Public Accounts Committee seeks to delay power firms’ sell-off until asset valuation

ISLAMABAD: The Public Accounts Committee (PAC) on Tuesday urged the postponement of the privatization of power companies slated for January, until their assets such as machinery, land, and other properties have been thoroughly assessed and reassessed. This recommendation emerged following concerns raised by Auditor General of Pakistan Maqbool Ahmad Gondal, who questioned the government's reliance on outdated valuations of state assets during a PAC meeting to review the audit reports of the Power Division and its subsidiaries for 2024-25.

The committee noted that the management had neglected to revalue fixed assets worth Rs624.47 billion. The Auditor General's office also pointed out that the companies had failed to classify their assets, highlighting the negligence in adhering to directives from the National Electric Power Regulatory Authority (Nepra). Key components of financial statements, property, plant, and equipment, require accurate valuations to prevent distortions in a company's overall financial position.

PAC Chairperson Shahida Begum emphasized the necessity of determining the actual value and proper categorization of assets before proceeding with privatization. "Until we know their exact value, how can we privatize them? Selling them without proper valuation will undoubtedly lead to a loss for the government," she stated. She called for a reconvening in three weeks to evaluate the privatization process and ensure that assets are assigned their correct market values before any further steps are taken.

The Privatization Commission and the Power Division were directed to submit comprehensive reports at the upcoming meeting. The committee also reviewed audit objections regarding Rs8.648 billion payments levied on electricity consumers due to suboptimal planning, faulty equipment procurement, and shortcomings in grid station performance and associated transmission lines.

During a performance audit of the wind projects in the Sindh Wind Corridor, auditors discovered that Rs8.6 billion had been paid to wind power producers under the Non-Project Missed Volume (NPMV) mechanism. Despite the projects' readiness to supply electricity, the 220kV Jhimpir Grid Station frequently tripped, leading to system instability.

The management blamed the losses on poor equipment procurement and escalating climate change impacts. MNA Munazza Hassan criticized the response when National Grid Managing Director Altaf Hussain cited climate change as the cause, deeming it criminal negligence. MNA Shazia Marri condemned the resistance to renewable technologies.

Concerning the Rs8.6 billion figure, MNA Shazia Marri emphasized that the matter remained unsettled and called for further details at the next meeting, including the relevant inquiry report. She indicated that the issue would be revisited after the necessary information and assessments had been finalized.