and it is working on non profit bases. So

without improving its capacity it can not meet the demand of general public. And also it is

single power Generation Company Which provide Electricity directly to people.

7.4.2 Reasons

There are some reasons for which WAPDA take loan

Install new power plants

Decrease short fall

Meet electricity requirement in future

No alternative power production

Demand increase every year

So WPADA takes loan for meet the demand of electricity which increases day by day.

7.5 Foreign Currency

In which currency WPADA takes loan it return loan in same currency. Normally

WAPDA takes loan in dollar currency.

Loan is combination of Principle amount + Interest

7.6 Agreement

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When WAPDA need loan it make agreement with money provider intuitions. This

agreement includes following information like

Rate of interest

Place of payment

Issue date

Mode of payment

loan return date

Payment guarantee

agreement signed

7.7 Foreign Loan

Foreign loan are those loan which is taken outside the boundary of country. WPADA is

a large organization and it is working on non profit bases so it is very difficult for it to install

new power plant which need billions of investment and without improving its capacity it can

not meet the demand of general public. So WPADA takes loan for meet the demand of

electricity which increases day by day.

7.8 Parties

These are three parties involve at the time of making agreement of taking loan. These

parties are following

Borrower WAPDA

Guarantor Government or Commercial banks

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Lender Who provide loan

7.9 Types of Foreign Loan

There are two types of foreign loan

Direct Loan

Relending loan

7.10 Direct Loan

Direct loan WAPDA takes itself from commercial bank and other financial institutions.

Normally WAPDA itself give guarantee for loan but some time government can also give

guarantee. WAPDA has responsibility to return loan to the loan provider.

7.11 Relending Loan

In relending loan government it self involve directly for providing loan to WAPDA.

Foreign country or financial intuition provide loan to government and government reissue this

loan to WAPDA. WAPDA receive loan indirectly. Government receive loan at low rate of

interest like 2 or 3 percent but when government issue this loan to WAPDA than government

charge 15 percent rate of interest before two years ago it is 17 percent but now due to finish

power crises government reduce it.

7.12 Rates

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It is duty of WAPDA foreign currency department that fixed rate of loan that it return

according to KIBOR or LIBOR rate. If once rate id determine than it can not be change till the

project ended.

7.13 Loan provided Instit ution

Normally WAPDA takes loan for following financial intuition.

World Bank

Asian Development Bank

IMF(International Monetary Fund)

Kuwait fund

Some financial Institutions of France, United Kingdom, United State of America, Sudia Arabia

and Dubai

Currently loan Status

Intuited Amounts $

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Asian Development Bank 27 Millions

International Monetary Fund 13 Millions

Kawait Fund 8 Millions

Sudia Arabia Fund 31 Millions

Marine Insurance

8.1 Marine insurance procedure

It has been observed that the detailed procedure as laid down in this office circular

no INS/RRK/F. claim /cir-/6877/6974 dated April 26, 1969 and no

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INS/gen/707/7587 dated 03-07-72 for reporting of marine claim is not being properly

followed. Any lapse is apt to result in the non acceptance of marine insurance claims

and this causes loss to the authority .in order to avoid loss and obtain expeditious

settlement of these claims, the instruction contained in the above quoted circulars

have been modified up to date in the from of precise required to be observed in the a

given situation as followed which may please be followed faithfully by all

concerned.

It may kindly be noted documentation of a claim is the primary responsibility of the

consignees and mere intimation of loss to the insurance department does not absolve

the consignee of their responsibility. The consignees are therefore, in all

circumstances responsible to finalize the claims as early as possible. They should

provide, complete document to the insurance department WAPDA, Lahore within a

reasonable period i.e. 15 days after lodging the claim. However the period in the

respect of the Performa invoice and foreign suppliers reply in the case of the receipt

of short material should not exceed two months. If the documents are not received

within above period, the insurance department will not be in a position to pursue the

claim with M/s. national Insurance Corporation.

The marine policy protects the consignment right from the supplier warehouses

anywhere in the world to port of shipment, marine voyage to the port in Pakistan and

thence by inland transit right up to job site. This period is maximum 90 days after the

arrival of the ship at the port of discharge and the policy immediately expires on the

arrival of goods at final destination whichever is earlier.

At the time of issuance of the purchase order, a copy of the same should be provided

to the director insurance, WAPDA Lahore. he purchase order should clearly contain

instruction binding the suppliers to supply non negotiable document to the director

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insurance for taking the insurance cover of the material shipped by sea not exceeding

Rs25,000.000/-(Rupees two crore fifty lac) a week before the sailing of the vessel .

the shipment which exceeds Rs25,000,000/- but does not exceed Rs100,000,000/- is

held covered if notice is received in writing at least 14 days before the actual date of

the shipment . The limit of consignment in other modes of transportation is as under.

By post parcel Rs 5, 00,000/- (Rs. Five lacs) per carry.

By rail/truck Rs 10, 00,000/- (Rs. Ten lacs) per carry.

By air Rs 20, 00,000/- (Rs twenty lacs) per carry.

8.2 Damages at destinations

Goods which have reached the ultimate destination and kept in the story for eight days

without opening of the cases are with out survey will be held covered against undisclosed

damages clause and additional premium will have to be paid at following rates.

up to first 2 months 5% per month of the full premium

This will be reckoned from excluding premium for war risk cover

the date of consignment

reach the job site.

up to subsequent 6 months 10% per month of full premium

Excluding premium for war risk cover

up to further one years 15% per month of full premium

excluding premium for war risk cover

8.3 Storage risk clause

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n case of material does not reach the final destination with in 90 days after the

discharge of goods from the carrying vessel at the port of destination i.e. Karachi will be held

covered during temporary storage at the following rates:

up to 30 days to be reckoned additional 10% of the full premium including

premium for war risk cover

From date of expiry of 90 days are allowed

For each additional 30 days additional 10% of the full premium including

premium for war risk cover.

As soon as the goods are

Documents

Wapda Final Report