Pakistan FILE COPY Water and Power Development Authority Appraisal of … · 2016-08-26 · Report No. 891a-PAK F COPY Pakistan FILE COPY Water and Power Development Authority Appraisal

Report No. 891a-PAK F COPYPakistan FILE COPYWater and Power Development AuthorityAppraisal of theSecond WAPDA Power ProjectJanuary 16, 1976

South Asia Projects Department

Not for Public Use

Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may nototherwise be disclosed without World Bank authorization.

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CURRENCY EQUIVALENTS

US$1 Pakistan Rupees (Rs) 9.90Rs 100 = US$10.10Rs 1 million - US$101,010

UNITS AND EQUIVALENTS

1 kilometer (km) 2 = 0.6214 miles (mi)1 square kilometer (km ) = 0.3861 square miles (sq mi)1 liter (1) - 0.0063 barrels3.785 liters (1) = 1 gallon (gal)4.545 liters (1) 1 Imperial gallon (Imp gal)30.48 centimeters (cm= 1 foot (ft)0.028 cubic meters (m ) 1 cubic foot (cu ft)1 kilovolt (kV) = 1,000 volts (v)1 megavolt-ampere (MVA) 1,000 kilovolt-amperes (kVA)i kilovolt-ampere (kVA) 1,000 volt-amperes (VA)1 megawatt (MW) 5 1,000 kilowatts (kW)1 gigawatt hour,(GWh) 1 million kilowatt hours (kWh)1 kilo calorie (kcal) 3.968 British thermal units (BTU)

ABBREVIATIONS AND ACRONYMS

ADB - Asian Development BankCIDA - Canadian International Development AgencyEAD - Economic Affairs DivisionEHV - Extra High VoltageGNP - Gross National ProductGDP - Gross Domestic ProductIBD - Indus Basin DevelopmentKANUPP - Karachi Nuclear Power PlantKESC - Karachi Electric Supply Corporation, Ltd.MPO - Machinery Pool OrganizationNESPAK - National Engineering Services of PakistanSCARP - Salinity Control and Reclamation ProjectUSAID - US Agency for International Development

WAPDA's FISCAL YEAR (FY)

July 1 - June 30

FOR OFFICIAL USE ONLY

PAKISTAN

WATER AND POWER DEVELOPMENT AUTHORITY (WAPDA)

Appraisal of the Second WAPDA Power Project

Table of Contents

Page No.

SUMMARY AND CONCLUSIONS . ..................... i-ii

I. INTRODUCTION ...................................... 1

II. THE POWER SECTOR ...... . . .... ... 2

Economic Background. 2Sector Organization .. 3Karachi Electric Supply Corporation, Ltd. (KESC) . 3The 1973 Constitution . . 4WAPDA's Existing Power Facilities . . . 4WAPDA's Market. . ....... 5Load Forecasts... 6Development Program... 7

III. THE BENEFICIARY... 9

WAPDA's Corporate Existence. 9Organization. 9Management ....................................... 10Accounting and Management Information .... ........ 11Personnel ........................................ 13

IV. THE PROJECT ........................................... 13

Description of the Project ....................... 13Cost Estimate .................................... 14Amount of the Loan ............................... 15Engineering and Construction ..... ................ 16Procurement and Disbursement ..... ................ 16Ecology ................. 17

V. JUSTIFICATION ................. 17

This report was prepared by Messrs. J. D. Carver and K. Stichenwirth andis based on information collected during an appraisal mission to Pakistanin March/April 1975.

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Page No.

VI. FINANCIAL ASPECTS .............................. 9...... 19

General .... ,.. . .. 19Past and Present Financial Situation . 19

Earnings Covenant .21Financial Forecasts .. 22Tariffs 0.. 24

Audit . 26Insurance.. ... *0 ....... 26Inter-Departmental Cash Transfers .26

Billing and Collection . . 27

VII. AGREEMENTS REACHED AND RECOMMENDATION . .. 27

ANNEXES

1. Number of Customers, Sales and Revenues

2. Installed Capacity and Capability (Total Pakistan)Page 1: as of June 30, 1975Page 2: as of June 30, 1980Page 3: as of June 30, 1985

3. Installed Capacity (Total Pakistan)Page 1: March Peak and ReservePage 2: September Peak and Reserve

4. Investment Program

5. WAPDA's Act

6. WAPDA's Organization Chart

7. Management and Accounting Consulting Services

3. Project Description, Cost Estimate and Implementation Schedule

9. Estimated Schedule of Disbursements

10. Financial StatementsPage 1: Actual and Forecast Income Statements 1971/72-1981/82Page 2: Forecast Sourzes and Applications of Funds Statements

1975/76-1981/82Page 3: Actual and Forecast Balance Sheets 1971/72-1981/82Page 4: Forecast Net Internal Cash Generation and Government

Equity ContributionsPage 5-8: Notes and Assumptions on Financial Projections

11. WAPDA's Tariffs

MAP No. 11215 R

PAKISTAN

Water and Power Development Authority (WAPDA)


SUMMARY AND CONCLUSIONS

i. This report covers the appraisal of a project comprising a 500 kVtransmission line Lyallpur-Multan-Guddu (total length about 340 miles) witha 220 kV switching station at Multan, construction tools and equipment forthe transformer repair bay at Lyallpur, engineering services including train-ing of local engineers abroad for 500 kV operation, and accounting and manage-ment consulting services. The total cost is estimated at US$113.8 millionequivalent including a foreign exchange component of US$50.0 million equiva-lent. A Loan covering the foreign exchange cost is proposed, financing 44%of the estimated total cost.

ii. The proposed Project fntiu part of a comprehensive 500 kV trans-mission system planned to event,ally create the backbone of a high voltagegrid connecting the hydro resources of the north with the thermal generationin the center and south thus providing the most economic means of supplyingpower throughout the country. Operation of the Project will be initiallyat 220 kV to transport the excess energy of the Guddu plant to the Northernarea. Conversion to 500 kV will occur when either Tarbela units 9-12 ora planned large nuclear plant is installed. Neither of these installationscan be expected to be in operation before the early 1980's; thus the largeinvestment required for 500 kV substations can be delayed.

iii. The entire 500 kV system as planned represents the least costsolution as compared to the alternative offered, i.e. separate developmentof the northern, central and southern areas. Savings can not only be ex-

pected through lower reserve capacity (capital cost savings), but also throughlower fuel consumption (use of what otherwise would be excess hydro energy).

iv. Procurement of the goods and services to be financed from theproceeds of the proposed Loan will be on the basis of international competi-tive bidding in accordance with the Bank's Guidelines. Local preference inbid evaluation will apply to purchases of equipment and material. Sincenegotiations with the engineering consultants have not been concluded yet,satisfactory contractual arrangements are a condition of Loan effectiveness.

v. The unfavorable state of WAPDA's Power Wing accounts as well asthe disorganized management information system require a comprehensiveaccounting consulting effort closely supervised by the Bank. WAPDA hascontracted local consultants supplemented by expatriate individuals forcertain skills the cost of which will be financed from funds of the Loan.Bank concurrence was sought for all intended consulting activities.

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vi. Over the past several years WAPDA's financial situation has beenprogressively deteriorating, Contributing factors were low tariffs andinsufficient tariff adjustments, suppressed sales and revenues due to lackof funds for financing adequate expansion, and high system losses. Giventhe magnitude of the one step tariff increase (about 50%) required to reachan acceptable level of self-generated funds, the proposed earnings covenantais at WAPDA's financial recovery through a combination of gradual tariffincreases permitting eventually at least a 30% internal contribution toexpansion, and capital contributions by the Government.

vii. WAPDA's power development program is very large, physically as wellas organizationally and financially. However, it constitutes the minimumrequirement for the organized development of WAPDA's supply area and anythingshort of the program would prolong the present unsatisfactory system con-ditions. The program calls for investments of Rs 27,878 million (US$2,816million equivalent) during the period 1975/76-81/82. The total investmentrequired during the Project construction period (1975/76-1979/80) is estimatedat US$1,765 equivalent. The total cost of the proposed Project (US$113.8million) represents 6.5% of the investment requirements, the proposed Loan(US$50 million) 2.8%.

viii. The 1973 Constitution of Pakistan has made "electricity" a con-current subject, i.e. the Central Parliament as well as any ProvincialAssembly have now the right to pass legislation on the matter. Consequently,two of the four provinces (Punjab and Sind) have indicated their intentionto establish their own electricity supply corporations whereas the Baluchistanand North-West Frontier provinces wish to continue receiving power servicetrom WAPDA. Although it is not certain at present whether regional powersupply companies will in fact be established, appropriate covenants wereagreed on to safeguard WAPDA's financial and operational viability.

ix. The proposed Loan will be made to the Government which in turn willlend the equivalent funds to WAPDA with a 25 year term, including about 5years of grace, and interest at the rate for Bank loans prevailing at thetime of Board presentation of this operation. The Government will be reim-bursed for part of the interest charge from the "Interest Subsidy Fund" aslaid down in Resolution No. 75-111 for "Third Window" operations.

PAKISTAN

Water and Power Development Authority (WAPDA)


I. INTRODUCTION

1.01 The Government of Pakistan has requested the Bank to help financea Project consisting mainly of the construction of two segments of the coun-try's planned 500 kV transmission system which, together with the 500 kV lineTarbela-Lyallpur, presently under construction with Canadian help, and the500 kV line Guddu-Hyderabad, financed with assistance of the Kuwait Develop-ment Fund, eventually will connect Tarbela in the north with Karachi in thesouth. Specifically the Project will cover:

(a) 500 kV single circuit transmission lines;

(i) Lyallpur to Multan (136 miles); and

(ii) Multan to Guddu (200 miles);

(b) a 220 kV switching station at Multan;

(c) tools and equipment for construction of the lines andthe transformer repair bay at Lyallpur (Gatti sub-station);

(d) engineering and construction supervision includingtraining of local engineers in 500 kV operation; and

(e) accounting and management consulting services.

The lines will be operated initially at 220 kV and converted to 500 kV by1982. The total cost of the Project is estimated at US$113.8 million equiva-lent, with a foreign exchange component of US$50.0 million equivalent whichwill be covered by the proposed Loan. The Beneficiary will be WAPDA, aquasi-autonomous entity charged through its Power Wing with the constructionand operation of power facilities.

1.02 The Loan is the second Bank Group operation concerning WAPDA'sPower Wing. The first Credit (213-PAK of August 14, 1970) was made to in-crease the capacity of WAPDA's distribution network by constructing or extend-ing a number of substations, adding about 1,000 MVA of power transformercapacity, related equipment, and management and engineering consulting services.

1.03 Apart from the above Credit, the Bank Group has had a long-standinginvolvement in water and power development in Pakistan, principally through

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the Indus Basin Development program. There have been two Credits and twoLoans as contributions to consortium financing of multipurpose projects in theWAPDA service area: Credits 60-PAK (1964) for US$58.5 million and 581-PAK(1975) for US$8 million, and Loans 266-PAK (1960) and 548-PAK (1968),totalling US$115 million.

1.04 WAPDA's performance has been uneven in the past. It has done aremarkable job of Implementation as the executing agency for the Indus BasinDevelopment works. However, the performance of its Power Wing has been markedby a number of shortcomings and the completion of the Credit 213-PAK projectwas delayed by 2-1/2 years. It is expected, however, that the new manage-ment together with the help of consultants will improve WAPDA's activities.

1.05 This report was prepared by Messrs. J.D. Carver and K. Stichenwirthand is based on information collected during an appraisal mission to Pakistanin March/April 1975.

II. THE POWER SECTOR

Economic Background

2.01 Pakistan covers an area of approximately 804,000 km and has apopulation of about 69 million (1974) growing at an annual rate of 3%. The1974 GNP per capita was US$129 at average 1972-74 prices and exchange rates.After averaging more than 6% annual growth during the 1960's, GDP has beengrowing at only around 3.1% per year between 1969/70 and 1974/75, with ag-riculture at about 0.3Z and manufacturing at about 3.2%. The slowdown wasa consequence of the political disturbances leading to the separation ofEast Pakistan and the creation of Bangladesh as well as the world wide eco-nomic deterioration coupled with a series of setbacks to the country's econo-my such as drought, higher than anticipated wheat imports, a deterioration ofabout 20% in the terms of trade, and the mishap at the Tarbela dam duringthe trial filling that will delay availability of irrigation water by aboutone year.

2.02 Pakistan's Government has ambitious investment plans in developingits manufacturing sector during the period 1975/76-1979/80, of which at leasttwo-thirds is expected to take place in large steel, fertilizer, petro-chemical and cement plants. These investments together with projects inrural electrification (in particular expansion of lift irrigation and salinitycontrol through electrified tubewells as well as village electrification)require more reliable electricity supply than could be provided in the past.This in turn necessitates the heavy investment program WAPDA is planning(para 2.22). The present installed capacity amounts,to 35 watts per in-habitant, and the per capita annual consumption is about 104 kWh. This,for instance, compares to per capita indices of 30 watts and 97 kwh in India.Less than 20% of the country's population have access to electricity.

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Sector Organization

2.03 The Electricity Act of 1910 governs the sector and e.powe uj theGovernment to issue licenses for the supply of electric power in variousareas of the country. The public power supply is primarily the responsibilityof WAPDA and the Karachi Electric Supply Corporation, Ltd. (KESC). WAPDA,serving the country with the exception of the Karachi area, accounts for about75% of power supply, KESC for the remaining 25%. About 14% of WAPDA'soutput is sold to various licensees which distribute within their area ofsupply. The 125 MW Karachi Nuclear Power Plant (KANUPP), owned and operatedby the Pakistan Atomic Energy Commission, sells its energy in bulk to KESC.A number of private industries have their own small captive plant, mainlyfor stand-by purposes, the installed capacity of which is estimated at about230 MW.

2.04 Following the 1960 Indus Waters Treaty between India and Pakistan,WAPDA was made responsible for implementing the Indus Basin Developmentscheme (IBD) which consists of a series of multi-purpose installations witha large power component - at thp >ment Mangla in operation (600 MW installedplus another 200 MW under cons cuction) and Tarbela under construction (event-ually 2,100 MW) - and a large number of irrigation canals and barrages in-cluding tubewells for lift irrigation as well as salinity control (SalinityControl and Reclamation Projects - SCARPs). In future the system will dependheavily on the generating capacity of both Mangla and Tarbela. About 25%of WAPDA's output is consumed by tubewells, about 64,000 of which (averagecapacity 10 kW) were connected by the end of FY 1973/74.

2.05 The Government and WAPDA are trying to accelerate village electri-fication. However, due to financial constraints as well as implementationdifficulties, achievement normally falls short of targets. Planning callsfor electrification of 1,000 villages per year. In FY 1973/74 only 580 vil-lages were electrified and the FY 1974/75 actual is not expected to surpassabout 800 (actual data are presently not available).

Karachi Electric Supply Corporation, Ltd. (KESC)

2.06 This company, whose license covers the greater Karachi area, wasformed in 1913 as a privately-owned enterprise and continued as such until1952 when the Government acquired controlling interest. Presently theGovernment holds directly 42% of the shares, but together with the 28%share of Government controlled banks and insurance companies, its influencein effect represents 70%. The balance of the share capital is held by privateindividuals.

2.07 KESC is well managed by experienced Pakistani officers. In 1974it had about 292,000 customers. Sales were 1,617 GWh representing an in-crease of about 8% over the 1973 level. This is less than the sales increaseof about 16% experienced in 1973 which, however, followed KESC's worst yearwith sales only 2% up. This was because KESC's sales, primarily restrictedto the industrial city of Karachi, were particularly sensitive to the crisis

situation in 1972. Its earnings position is satisfactory with a rate ofreturn of about 8% in 1974.

2.08 KESC's present installed capacity amounts to 383 MW; in additionit purchases the output of the 125 MW KANUPP nuclear station. With theexception of 20 MW of diesel units, all its generating plant is steam.

The 1973 Constitution

2.09 Following in part the recommendations of a committee headed by aprominent retired civil servant, Mr. G. Ahmad, the 1973 Constitution ofPakistan has designated "electricity" a "concurrent subject" (electricitygenerated from nuclear sources is excluded). The Central Parliament and anyProvincial Assembly now have the right to pass legislation on the subject.It permits provinces to construct or take over power houses, grid substations,transmission lines and distribution systems within their areas.

2.10 In exercising this right, two of the four provinces (Punjab andSind) have indicated their intention to take over from WAPDA certain distri-bution and subtransmission assets within their boundaries and to establishtheir own electricity supply organizations. While Punjab has shown particularinterest in this matter in the past (three committees - technical, financialand administrative - have tried to work out the modalities of the transfer),Sind has indicated that it would prefer a more cautious approach, carefullyevaluating all the aspects of the separation of activities before making afirm decision. The North-West Frontier province and the province of Baluchistanwish to continue receiving power service from WAPDA.

2.11 At the time of the appraisal, discussions regarding separation ofdistribution activities were at a peak in Punjab, however they have subsidedconsiderably since. At the moment attention focuses on the establishmentof regional "Area Boards" within WAPDA. It is expected that these boardswill deal directly with power related problems in the provinces withouthaving to refer to headquarters.

2.12 Although the opinion on whether separation of any activity willoccur at all varies widely within the Government and WAPDA, it must be con-sidered a possibility. In view of WAPDA's size and complexity, it shouldbe acceptable to the Bank as long as WAPDA is able to continue as a viableentity and to live up to the financial conditions outlined in Chapter VI.Consequently agreement was reached during negotiations that the Governmentand WAPDA will notify the Bank of any intention to initiate legislationor action which would change the structure of the power sector. Such noti-fication will be made sufficiently in advance to allow an exchange of viewswith the Bank regarding their effect on WAPDA's power wing.

WAPDA's Existing Power Facilities

2.13 By the end of FY 1974/75 WAPDA's installed capacity amounted to1,935 MW. It consisted of 45% hydro, 37% steam and 18% gas turbine capacity.

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The installations are concentrated in the north (hydro) and center (thermal)of the country. The transmission system consisted of about 340 miles of220 kV lines, 2,100 miles of 132 kV lines and 3,100 miles of 66 kV lines.Distribution is effected through a network of 11 kV lines. The aggregategrid substation transformer capacity amounted to about 2,700 MVA.

WAPDA's Market

2.14 Over the past decade, WAPDA's generation and sales developed asfollows:

Generation Station ConsumptionPlus Purchases Sales and Transmission

GWh % Increase GWh % Increase Distribution Losses

1965/66 2,910 17.1% 2,088 14.6% 28.2%1966/67 3,016 3.6% 2,098 0.5% 30.4%1967/68 3,648 21.0% 2,486 18.5% 31.9%1968/69 4,378 20.0% 2,939 18.2% 32.9%1969/70 5,163 17.9% 3,600 22.5% 30.3%1970/71 5,740 11.2% 4,047 12.4% 29.5%1971/72 6,029 5.0% 4,137 2.2% 31.4%1972/73 6,836 13.4% 4,599 11.2% 32.7%1973/74 7,183 5.1% 4,742 3.1% 34.0%1974/75 8,041 11.9% 5,212 9.9% 35.2%

From 1965/66 through 1969/70, when WAPDA's investments were still capableof keeping abreast of demand growth, sales increased annually by about 15%-23%(except 1966/67 with only 0.5% increase due to an excessively low water year).Since 1970/71 growth rates have dropped to 2%-11% per year, indicating notonly the effects of political unrest and severe drought, but also WAPDA'sand the Government's increasing inability to raise the funds required for aninvestment program in step with the potential power demand. This resulted inblackouts and load shedding as well as inability to connect new customersat the required rate.

2.15 Transmission and distribution losses (including theft) of the WAPDAsystem are high (para. 2.14). WAPDA's own estimate of theft, which includestampering with meters and unauthorized connections, amounts to approximately5%, the remainder of the losses results from inadequate capital expendituresin transmission, grid substations and distribution during the last severalyears. Until additional transmission and grid substations are completed -they will increase the number and decrease the length of distributioncircuits - it is not expected that any large improvement In system losseswill occur. As an immediate remedy WAPDA has started connecting the distrib-ution capacitors that have been installed for some years and is investigatingthe purchase and installation of low voltage capacitors for tubewells. Theyhave also earmarked a specific construction budget item for distributionsystem improvements.

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2.16 By end 1973/74 WAPDA served about 1.6 million consumers groupedinto the following categories and areas (for details see Annex 1):

Category Percentage Provinces' SalesCategory Sales (GWh) of Total Sales as Percentage of Total

Domestic 516 10.9% -Commercial 174 3.7Z -Industrial 2,251 47.5% -Agricultural 1,131 23.8% -Public Lighting 20 0.4% -Bulk Supply 650 13.7%

TOTAL 4 742 100.0%

Province

Punjab 3,623 - 76.4%Sind 411 - 8.7%Baluchistan 41 - 0.9%North-WestFrontier 667 - 14.0%

TOTAL 4,742 100.0%

Above table indicates the high proportion of sales at low agriculturaltariffs and the relative importance of industrial sales. It also showsthat about 85% of WAPDA's market would be affected by a separation of thePunjab and Sind provinces.

Load Forecasts

2.17 Load forecasting in WAPDA is the responsibility of the Power MarketSurvey Division, a separate organization within WAPDA. Its methodology isbased on the actual survey of prospective customers and collection of allrelevant data on proposed agriculture and industrial development from thepublic and private sectors. Diversity factors are then applied to arrive atthe resultant demand. Because the latest survey report was published inJune 1972 and, according to the mission's information, has not been updatedsince, the WAPDA forecasts have not been used in this report.

2.18 In trying to get an appreciation of the country's future marketrequirements, the mission relied on a modified load forecast prepared by thefirm of R.HV Consultants as part of a system planning study carried out for theBank (Gtra. 5.02). Their report uses the aggregate approach method whichassumes that for each country its future energy consumption is a function ofits present and past utilization per capita and that its rate of growth willdiminish with market saturation sooner or later than for other countries

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according to the way its popula Ion varies. The energy consump, .on derivedis corrected for unusual incremental load additions. The demand is thenderived from the energy consumption by applying appropriate load factors.

2.19 The load forecast used in this report is that prepared by EHVConsultants, modified by adding the pumping loads considered interruptibleby EHV. This addition was made because of WAPDA's objection to consideringthese loads interruptible for planning future generation. This incrementrepresents approximately 194 MW in 1975 increasing to 345 MW in 1985. Therate of growth of this forecast varies from 12% in the early years to 9.5%in.L;he later years. For details of the load forecast stating March andSeptember peak demands in megawatts refer to Annex 3.

Development Program

2.20 The sector expansion program for power generation between 1975/76and 1984/85 (Annex 2) used in this report follows essentially the presentplans of WAPDA and KESC. It is baspd on the same development pattern asprevious studies. However, to M'low for physical and financial constraints,postponements in the implementaLion schedule of various projects, in parti-cular the nuclear and the coal fired units, have been assumed. The programcalls for the earliest possible development of the hydro potential at Tarbela(2,100 MW) and the remaining units at Mangla (200 MW) and Warsak (80 MW) fora total of 2,380 MW. The thermal expansion includes 500 MW of gas turbines,1,275 MW of steam turbines and 1,200 MW of nuclear. The total new installa-tions are estimated to be 5,355 MW which compares to an installed capacityof 2,448 MW on June 30, 1975 and 7,803 MW on June 30, 1985, more than threetimes the present capacity. However, the March capability (lowest hydrocapability during the year) will only be increased from the present 1,999 MWto 6,247 MW, an increase of 4,248 MW (Annex 3).

2.21 WAPDA will be in charge of about 60% of the development program asoutlined above (3,230 MW) with sole responsibility for the investments inhydro projects. In addition it will have to undertake a large transmissionand distribution construction program, of which the 500 kV transmission system(this includes the Project) forms part. The schedule for completion of the500 kV system is estimated as follows:

(i) Tarbela - Lyallpur- First Circuit 1977- Second Circuit 1979

(ii) Lyallpur - Karachi 1981/82

(iii) Nuclear Interconnection 1983/84

An operating voltage of 500 kV is required because of the distances involved -840 miles from Tarbela to Karachi - and the magnitude of the power inter-changes between areas. The high voltage system will transmit the excess

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energy south during the high water season (July, August, September) and thethermal energy north during the dry season (March, April, May) to provide amore balanced system than exists now.

2.22 The cost of WAPDA's investment program during the Projectconstruction period is estimated as follows (Annex 4):

Investment Expenditures DuringThe Project Construction Period

(1975/76-1979/80)

Rs US$million million %

I. GenerationForeign 2,263.3 228.6Local 1,434.4 144.9

Total 3,697.7 373.5 21

II. TransmissionForeign 3,133.1 316.5Local 4,470.7 451.6

Total 7,603.8 768.1 43

III. DistributionForeign 230.0 23.2Local 3,720.0 375.8

Total 3,950.0 399.0 23

IV. MiscellaneousForeign 55.0 5.6Local 95.0 9.6

Total 150.0 15.2 1

V. Transfer Power Com-ponent SCARPs /a

Foreign - - -Local 2,070.1 209.1 _

Total 2,070.1 209.1 12

Total InvestmentsForeign 5,681.4 573.9 -Local 11,790.2 1,191.0 -

Total 17,471.6 1,764.9 100

/a These investment expenditures are originally incurred in the context ofthe total SCARP program executed by the Water Wing. Upon completionthey are transferred to the Power Wing.

The program, of which financing for about 15% of the foreign exchange costis secured, does not comprise all of WAPDA's power sector investments sincethe common cost of multi-purpose facilities is not allocated to power, leavingout a sizeable amount of power-related investments. The investments asplanned constitute the minimum requirement for the organized developmentof WAPDA's supply area and anything short of above program would prolong thepresent conditions of overloaded distribution and transmission (high systemlosses), suppressed demand and frequent blackouts. However, carrying out theprogram will place heavy demands on the organization and capability ofWAPDA. This re-inforces the need for the technical assistance providedunder the proposed project.

III. THE BENEFICIARY

WAPDA's Corporate Existence

3.01 WAPDA was created in 1958 by Government Act No. 31 (Annex 5).Its responsibility is the coordinated development of the country's waterand power resources. Although a quasi-autonomous entity, it acts in manyrespects as a Government agent carrying out various design and constructiontasks for the central as well as local governments. In particular, it isresponsible for preparing schemes for:

(i) irrigation, water supply and drainage;

(ii) generation, transmission and distributionof electric power including construction, main-tenance and operation of power houses and grids;

(iii) flood control;

(iv) prevention of waterlogging and reclamation ofwaterlogged and saline land;

(v) inland navigation; and

(vi) prevention of damage to the ecology.

3.02 WAPDA's supervisory agency is the Ministry of Fuel, Power andNatural Resources which, in cooperation with other public bodies, keepstight control over WAPDA's activities. Particular fields of Governmentinvolvements are tariffs (para 6.15), approval of the investment budget(central and regional governments, depending on source of funds), andborrowing.

Organization

3.03 WAPDA's management, the "Authority", consists of a Chairman and notmore than three Members responsible for power, water and finances (Annex 6).All Authority members are appointed by the Government; the Chairman for fiveyears and the Members for three years. They may be re-appointed.

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3.04 The Authority has a double function: it is on the one hand the topmanagement of WAPDA, on the other hand should participate in policy-makingdecisions. Day-to-day management matters, however, prevent the Chairman andthe Members from meaningful participation in policy aspects. Consequently,the responsibility for policy matters rests almost exclusively with theGovernment authorities.

3.05 WAPDA is subdivided into the following groups, called "Wings":

(a) Power Wing: Responsible for construction and operationof power generation, transmission and distributionfacilities throughout the country with the exception ofthe areas served by KESC and various small licensees whichbuy in bulk from WAPDA and distribute.

(b) Water Wing: Responsible for all matters concerningirrigation, water supply and flood control.

The Water Wing includes a sub-group charged with the execution ofthe huge Indus Basin Development Scheme (IBD). Until recently WAPDA alsooperated the Machinery Pool Organization (MPO), a construction equipmentpool, now separated and functioning as an independent company called"Mechanized Construction of Pakistan, Ltd."

3.06 The Power Wing has been conceived as a revenue earning publicutility, the Water Wing as an agency charged with the construction ofprojects on behalf of the Central or Provincial Governments which providefinancing entirely through their respective budgets. Upon completion, theprojects are transferred for operation to federal or regional bodies or,as in the case of the Mangla multi-purpose facility, to the Power Wing.

Management

3.07 WAPDA's complex organization structure and disorganized accountingand management system have been the subject of studies and recommendations,such as the "Lieftink Report 1969 (actually finished in July 1967), the"Report of the Indus Basin Review Mission 1969" (C. Willoughby and T. Berrie- May 1969), the "Study for WAPDA's Need for Future Consulting Services1969" (U.S. AID-financed team headed by K. Holum - June 1969), and "AnEnquiry into the Organization of the Water and Power Development Authorityof West Pakistan" (Lord Hinton - November 1969). All of these studiesrecommended the introduction of systems to streamline management andaccounting, and to provide effective management information flows. Credit213-PAK also included the requirement for management improvement consultingservices.

3.08 Until recently no serious attempts have been made by the Governmentor WAPDA to correct the situation. This is largely the result of the politicalsituation in the country and the frequent changes in top management. Inaddition, the large number of qualified personnel in headquarters in relationto the limited number of available jobs frequently created dissatisfaction.

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Accounting and lanagement Info, nation

3.09 WAPDA keeps separate accounts for the following major groups:

(i) The Power Wing: The accounting consists of a conglomerateof single and double entry procedures, based on accrual aswell as cash concepts. This is understandable from ahistoric point of view since the Power Wing acquired theGovernment accounting procedures practically unchanged.

(ii) The Water Wing, based on more modern accounting standards.

(iii) The Indus Basin Development - within the Water Wing - onbehalf of the Government.

3.10 UJnder Credit 213-PAK, WAPDA undertook to develop and implementfor the Power Wing an effective accounting system which would supply themanagement with information neceEsary for planning its operations, servicesand future investment needs. FH.wever, almost nothing has so far beenachieved.

3.11 The accounting systems and procedures as presently used have anumber of peculiarities which considerably slow the recording process. Theimportant ones are:

(i) the Chief Accountant WAPDA, at the same time ChiefAccountant Water, is responsible to the Member Finance.Apart from the water accounts, his department is incharge of keeping the construction and project accountsfor new power stations and grid systems (500 KV through66 KV lines including grid substations). At the end ofthe fiscal year, the balance of these accounts is passedon to the Chief Accountant Power for incorporation in thebalance sheet of the Power Wing;

(ii) the Chief Accountant Power reports to the Member Power.His duties are:

(a) construction accounts for distribution from11 kV down;

(b) minor construction in completed generation andtransmission projects;

(c) revenue and cost accounts Power Wing; and

(d) finalization of the Power Wing balance sheet afterincorporation of power assets transferred from"Chief Accountant WAPDA;"

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(iii) in the case of multi-purpose projects, the power componentis transferred to the "Power Wing" upon completion. Basic-ally, it is WAPDA's practice to transfer components clearlyassociated with electric power (turbines, generators,switchyard); no attempt has so far been made to allocatecommon costs; and

(iv) transfer of the power component of multi-purpose projectsis often done according to the source of finance ratherthan the technical significance. For instance, the portionof the Tarbela powerhouse associated with Units 1-4 isbeing financed from funds for the dam; consequently, onlythe cost of the power equipment is included in the assetsof the Power Wing. ADB, however, recently committed fundsfor financing Units 5 and 6 and the powerhouse extensionfor Units 5-8. Since these assets are being financed bya power loan, equipment and powerhouse extension will beincluded in the Power Wing assets. Years after theircompletion, the assets of the Warsak and Mangla stationsare still recorded at preliminary values.

Furthermore, proper asset revaluation is not permitted (the foreignexchange component was revalued to the extent of the devaluation ofthe Pakistan Rupee in 1972 for outstanding foreign borrowings). Thisis because Government assets must be recorded at cost and WAPDA isconsidered a Government department for this purpose. It also appearsthat part of the asset accounting information never reaches the respon-sible accounting unit.

3.12 In discussions with the mission, WAPDA and Government officialsacknowledged that improvement in accounting matters of the Power Wing isurgently required. Accordingly WAPDA has hired the local firm of Taseer, Hadi,Khalid and Co. as accounting consultants who have commenced the assignmentin cooperation with Peat, Marwick and Mitchell of the United Kingdom undera contractual arrangement agreed to by the Bank Group.

3.13 The consulting activities, details of which are shown in Annex 7,will be carried out in two phases. During Phase I the consultants will reviewthe present status of WAPDA's accounting systems, make proposals on improve-ments, where required, and design the necessary accounts, manuals and forms.Phase II will be concerned with the implementation of the systems establishedduring Phase I. The following main activities are planned:

(i) review of WAPDA's present organizational structure andrecommendations on its reorganization particularly withregard to the establishment of Area Boards within WAPDA;

(ii) design of accounting systems;

(iii) evaluation of the existing budgeting and budget controlsystems (investment and operation) and recommendationon their improvement;

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(iv) design of an efficient management information system; and

(v) training of WAPDA personnel in the application of the newsystems.

3.14 Maximum involvement of WAPDA employees in the consulting effort isenvisaged. This has the advantage of familiarizing as many persons aspossible with the procedures and systems thereby reducing training and imple-mentation time, and of shortening the time for data collection. The assign-ment is estimated to require 92 man-months and to take about 20 months tocomplete. About 46 man-months, at an estimated cost of US$300,000 equivalent,will be required for expatriate personnel. Financing of this expense isincluded in the proposed Loan. Since part of these expenses will occurbefore Loan signing, retroactive financing is proposed for up to US$100,000.

Personnel

3.15 WAPDA is one of the largest employers in Pakistan. It has about61,000 permanent employees and with the contractors and temporary labor itusually hires, the labor force utilized can amount to 75,000. About 60%(45,000) are employed in the Power Wing. Although its activities cover allaspects of power generation, transmission and distribution, and the areaserved is large, the number of employees is high. Reductions, however, areunlikely because of the Government's employment oriented policy.

IV. THE PROJECT

Description of the Project

4.01 The proposed Project comprises:

(a) construction of a 500 kV single circuit transmissionline Lyallpur to Multan (136 miles);

(b) construction of a 500 kV single circuit transmissionline Multan to Guddu (200 miles);

(c) installation of a 220 kV switching station at Multan;

(d) tools and equipment for construction of the lines andto equip the transformer repair bay at Lyallpur (GattiSubstation);

(e) engineering and supervision including training ofPakistani engineers in 500 kV system operation; and

(f) accounting and management consulting services.

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4.02 The transmission lines will be operated temporarily at 220 kVwith conversion to 500 kV operation not later than mid-1982. The line Multanto Guddu, to be completed by December 1977, will transmit the excess thermalenergy generated by the 430 MW Guddu plant in the central area to the loadcenters in the northern area during the low water season of the hydro plants.The line Lyallpur to Multan, to be completed by 1979/80, will reinforce theexisting 220 kV double circuit line and enable the transmission of additionalhydro energy to the load centers of Multan and the central area during thehigh water season of the hydro plants.

4.03 The 220 kV switching station is required for the interconnectionat Multan and will later become the low tension side of the future 500 kVsubstation. Terminal facilities for the interconnection at Lyallpur andGuddu are being provided under projects presently under construction by WAPDA.

4.04 The Project forms part of a comprehensive 500 kV transmissionsystem planned to form the backbone of a high voltage grid connecting thehydro resources of the north with the thermal generation in the central andsouthern areas thus providing the most economic means of supplying powerthroughout the country. The first section of the system, the line Tarbela-Lyallpur, is presently under construction with the help of a Canadian In-ternational Development Agency (CIDA) credit of about US$40 million. Withthe installation of Tarbela units 5 to 8 a second Tarbela-Lyallpur line in-cluding substations will be required and will take 2 years to complete.Operation of both lines will be at 500 kV from the beginning. The sectionsLyallpur-Multan-Guddu (the Project) and Guddu-Hyderabad-Karachi (financingof the foreign exchange cost secured through a US$44 million loan from theKuwait Development Fund) will initially be operated at 220 kV with conver-sion to 500 kV bv 1982.

4.05 The section Lyallpur-Multan-Guddu included in the Project will beconstructed with single circuit towers and bundled conductors similar tothose being used on the first Tarbela-Lyallpur line. The route will followthe right of way surveyed some years ago with slight modifications to enterthe substations. It is WAPDA's practice to purchase the land for towerfootings and secure an easement between towers. No delays due to rights ofway are expected. The only major problem will be the Indus river crossingwhere caissons will have to be placed in the river bed to support the towers.The Project is expected to be completed by December 31, 1979. The imple-mentation schedule is attached in Annex 8.

Cost Estimate

4.06 The detailed estimate of the Project is given in Annex 8 andsim-arliz4Zd below:

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Lillion of Rupees Million of Dollars

/a /aLocal- Foreign Total Local- Foreign Total

Transmission Line(136 miles) 123.0 94.0 217.0 12.4 9.5 21.9

Transmission Line(200 miles) 182.0 139.0 321.0 18.4 14.0 32.4

Subtotal 305.0 233.0 538.0 30.8 23.5 54.3

220 kV Switching Station 29.7 47.5 77.2 3.0 4.8 7.8Tool & Equipment and Trans-former Repair Bay 13.0 26.8 39.8 1.3 2.7 4.0

Engineering & Supervision 26.8 27.8 54.6 2.7 2.8 5.5WAPDA Administration, InlandFreight & Handling, LocalInsurance and MiscellaneousBuildings 62. - 62.5 6.3 - 6.3

Basic Project Cost 437.0 335.1 772.1 44.1 33.8 77.9

ContingenciesPhysical 43.7 33.5 77.2 4.4 3.4 7.8Price 150.8 122.9 273.7 15.0 12.5 27.5

SubtotalContingencies 194.5 156.4 350.9 19.4 15.9 35.3

Accounting and ManagementConsulting Services 3.0 3.0 6.0 0.3 0.3 0.6

Total Project Cost 634.5 494.5 1,129.0 63.8 50.0 113.8

/a Local costs include duties and taxes on foreign materials of 32% (141.4million rupees).

4.07 The basic prices were determined from the Tarbela-Lyallpur line(214 miles) being constructed 1975/76 and materials purchased in 1974. Aphysical contingency of 10% has been included to allow for unforeseenevents. Price contingencies of 15% per year on local costs and 12%-10%-8%per year on foreign costs have been included in the estimate to coverexpected price increases during the construction period. The overall pricecontingencies amount to 32% of the basic cost of the project includingphysical contingencies.

Amount of the Loan

4.08 The proposed Loan (US$50 million equivalent) covers the foreignexchange cost of the Project (44% of the total cost) consisting of:

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(i) material and equipment;

(ii) engineering consulting services including training abroadof Pakistani engineers for 500 kV operation; and

(iii) accounting and management consulting services (para. 3.13).

Financing of construction contracts is not proposed.

Engineering and Construction

4.09 Consultants qualified in 500 kV transmission design in associationwith a local firm will assist WAPDA in design, preparation of bid documents,award of contracts and supervision of construction. It is estimated that500 man months of field and head office time will be required by the foreignconsultant. Contract negotiations between WAPDA, the local firm of NationalEngineering Services of Pakistan (NESPAK) and Harza Engineering Company(United States) are underway. The arrangement is subject to Bank approvaland it was agreed during negotiations that the Loan would become effectiveonly after conclusion of satisfactory contractual arrangements with theconsultants.

4.10 There exist competent local contracting firms for construction ofthe line, two of which are now engaged in the construction of the Tarbela-Lyallpur line. These firms should be in a competitive position and willlikely win awards for the construction of the Lyallpur-Multan-Guddu trans-mission line, the construction period being immediately following that ofthe Tarbela-Lyallpur line. The contract(s) for this work will be handled andfinanced by WAPDA. Since no Bank Group financing is proposed for thispurpose, the question of domestic preference for the local contracting indus-try does not arise.

Procurement and Disbursement

4.11 All major items of material for the transmission line, substationequipment, tools and equipment for construction of the line, and tools andequipment for the transformer repair bay, except those costing less thanUS$50,000 equivalent up to an aggregate of US$500,000, will be procured byinternational competitive bidding in accordance with the Bank Guidelines.Some participation by Pakistani manufacturers is envisaged in which case a15% preference on the c.i.f. price, or the prevailing duties, if lower, willbe applicable. However, it is doubted that Pakistani manufacturers will beable to compete as the quantities involved are beyond the capacity of thelocal manufacturers when considering the normal requirement of the country.Disbursements from the proposed Bank Loan would cover:

(i) 100% of the foreign exchange cost of all imported materialand equipment or 100% of the ex-factory cost of locallymanufactured material and equipment;

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(ii) 100% of the foreign exchange cost of the consultants; and

(iii) 100% of the foreign exchange cost of overseas training.

The disbursement schedule is attached as Annex 9.

Ecology

4.12 No ecological problems are expected. Conductor sizes and spacingwill be designed to keep corona losses and radio interference within accept-able limits. Since one 500 kV line is equivalent to approximately five220 kV lines, the amount of right of way is greatly reduced and the appear-ance improved.

V. JUSTIFICATION

5.01 The Project forms part of a 500 kV transmission system to inter-connect the system between the Tarbela project in the north and the portand industrial city of Karachi in the south. The first of two 500 kV circuitsbetween Tarbela and Lyallpur is presently under construction. On completionof the 500 kV system the large hydro facilities in the north would be fullyinterconnected with the major natural gas-fired thermal facilities, situatedadjacent to the Sui gas fields in the Upper Sind area, and with other thermalplant at the various major load centers, such as Lyallpur, Multan andKarachi.

5.02 In early 1972 a "System Planning Study of the Pakistan Network"was undertaken for the Bank by Meta Systems Inc. assisted by EHV Consultantsof Montreal. The basic conclusions of that study were that the installationof all 12 units at Tarbela (2,100 MW) should be undertaken as quickly as pos-sible and completed by 1983; the installation of Units 7 and 8 (200 MW) atMangla should be completed by 1978; gas turbines (200 MW) should be installedat Multan by 1976; thereafter with the exception of the Karachi-Hyderabadarea, thermal capacity should be concentrated near the gas fields of theUpper Sind. The plan concluded that all major markets and centers of gene-ration should be integrated by a 500 kV transmission system, extending fromTarbela to Lyallpur in 1977, and to Karachi-Hyderabad by 1981. M4any alter-native development plans were analyzed in developing this basic scheme. Witha few minor variations, principally in timing, WAPDA is following theserecommendations. The cost of generating plant, transmission lines and sub-station equipment has increased considerably since 1972 but the generalconclusions of the study hold good today.

5.03 Interconnection of the overall system by means of a 500 kV linkfrom Tarbela to Karachi-Hyderabad will result in significant savings infuel costs by the use of hydro capacity during the wet season. Further,the reduction of hydro capacity in the critical period of March-April-Mayas a result of low reservoir levels is compensated for by the thermal

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capacity available in the Upper Sind area. More important, however, is asignificant saving in generating capacity requirements due to (i) seasonaldiversity in peak demands between the Northern, Central and SouthernRegions, and (ii) pooling of reserves. If these three regions are operatedin isolation, the total required reserve capacity for the Pakistan System(basically represented by the largest generating unit in each region)would be of the order of 1,410 MW by 1985. With adequate regionalinterconnection, as proposed, the reserve requirement falls to 600 MW.Further, due to seasonal demand diversity between regions, the coincidentpeak demand for the Pakistan System in 1985 is 340 MW less than it would befor the three major regions operating in isolation. Based on these twofactors alone, at present-day costs of generating plant, the equivalentreduction of 1,150 MW of generating capacity by 1985 represents a savingof an order of magnitude of $460 million. The cost of the transmissionline interconnecting Lyallpur and Karachi at 500 kV, complete with allnecessary substation equipment, has been estimated at US$335 million. Thiswould be US$234 million based on present day-cost - about half the cost,at present day-prices, of the savings in equivalent generation investmentreferred to above--which makes this transmission line the least cost long-term solution at any interest rate.

5.04 During the course of their study META Systems Inc. devoted con-siderable effort to the choices between 500 kV and 220 kV transmissionsystems and concluded that interconnection at 500 kV was clearly prefer-able. This conclusion was based on the system configuration expectedin the early 1980's. The Project which will interconnect Lyallpur withMultan and Guddu (336 miles) forms only a part of this ultimate north-south interconnection and, given system conditions which will exist atthe time the Project is expected to be commissioned (1979) could besatisfactorily operated at 220 kV, thus postponing substantial capital in-vestment in 500 kV substation terminal equipment. Building the Project forultimate 500 kV operation but operating initially at 220 kV is estimatedto cost $113 million or about $81 million at present day-costs. With thislimited interconnection between the Northern and Central Regions a reductionin reserve capacity requirements of 175 MW and of 30 MW due to diversitybetween the maximum demands of the two regions would be realized. Thesereductions would represent investment savings in generating capacity ofabout US$82 million. To these capital cost savings should be added theannual savings in operating costs which would accrue from the greater useof hydro generation at Tarbela and Mangla, and the displacement of oiland higher cost gas fired generation at Multan and Lyallpur by cheaper gasfired generation in the more efficient Guddu thermal station.

5.05 The alternatives to the transmission line Lyallpur-Multan-Guddufor s lying the deficits of the Northern area are as follows:

(i) installation of a 200 MW steam plant at Multan withfurnace oil or Bunker C as fuel as additional naturalgas is not available due to gas pipe line limitations;

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(ii) installation of an additional 200 MW of gas turbine inthe northern area using diesel as fuel due to gas pipeline limitations;

(iii) installation of either the steam plant or the gasturbines and construction of an additional gas pipeline from Guddu to the site of either of theseinstallations.

These alternatives can be eliminated as either (i) and (iii) would cost morethan the proposed transmission line and (ii) would require high cost dieselas fuel which has a higher priority use for transportation. The transmissionline leads to the least cost development of the power sector in Pakistan.

5.06 Given the complexities of the operation of the entire system itis difficult to quantify the benefits attributable to the Project and,therefore, to calculate its internal economic return. The justificationof the complete 500 kV transmission scheme and therefore of the Projectrests upon the unquantifiable benefits brought about by interconnectedsystems, e.g. pooling of generating plants of different operating character-istics, reduction in the total reserve plant capacity required for a reason-able standard of service, a reduction in the aggregate demands of the regionsby virtue of diversity, ability to locate power stations at optimum sitesand of optimum characteristics to take advantage of economies of scale, andflexibility to allow the best positioning of tapping of load points.

VI. FINANCIAL ASPECTS

General

6.01 Since the proceeds of the proposed Loan would be entirely al-located to power development, the information in this section applies onlyto WAPDA's Power Wing unless otherwise stated. The financial statementsand projections have been derived from WAPDA's Power Wing accounts. Asmentioned in Chapter III, these are not as reliable as they should be, giventhe period of time WAPDA has been in existence, the past focus on thesevery inadequacies and the attempts made to correct them. They neverthelessprovide an acceptable basis for judging future financial trends. Further-more it has been assumed that WAPDA will retain its present responsibilities,and separation of certain activites as permitted under the 1973 Constitution(paras. 2.09-2.12) will not occur.

Past and Present Financial Situation

6.02 The documents of Credit 213-PAK require that WAPDA's revenues besufficient to earn a rate of return of at least 8% per year. As a generalunderstanding (Side Letter No. 2 dated August 13, 1970) WAPDA undertook inaddition to work towards the following goals:

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(a) a rate of return of at least 10%;

(b) a contribution to future capital expenditures of at least30% from net internal cash generation; and

(c) a limit on money borrowed so that gross internal cashgeneration shall be not less than 1.5 times the maximumfuture debt service for any succeeding fiscal year.

6.03 WAPDA did not reach these targets for the following reasons:

(a) low tariffs and insufficient tariff adjustments (inaddition to the latest tariff increase - see paragraph 6.11another adjustment of about 20% would be required to achievea return of 8%);

(b) lack of funds for financing adequate expansion resulted inrationing and demand suppression and consequently lower thannormal sales and revenues; and

(c) high system losses (para. 2.14).

In addition, the low earnings required excessive borrowing. These increasedthe debt service requirements considerably and worsened the debt/equityratio to a level of about 80/20 in 1974/75.

6.04 ,WAPDA's financial situation as developed over the past severalyears can be summarized as follows (for details see Annex 10):

Ending June 30 1971/72 1972/73 1973/74 1974/75

Energy Sales (GWh) 4,137 4,599 4,742 5,212Increase in Energy Sales 2.2% 11.2% 3.1% 9.9%Average Revenues per

kWh Sold (paisa) 13.54 13.96 16.27 18.48Operating Revenues

(Rs mission) 602.4 680.9 808.1 1,006.0Operating Expenses

(including provisionfor bad debts) 388.1 443.6 635.5 907.0

Operating Income 234.3 257.3 192.6 99.0Rate of Return on

Average Net FixedAssets in Operation /a 6.5% 6.6% 4.1% 1.7%

Debt/Equity Ratio 69:31 70:30 74:26 80:20

/a Assets valued at historic cost.

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Above table indicates a progressively deteriorating picture. Up to aboutFY 1972/73 WAPDA has managed to maintain rates of return of around 6% andnet internal cash generation of about 20% of annual capital expenditures.From mid-FY 1973/74 heavy fuel cost increases and the failure to introducecompensating tariff adjustments, brough WAPDA to a critical financial positionin FY 1974/75 with a rate of return of barely 2%. As an emergency measure,WAPDA's Power Wing had to "borrow" from the Water Wing (in effect Governmentfunds provided for irrigation projects) the cash for debt service paymentsfalling due, and additional borrowing had to be arranged with the Government.The 13.3% tariff increase effective June 7, 1975 (para. 6.11) eased thesituation only marginally.

Earnings Covenant

6.05 It is clear that, particularly in the light of WAPDA's heavycapital expansion program (para. 2.22), a well balanced financial situationmust be restored. Given the magnitude of the one-step tariff increase(about 50%) required to reach an acceptable level of self-generated funds,which in the light of the Government's past reluctance to raise rates asand when required would be unlikely to materialize, the proposed earningscovenant aims at gradually increasing tariffs. In addition the Governmentundertook to make capital contributions during the early years when WAPDAwill be unable to finance internally the required percentage of annual powerinvestments. Consequently the following was agreed:

(a) tariffs will be increased step by step during the periodFY 1976/77 - 1979/80 to permit financing on average 30%of the power investments (including those undertaken by the WaterWing and later transferred to the Power Wing) through netinternal cash generation in every consecutive three-yearperiod. This level should be reached during the period1977/78 - 1979/80 at the latest. The performance test wouldbe made on the basis of historic three-year periods, forthe first time in 1979/80 for the 1977/78 - 1979/80 period,and annually thereafter for the respective past three years(the detailed calculation can be seen in Annex 10, page 4);

(b) the first increase will be at least 20% effective not laterthan March 31, 1977;

(c) to strengthen WAPDA's capital base, the Government will, inany given year until FY 1979/80, make dividend and interestfree capital contributions equivalent to the shortfall betweenthe net internal cash generation actually earned and thatequivalent to 30% of annual investments; and

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(d) up to and including FY 1979/80 WAPDA will seekannually, not later than one month before theend of each current fiscal year, Bank Groupconcurrence for its financing plan of the follow-ing fiscal year.

6.06 The proposed earnings covenant addresses itself directly to theneed for financing a very heavy investment program by judging the adequacyof WAPDA's revenues against required investments. It also avoids probablecontroversies with the Government over the question of asset revaluation(para. 3.11) which would be a prerequisite for a meaningful rate of returncovenant. The projected rates of return on assets based on above cash contrib-ution vary between 9% and 10%, with 3.5% in 1975/76 and 5.1% in 1976/77 whenthe covenant is only partially operative (para. 6.09 and Annex 10, page 1).

Financial Forecasts

6.07 Following is a summary of WAPDA's financial projections for theProject construction period (for details see Annex 10) based on the proposedearnings covenant. In addition to the stipulated tariff increase of 20%(para. 6.05 (b)) additional tariff adjustments of 25% effective January 1,1978 and 10% effective January 1, 1980 have been assumed. It must be re-alized, of course, that other combinations between tariff actions and equityinputs are possible.

Project Construction Period(FY 1975/76 - 1979/80)

US$ millionRs million Equivalent %

SOURCES OF FUNDS

Internal Sources

Net Internal Cash Generation 3,597.9 363.4 20.0

External Sources

Government Equity Contributions 1,834.1 185.3 10.2Bank Loan 494.5 50.0 2.7Othur Foreign Borrowing 5,186.9 523.9 28.8Local Borrowing 6,890.2 695.9 38.3

Total External Sources 14,405.7 1,455.1 80.0

TOTAL SOURCES OF FUNDS 18,003.6 1,818.5 100.0

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US$ millionRs million Equivalent

APPLICATIONS OF FUNDS

Investments

Bank Group Project

Foreign Component 494.5 50.0 2.7Local Component 634.5 63.8 3.5

Total 1,129.0 113.8 6.2

Other Investments

Foreign Components 5,186.9 523.9 28.8Local Component 11,155.7 1,127.1 62.0

Total 16,342.6 1,651.0 90.8

Total Investments

Foreign Component 5,681.4 573.9 31.5Local Component 11,790.2 1,190.9 65.5

Total 17,471.6 1,764.8 97.0

Variations in Working Capital 532.0 53.7 3.0

TOTAL APPLICATIONS OF FUNDS 18,003.6 1,818.5 100.0

6.08 During the Project construction period net internal cash generationis expected to finance about 20% of the investment program of which theProject represents 6.5%. The lower than stipulated percentage is due to thefact that the earnings covenant is not fully effective before the period1977/78 through 1979/80. The proposed Bank loan will cover about 9% ofthe expected foreign component of all investments and about 44% of theProject cost. WAPDA's gross fixed assets are estimated to increase by about200% during FY 1975/76 through 1979/80. Despite the improving overall fi-nancial situation and assuming that all foreign loans can be secured, theheavy investment program still requires raising of local funds of the orderof 880 million dollars equivalent. These will have to be provided from theGovernment budget due to the limitations of the domestic capital market.This is a formidable amount but, judging from past experience (in particularTarbela), feasible.

6.09 For illustration purposes following is a summary of the projectedfinancial results based on the above-described earnings covenant (for detailssee Annex 10):

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Ending June 30 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82

Energy Sales(GWh) 6,017 7,097 8,149 9,221 10,612 12,033 13,454

Increase in EnergySales 15.5% 18.0% 14.8% 13.2% 15.1% 13.4% 11.8%

Average Revenuesper KWh Sold(paisa) 23.1 24.3 31.2 34.6 36.4 38.1 37.2

Operating Revenues(Rs million) 1,433 1,769 2,595 3,252 3,925 4,657 5,082

Operating Expenses(Rs million) 1,178 1,298 1,447 1,756 1,950 2,286 2,733

Operating Income(Rs million) 255 471 1,148 1,496 1,975 2,371 2,349

Rate of Return onAverage Non-Revalued NetFixed Assets inOperation 3.5% 5.1% 9,6% 9.6% 10.0% 10.3% 8.9%

Investments(Rs million) 2,661 3,213 3,632 3,485 4,480 5,402 5,005

Net Internal CashGeneration asPercentage ofInvestments(a) annual (1.0%) 6.0% 23.6% 29.8% 34.3% 32.7% 31.5%(b) three-year

average - - 10.8% 20.2% 29.6% 32.5% 32.8%Debt/EquityRatio 76:24 75:25 75:25 75:25 74:26 74:26 73:27

Tariffs

6.10 WAPDA's Act states that electricity tariffs should be set to meet"operating costs, interest charges and depreciating of assets, the redemptionat due time of loans other than those covered by depreciation, the payment ofany taxes and a reasonable return on investment." The Government has neverspecified what constitutes a "reasonable return" and, although it agreed tothe 8% return stipulated in the 213-PAK documents, never granted tariffadjustments sufficient for WAPDA to reach this return.

6.11 WAPDA's present tariff schedule together with the fuel clause andthe local duties levied on power consumption are attached as Annex 11. Overthe past several years the following tariff adjustments were made:

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(a) mid-1971 ; overall increase of about 10%;

(b) July 1, 1973 : 10% increase on public lighting and bulksupply, and 20% on industrial and commercialconsumption. Overall increase 12.8%;

(c) July 1, 1974 : 10% increase except for domestic consumers.Overall increase 8.9%;

(d) February 1, 1975: Overall increase 15%; and

(e) June 7, 1975 : 15% increase except for domestic.Overall increase 13.3%.

6.12 The above indicates the cautious approach the Government takes ingranting tariff increases for WAPDA (much higher adjustments had been appliedfor, the most recent one was 35%). In addition, it eliminated residentialand tubewell customers from part of the increases, distorting WAPDA's tariffsto a point where residential and tubewells are paying less than cost whilecommercial and industrial customers are paying somewhere near cost. Conse-quently an overall tariff study is not required. The subject has beendiscussed during negotiations and will be followed up during supervision inthe context of future tariff adjustments.

6.13 Effective November 3, 1975, the Government permitted WAPDA toinclude a fuel adjustment clause in its tariff. Although not as importantas an overall rate adjustment, it will provide protection from the adverseeffects of further increases in the price of gas and oil. During negotia-tions agreement was reached that WAPDA keep a fuel clause adjustment ineffect.

6.14 The Power Load Control Study of WAPDA issued by Boggis andWestfield on August 11, 1971 gave two main recommendations that could beinitiated by WAPDA in order to mold system demand to system capability.These two recommendations were that seasonal maximum demand tariffs, perhapsof the price-linked-to-month kind, be introduced for industrial customers,and that an experiment be undertaken to explore the practical possibilitiesof introducing a time-of-day tariff for private tubewell operations. Theseproposals will be further discussed during supervision.

6.15 Tariff adjustments are subject to approval by the Government.After application with the Ministry of Fuel, Power and Natural Resources,a number of meetings are held with representatives of various agenciesconcerned, in particular the Planning Board, the Economic Affairs Divisionand other groups of the Ministry of Finance. Final decision is made by theSecretary General of the Ministry of Finance. Recently the "StandingPower Rates Advisory Board" was created. It consists of representativesof the four provincial governments, one representative of WAPDA, one ofthe Planning Board and a varying number of members of the National Assembly.

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It is headed by the Chief Engineering Advisor of the Ministry of Fuel, Powerand Natural Resources. Its function is to advise all parties concernedon the necessity of tariff adjustments, their timing and implications.

Audit

6.16 Under its Act, the Authority is required to be audited annuallyby the office of the Comptroller and Auditor-General of Pakistan. TheComptroller is appointed by the President of the Republic and responsibleto the legislature. A special group of the Auditor-General, called "DirectorWAPDA Audit", carries out the audit on a permanent basis. The auditor claimsthat after about 2 months of closing of the books WAPDA is supplied withthe "Preliminary Audit Observations." This is a loose-leaf report containingthe auditor's findings and provides the Authority with an opportunity torespond. Discussions have in the past taken more than one year and the finalaudit report to the legislature is normally not issued earlier than aboutthree years after the end of the respective fiscal year.

6.17 This situation is not satisfactory. Furthermore, the mission wasnot able to form an opinion on the quality of the audit due to the unsatis-factory state of WAPDA's accounts and the lack of any kind of recent auditor'sreports. Imposing external auditors on a deficient accounting system,however, would not be satisfactory either. It is therefore proposed to acceptthe WAPDA audit for the Bank Group's auditing purposes until WAPDA's accountingsystem is improved with the help of consultants (paras. 3.12-3.14). WAPDA'saccounts together with the "Preliminary Audit Observations" will be sentto the Bank not later than 6 months after the close of the fiscal year.After establishing a modern accounting system in WAPDA's Power Wing (Annex 7),a decision on whether the Government audit is satisfactory will be made.

Insurance

6.18 At present WAPDA is only insuring a minor portion of its propertyin operation but insurance against hazards of acquisition and transportationand delivery of goods is regularly arranged. Premiums for full operationinsurance would be exorbitantly high in Pakistan. However, WAPDA is evaluat-ing the cost of insuring major equipment. To provide a minimum protectionWAPDA will in the meantime allocate annually 0.2% of net fixed assets to aself-insurance reserve.

Inter-De?artmental Cash Transfers

6.19 Before the critical liquidity situation of the Power Wing (para.6.04) M<ich led to temporary transfers of funds from the Water Wing to thePowe. Wing, borrowing by the Water Wing from the Power Wing had reachedthe approximate total of Rs 173.4 million in FY 1973/74 before charginginterest, and about Rs 232.9 million when interest is included. This isan undesirable situation. Consequently, agreement was reached during nego-tiations that cash transfers between the two wings will no longer occur.

- 27 -

Billing and Collection

6.20 With the exception of the Lahore area where bills are issued with

the help of a WAPDA-owned computer, all billing is done manually. Withroughly 1.6 million customers this is a formidable task and it is commenda-ble that WAPDA managed to keep its accounts receivable slightly belowthree-months billing levels. To maintain this acceptable record, agreementwas reached during negotiations that WAPDA would make all efforts to keepaccounts receivable at the end of any month to not more than the amountbilled during the previous three-months period.

VII. AGREEMENTS REACHED AND RECOMMENDATION

7.01 During loan negotiations, agreement was reached on the followingprincipal points and appropriate covenants were included in the documents:

(a) future changes in legislation affecting the powersector (para 2.12);

(b) earnings covenant (para 6.05);

(c) fuel adjustment clause (para. 6.13);

(d) audit (para 6.17);

(e) inter-departmental cash transfers (para 6.19); and

(f) maximum level of accounts receivable (para 6.20).

7.02 A condition of loan effectiveness is the conclusion of satis-

factory contractual arrangements with the engineering consultants (para4.09).

7.03 The proposed Project constitutes a suitable basis for a Bank loanof US$50 million, on "Third Window" terms.

January 16, 1976

PAKISTANWater and Power Development Authority (WAPDA)

Power WingSECOND WAPDA POWER PROJECT

Number of Customers, Sales and Revenues of WAPDA

Sales RevenuesVariation Category Category

Units Sold against Percentage PercentageNumber of per Consumer previous of Total Rs of Total

Year Category Consumers GWh (kWh) year Sales million Revenues

Domestic 930,350 388 417 - 9.8% 77 15.6%Commercial 238,147 146 613 - 3.7% 37 7.5%Industrial 64,494 1,755 27,212 - 44,2% 227 45.9%

1970/71 Agricultural 50,212 1,072 21,349 - 27.0% 83 16.8%Public Lighting 587 22 37,478 - o.6% 4 o.8%Bulk Supply 434 583 1,343 318 - 14.7% 66 13.4%

TOTAL 1, 224 3966 9- 100. 0% 100.0%

Domestic 998,922 392 392 1.0% 9.5% 79 14.1%Commercial 258,328 142 550 (2.7%) 3.4% 37 6.6%Industrial 67,056 2,109 31,451 20.2% 51.0%7 291 52. 0%

1971/72 Agricultural 52,342 997 19,048 (4.3%) 24.1% 90 16.1%Public Lighting 663 19 28,658 (13.6%) 0.4% 4 0.7%Bulk Supply 477 478 1,002,096 (18.0%) 11.6%, 59 10.5%

TOTAL 1,377,788 4,137 3,003 4 *3% 100.% 560 100.0%

Domestic 1,070,192 454 424 15.8% 9.9% 90 14.0%Commercial 275,273 159 578 12. 0% 3.5% 42 6.5%Industrial 72,158 2,222 30,794 5.4% 48.3% 318 49.5%

1972/73 Agricultural 58,472 1,170 20,010 17.4% 25.4% 116 18.1%Public Lighting 684 22 32,164 15.8% 0.5% 5 0.8%Bulk Supply 530 572 1,079,245 19.7% 12.4% 71 11.1%

TOTAL 1,477,309 4,599 3,113 100.02 72 100.0% axDomestic 1,137,678 516 454 13.7% 10.9% 103 13.3%Comrnercial 300,219 174 580 9.4% 3.7% 56 7.3%Industrial 78,277 2,251 28,757 1.3% 47.5% 397 51.4% ut

1973/74 Agricultural 63,730 1,131 17,744 (3.3%) 23.8% 121 15.7%Public Lighting 718 20 27,855 (9.1%) 0.4% 5 o.6%Bulk Supply 532 650 1,221,805 13.6% 13.7% 90 11.7%

TOTAL 1,50l,154 2,999 3 100. 772 100.07

PAKiSTANWater and Power Development Authority (WAPDA)


Sumber of Customers, Sales and Revenues of the Punjab Province

Sales Revenues

Variation Category Percentage Category PercentageUnits Sold against Percentage of Percentage of

Number of per Consumer previous of Total Total WAPDA Rs of Total Total WAPDAYear Category Consumers GWh (kWh) -Year Sales Sales million Revenues Revenu _

Domestic 624,766 286 457 - 9.o% 73.7% 56 14.5% 72.7%Commercial 147,623 105 711 - 3.3% 71.9% 26 6.7% 70.3%Tndustrial 49,o97 1,350 27,492 - 42.7% 76.9% 175 45.2% 77.1%

1970/71 Agricultural 39,998 964 24,093 - 30.5% 89.9% 76 19.6% 91.6%Public Lighting 289 15 50,322 - o.s% 68. 2% 3 0.8% 75.0%Bulk Supply 280 444 1,588,846 - 14.0% 76.2% 51 13.2% 77.3%

TOTAL o3,670 -100.W0% 79.8% 387 100o.0

Domestic 670.043 285 425 - 9 3% 72.7% 56 13.5% 70.9%Commercial 162,605 96 589 (8.6%k) 3.1% 67.6% 25 6.0% 67.6%Industrial 50,054 1,418 28,339 5.0% 46.5% 67.2% 205 49.4% 70.5%

1971/72 Agricultural 40,677 870 21,387 9.8% 28.5% 87.3% 80 19.3% 88.9%Public Lighting 331 10 29,157 (33.3%) 0.3% 52.6% 2 0.5% 50.0%Bulk Supply 322 373 1,157,837 (16.0%) 12.3% 78.0% 47 11.3% 79.7%

TOTAL 924,032 3,052 3,302 T3.T) 100.0% 7-3.8% 2T15 10.o%

Domestic 725,220 327 450 14.7% 9.4% 72.0% 65 13.3% 72.2%Commercial 173,338 109 630 13.5% 3.1% 68.6% 29 6.0% 69.0%Tndustrial 52,974 1,508 28,472 6.3% 43.5% 67.9% 227 46.6% 71.4%

1972/73 Agricultural 44,607 1,023 22,918 17.6% 29.5% 74.4% 104 21.4% 89.7%Public Lighting 345 14 40,255 40.o% o.4% 63.6% 3 o.6% 60.0%Bulk Supply 358 487 1,361 109 30.6% 14.1% 85.1% 59 12.1% 83.1%

TOTAL 713.6% 100.0% 75.4% 1 0.0% 75.9%

Domestic 764,016 383 502 17.1% 10.6% 74.2% 74 12.6% 71.8%Commercial 186,08g 121 649 11.0% 3.3% 69.5% 39 6.6% 69.6%Industrial 56,939 1,573 27,631 4.3% 43.4% 69.9% 290 49.2% 73.0%

1973/74 Agricultural 48,463 979 20,200 (4.3%) 27.0% 86.6% 108 18.3% 89.3%Public Lighting 355 11 30,214 (21.4%) 0.3% 55.0% 3 0.5% 60.0%Bulk Supply 344 556 1,616,297 14.2% 15.4% 85.5% 75 12.8% 83.3%

TOTAL 1,056,206 3, 6233,431 45100. 100.0% 76.3%

0

'0g

(D m

PAKISTAN

Water and PDwer Development Authority (WAPDA)

Power Wing

SECOND WAPDA POWER PROJECT

Number of Customers, Sales and Revenues of the Sind Province

Sales Revenues

Variation Category Percentage Category Percentage

Units Sold against Percentage of Percentage of

Number of per Consumer previous of Total Total WAPDA Rs of Total Total WAPDA

Year Category Consumers GWh (kWh) Year Sales Sales million Revenues Revenues

Domestic 104,601 46 443 - 15.1% 11.9% 8 17.8% 10.43

Commercial 46,975 23 494 - 7.5% 15.8% 7 15.5% 18.9%

Industrial 6,5i7 158 24,272 - 51.8% 9.0% 22 48.9% 9.7%

1970/71 Agricultural 2,392 43 17,972 - 14.1% 4.0% 3 6.7% 3.6%Public Lighting 132 5 36,545 - 1.6% 22.7% 1 2.2% 25.0%

Bulk Supply 69 50 432,602 - 9.9% 5.1% 4 8.9% 6.1%

TOTAL 160,686 305 1,900 - 100.0%, 7.7% 4 100.0% 9.1%

Domestic 111,283 47 418 2.2% 13.1% 12.0% 10 18.2% 12.7%

Commercial 49,263 25 511 8.7% 7.0% 17.6% 6 10. 9% 16.2%

Industrial 7,318 180 2,458 11.4% 50.3% 8.5% 28 50.9% 9.6%

1971/72 Agricultural 2,908 66 22,713 53.5% 18.4% 6.6% 6 10.9% 6.7%Public Lightino 129 6 48,325 20.0% 1.7% 31.6% 1 1.8% 25.0%

Bulk Supply 66 34 521,550 13.3% 9.5% 7.1% 4 7.3% 6.8%TOTAL 170,96 7 2,095 17.4% o 00. 55 100.0%9.

Domestic 118,047 54 455 14.91% 14.1% 11. 0% 10 16.7% 11.1%

Commercial 53,337 25 460 - 6.5% 15.7% 6 10.0% 14.3%

Industrial 8,510 213 25,013 18.3% 55.5% 9. 6% 32 53.3% 10.1%

1972/73 Agricultural 4,025 63 12,628 (4.5%) 16.4% 5.4% 8 13.3% 6.9%Public Lighting 135 5 34,164 (16.7%) 1.3% 22.7% 1 1.7% 20.0%o

Bulk Supply 76 24 321 175 (29.4%) 6.2% 4.2% 3 5.0% 4.2%

TOTAL 184,130 3b47.3% 100.0% 80 100.0% 9.3%

Domestic 134,408 49 366 (9.3%) 11.9% 9.5% 11 14.5% 10.7%

Commercial 62,170 26 423 4.0%° 6.3% 14.9% 8 10.5% i4.3' ID

Industrial 9,287 236 25,370 10.8% 57.4% 10.5°o 43 56.6% 0o.81% ,

1973/74 Agricultural 4,608 '3 15,909 15.9% 17.8% 6.5% 8 10.5% 6.6% 2,Public Lighting 145 5 37,767 - 1.2% 25.0% 2 2.6% 40.0°

Bulk Supply 72 22 392,558 (8.3%) 5.4% 3.4% 4 5.3% 4.4% .

TOTAL 210,690 411 1953 100.0% 7 100.0% 9- .


Power Wing


Number of Customers, Sales and Revenues of the Baluchistan Province

Sales RevenuesVariation Category Percentage Category Percentage

Units Sold against Percentage of Percentage ofNumber of per Consumer previous of Total Total WAPDA Rs of Total Total WAPDAYear Category Consumers GWh (kWh) Year Sales Sales million Revenues Revenues

Domestic 14,656 1 123 - 2.0% 0.3% 1 _Commercial 4,357 1 56 - 2.0% 0.7% - _Industrial 465 12 24,994 - 23.5% 0.7% 2 _1970/71 Agricultural 894 15 17,232 - 29.4% 1.4% 1 _Public Lighting 11 - 11,700 - - - - _Bulk Supply 1 22 22,178,760 - 43.1% 3.8% 2 _TOTAL 20X384 51 2,521 - 100.0% 1.3% -

Domestic 14,955 7 444 700.0% 18.9% 1.8% 2 _Commercial 4,436 4 833 400.o% 10.8% 2.8% 1 _Industrial 493 17 34,903 41.7% 46.0% 0.8% 3 -1971/72 Agricultural 950 8 8,652 (46.7%) 21.6% 0.8% - _Public Lighting 11 - 36,806 - - - _Bulk Supply 1 1 777,207 (95.5%) 2.7% 2.1%-

TOTAL 20,846 37 1,771 (") 100.0% 6 9

Domestic 15,550 7 481 - 15.9% 1.5% 2Commercial 5,431 6 1,047 50.0% 13.6% 3.8% 1Industrial 779 14 18,141 (17.7%) 31.8% o.6% 31972/73 Agricultural 997 14 14,156 75.0% 31.8% 1.2% 1Public Lighting 12 1 40,022 95.0% 2.3% 4.5% -Bulk Supply 7 2 296,672 200.0% 4.6% 3.5% 1TOTA1L22v776 - 4 1,931 1100.1

Domestic 17,074 7 408 - 17.1% 1.4% 2Commercial 5,622 4 803 (33.3%) 9.8% 2.3% 1Industrial 852 16 18,705 14.3% 39.0% 0.7% 31973/74 Agricultural 1,167 11 9,423 (21.4%) 26.8% 1.0% 1Public Lighting 15 1 37,809 - 2.4% 5.0% - -Bulk Supply 7 2 321 812 - 4.9% 0.3% 1 _

TOTAL 24 TT 7 %7 1:667 h-0

0Q


Power Wing

SECOND WAPDA POWER PROJECTNumber of Customers, Sales and Revenues of the North-West Frontier Province

Sales RevenuesVariation Category Percentage Category Percentage

Units Sold against Percentage of Percentage ofNumber of per Consumer previous of Total Total WAPDA Rs of Total Total WAPDA

Year Category Consumers GWh (kWh) Year Sales Sales million Revenues Revenues

Domestic 186,327 54 290 - 12.1% 13.9% 11 19.3% 14.3%Commercial 39,192 18 455 - 4.1% 12.3% 5 8.8% 13.5%Industrial 8,415 235 27,982 - 52.8% 13.4% 29 50.9% 12.8%

1970/71 Agricultural 6,928 50 7,245 - 11.2% 4.7% 2 3.5% 2.4%Public Lighting 155 2 15,640 - 0.5% 9.1% 1 1.8% 25.0%Bulk Supply 84 86 1,018n213 - 19.3% 14.8% 9 15.7% 13.6%

TOTAL 241,101 5 I0 io0.0 o 11.2% 57 100.0% 11.5%

Domestic 202,641 54 268 - 7.8% 13.8% 12 14.1% 15.2%1Commercial 42,o24 18 2.6% 12.7% 5 5. p 13.5%industrial 9,191 493 53,630 109.8% 71.5% 23.4% 56 65.9% 19.2%

1971/72 Agricultural 7,807 53 6,783 6.0% 7.7% 5.3% 3 3.5% 3.3%Public Lighting 192 2 119,275 - 0.3% 10.5% - - -

Bulk Supply 88 70 796 443 (18.6%) 10.1% 14.6% 9 l0.6% 15.31TOTAL 261,943 69035 55.1% 100.0% 177 100.% 15.2%

Domestic 211,375 66 312 22.2% 9.4% 14.5% 14 15.7% 15.6%Commercial 43,167 20 464 11.1% 2.8% 12.6% 5 5.6% 11.9 %oIndustrial 9,895 487 49,207 (1.2%) 69.2% 21.9% 57 64.1% 17.9%

1972/73 Agricultural 8,843 70 7,886 32.1% io.0% 6.0% 4 4.5% 3.4%Public Lighting 192 3 15,369 50.0% 0.4% 13.6% 1 1.11% 20.0%Bulk Supply 89 58 651,339 17.1% 8.2/ 8 9.0% 11.3%

TOTAL 273,561 704 2,572 100.0% 15.3% 10080%

Domestic 222,180 76 342 15.2% 11.4% 14,7% 16 16.2% 15.5%Commercial 46,338 23 491 15.0% 3.5% 13.2% 7 7.1% 12.5%Industrial 11,199 427 38,084 (12.3%) 64.1% 19.0% 60 60.6% 15.1% in '

1973/74 Agricultural 9,492 67 7,127 (4.5%) 10.1% 5.9% 4 4.0% 3.3% a Public Lighting 203 3 13,263 - 0.5% 15.9o% 1 l.O% 20.0% < aBulk Supply 107 70 653,438 20.7% 10. 4 10.8% 11 11.1% 12.2%

TOTAL 269,519 2,299 ( 5T 4%) DO0 10% 12.8

ANNEX 2Page 1 of 3 pages

PAKISTANWater and Power Developient Authority (WAPDA)

Power WingSecond WAPDA Power Project

Table of Installed Capacity and Capability as of June 30, 1975

(Total Pakistan)

INSTALIED CAPACITY (MW) MARCH CAPABILITY SEPTEMBER CAPABILITYNorthern Area Hydro Thermal Total mW MW

Mangla 600 294 734Warsak 160 158 158Small Hydros 107 74 84Multan Steam 260 244 244Lyallpur Steam 132 120 120L;yallpur Gas Turbines 200 186 186Shahdara Gas Turbines 70 70

Central Area

Ouddu Steam 220 220 208 208Sukkar Steam 50 50 48 48Quetta Steam 15 15 12 12Quetta Gas Turbines 33 33 33 33

Southern Area

Hyderabad Steam 43 43 37 37Kotri Gas Turbines 30 30 30 30Kanupp Nuclear 125 125 119 119Korangi Steam 257 257 257 257West Aharf Steam 111 ill 99 99Site Diesels 20 20 10 10

Total Pakistan 867 1581 2448 1999 2449


PAKISTANWater and Power DeveRo! zent Authority (WAPDA)

rower WingSecond WMPDA Power Project

Table of Installed rapacity and Capability as of June 30, 1980

(Total Pakistan)

INSTALIT CAPACITY (MW) MARCH CAPABILITY SEPTEMBER CAPABILITYNorthern Area Thermal MW MW

Tarbela 1400 840 1600Mangla 800 394 970Warsak 240 238 238Small lydros 107 74 74Multan Steam 260 244 244Lyallpur Steam 132 120 120Lyallpur Gas Turbines 200 186 186Shahdara Gas Turbines 85 70 70

t47 m77 3224 2166 3502

Central Area

Ouddu Steam 430 408 408Sukkar Steam 50 48 48Quetta Steam 15 12 12Qaetta Gas Turbines 33 33

_27 m -?Oil 501

Southern Area

Hyderabad Steam 43 37 37Kotri Gas Turbines 130 123 123Kanupp Nuclear 125 U19 119Korangi Steam 382 375 375West Wharf Steam 111 99 99Site Diesels 20 10 10Karachi Gas Turbines 100 93 93Steel Mill Steam 200 190 190

- 1111 11n1 T5Ss 1046

Total Pakistan 2547 2316 4863 3713 5049


PAKISTANWater and Power Developmnent Authority (WAFDA)

Poer ViUSecond WAPDAPcier Project

Table of Installed Capacity and Capability as of June 30, 1985

(Total Pakistan)

INSTALLED CAPACITY (MW) MARCH CAPABIIT= SEPTEMBlER CAPABILITYNorthern Area E Thermal Total MW MW

Tarbela 2100 1260 2400Mangla 800 394 970Warsak 240 238 238Small Hydros 107 74 74Multan Steam 260 244 244Multan Gas Turbines 200 186 186Lyallpur Steam 132 120 120Lyallpur Gas Turbines 200 186 186Shahdara Gas Turbines 85 70 70Sahiwal Gas Turbines 100 93 93Chasma Nuclear 600 570 570

3247 177 ;2z 3435

Central Area

(bddu Steam 430 408 408Sukkar Steam 50 48 48Quetta Steam 15 12 12Quetta Gas Turbines 33 33 33

Southern Area

Hyderabad Steam 43 37 37Kotri Gas Turbines 130 123 123Lahkra Coal 240 220 220Kampp Nuclear 725 689 689Korangi Steam 382 375 375West Wharf Steam ill 99 99Site Diesels 20 10 10Karachi Gas Turbines 100 93 93Steel Mill Generation 200 190 190Station D Steam 500 475 475

Total Pakistan 3247 4556 7803 6247 7963

PAKISTAN

WATER AND POWER DEVELOPMENT AUTHORITY (WAPDA)

POWER WING


TABLE OF INSTALLED CAPACITY, MARCH CAPABILITY, MARCH PEAR AND MARCH RESERVE

(TOTAL PAKISTAN)

GENERATION ADDITION NORTHERN AREA CENTRAL AREA SOUTHERN AREA TOTAL PAKITTAN

MARCH MARCH MARCH MARCHINSTALLED CAPABI- MARCH MARCH INSTALLED CAPABI- MARCH MARCH INSTALLED CAPABI- MARCH MARCH INSTALLED CAPABI- MARCH MARCH

NORTHERN CENTRAL SOUTHERN CAPACITY LlTY PEAR RESERVE CAPACITY LITY PEAR RESERVE CAPACITY LITY PEAK RESERVE CAPACITY LITY PEAR RESERVE

AREA AREA AREA MW MW MW MW MW MW MW IV MW MW M 7 NMW m1 NW 186 NW

1973 1144 862 1063 (221) 98 93 100 (7) 586 552 395 157 1828 1507 1578 (71)

1974 MANGLA 5 & 6 CODDU 1 1344 960 1222 (262) 208 197 123 74 586 552 448 104 2138 1709 1793 (84)

1975 LYALLPUR GT CUDDD 2 1544 1146 1354 (208) 318 301 142 159 586 552 510 42 2448 1g99 2006 (7)

1976 RANACHI GT 1544 1146 1512 (366) 318 301 164 137 686 645 576 69 2548 2092 2252 (160)

1977 TAR8ELA 1 to 4 KORANGI 4 2244 156l 1661 (95) 318 301 186 115 811 763 651 112 3373 2630 2498 132

1976 GUDDU 3 ROTR! cT 2244 1566 1842 (276) 528 501 212 209 911 856 734 122 3683 2923 2788 135

1979 MANGLA 7 & 8 STEEL MILL GEN. 2524 1746 2014 (268) 528 501 234 267 1111 1046 829 217 4163 3293 3077 216

WARSAR 5 & 6

1980 TARBELA 5 to P 3224 2166 2233 (67) 528 501 259 242 1111 1046 930 116 4863 3713 3422 291

1981 MGLTAN GT STATION D-1 3424 2352 2A36 (84) 528 501 287 214 1311 1236 1040 196 5263 4089 3763 326

1982 SANIWAL GT 3524 2445 2650 (213) 528 501 320 181 1311 1236 1163 73 5363 4182 4141 41

1983 TARBELA 9 to 12 LAHERA COAL 4224 2865 2923 (58) 528 501 354 147 1551 1456 1300 156 6303 4822 4577 245

1984 NUCLEAR STATION D-2 4824 3435 3190 245 528 501 384 117 1851 1741 1448 293 7203 5677 5022 655

1985 HJCLEAR 4824 3435 3487 (52) 528 501 419 02 2451 2311 1619 692 7803 6247 5525 722

1986 NDCLEAR 5424 4005 3802 203 528 501 458 43 2451 2311 1791 520 8403 6817 6051 766

PAKISTAN

WATER AND5 POWER DEVELOPMENT AUTHORITY (WAPOA)

POWER WING


TABLE OF INSTALLED CAPACITY SEPTEMBER CAPABILITY, SEPTEMBER PEAK AND SEPTEMBER RESERVE

(TOTAL PAKISTAN)

GENERATION ADDITION NORTHERN AREA CENTRAL AREA SOUTHERN AREA TOTAL PAKISTAN

SEPT. SEPT. SEPT. SEPT.INSTALLED CAPARI- SEPT. SEPT. INSTALLED CAPABI- SEPT. SEPT INSTALLED CAPABI- SEPT. SEPT. INSTALLED CAPARD- SEPT. SEPT.NORTHERN CENTRAL SOUTHERN CAPACITY LITY PEAK RESERVE CAPACITY LITY PEAR RESERVE CAPACITY LITY PEAK RESERVE CAPACITY LITY PEK RESERVEAREA AREA AREA NW MW MW MW MW MW 2TI 5MW MW MW MW MW BW NW NW NW

1973 1144 1164 1318 (154) 98 93 L10 (17) 586 552 464 88 1828 1809 1892 (83)1974 YANGLA 5 & 6 CUDDU I & 2 1344 1400 1474 (74) 318 301 140 161 586 552 525 27 2248 2253 2139 1141975 LYALLPUR GT 1544 1586 1615 (29) 318 301 158 143 586 552 598 (46) 2448 2439 2371 681976 KARACHI GT 1544 1586 1784 (198) 318 301 1R6 115 686 645 676 (31) 2548 2532 2646 (114)1977 TARBELA I to 4 KORANGI 4 2244 2386 1965 421 318 301 , 212 89 811 763 764 (1) 3373 3450 2941 5091978 MANGLA 7 & 8 GUDDU 3 KoTEI GT 2524 2702 2169 533 528 501 242 259 911 856 860 (4) 3963 4059 327i 788

WARSAK 5 & 6

1979 TARBEIA 5 A 6 STEEL MILL GEN. 2874 3102 2380 722 528 501 266 235 M11 1046 971 75 4513 4649 3617 10321980 TAR3ELA 7 6 B STATION D-1 3224 3502 2610 892 528 501 296 205 1311 1236 1090 146 5063 5239 3996 12431981 MULTAN CT 3424 3688 2841 847 528 501 328 173 1311 1236 1220 16 5263 5425 4389 10361982 SAHIWAL GT LAHKRA COAL 3524 3781 3097 684 528 501 364 137 1551 1456 1362 94 5603 5737 4823 9141983 TAR8ELA 9 tE 12 STATION D5-2 4224 4581 3381 1200 528 581 402 99 1851 1741 1523 218 6603 6823 5306 15171984 NUCLEAR 4824 S1)1 3679 1472 5CR 501 436 65 1851 1741 1698 43 7203 7393 5813 15801985 NUCLEAR 4824 5151 3992 1153 528 501 479 22 2451 2311 1898 4L3 7303 7963 6369 15941986 NUCLEAR 5424 5721 4320 1401 528 501 525 (24) 2451 2311 2120 191 8403 8533 6965 1568

_ ,

Anne 4

antait~~~~~~~~~~~~~~~~ 8~g I t 2 pa,

fotte *od lo mr t Atlsnitt (WAP3

SWEONs IIW. P PSOTUCT

(is Is Sllit .MMae ottets. odCLoatd)Rate of Eochngo: U7551 Ra 9.90

YTe of Sect. f ------- ProJ ct Coatructit Period ---- --- Sob-Tta1 TotalTotal Inotaled Cads- Pori4D Proj. Coret. 1975/76-

Fian . ersBo Eding Jots 30: Coat GeeaCtity sioft jiumac 1975/76 1976/77 1977/78 1978/79 1979/80 Period 1980/81 1981/82 1901/82

1. GENOERATION

1. ISntta (Gas T-tbin) 25H 1975 GerayFo.eign 46.0 3.0 - - - - 3.0 - - 3.0Lnoal 31.0 1.0 _ - - - 1.0 - _ 1.0

Total 77.0 4.0 - - - - 4.0 - - 4.0

2. Goddu (St-) 210Ht7 1977 n..lsaF-raisn 480.0 191.0 176.6 55.7 - - 423.3 - 423.3

tenet 430.0 103.0 119,4 59.7 8 _ 284.1 - - 284.1Tazle 900.0 296.0 146 ur - - 707. - 707.4

3. fetri (Gee Toobi-) IOO19 1977 -For.is. 200.0 - 40.0 160.0 - - 200.0 - _ 200.0

Lonal 100.0 - 30.0 70.0 - _00 100.0Total 300.0 - 70.0 230.0 - - 300.0 - - 300.0

4. LyolIp-r (Gas Tobi-e) 200Ht7 1975 OancyForIgn 242.0 - - - -

L...a 158.0 75.8 - - - 75.8 - - 75.0Total 400.0 75.8 - - - 75.8 - 75.8

5. Moltn (Gla T-rbitn) 2009t7 1981or -iotelc 400.0 - _ _ _ 100.0 100.0 300.0 - 400.0Gldd Ltonal 250.0 - - - - 50.0 50.0 300.0 - 250.0

Total 650.0 - - - - 150.0 150.0 500.0 - 650.0

6. Lkara (Stc_/CGol) 240HW 1988 3For.ion 700.0 - - - - 140.0 140.0 140.0 200.0 480.0tenet 300. - - --40.0 40.0 40.0 100.0 100.

Total 1,000.0 - 180.0 190.0 180.0 300.0 660.0

7. Man.le 7/8 (Hydra) 200Ht 1978 AOBroreten 164.0 70.0 50.0 32.0 - 152.0 - - 152.0Lonel 90.0 30.0 20.0 32.0 - B 82.0 - - 82.0

. Total 254.0 100.0 70.0 64.0 _ 234.0 - - 234.0

8. W-reak 5/6 (Hydro) 8O2D7 1979 CondoP..orla 78.7 40.0 20.0 18.7 _ _ 78.7 - _ 78.7Local 27.6 10 10.0 5.1 - - 25.1 2 - 35.1

Total 106.3 50. 30.0 23.8 - - 103.8 - - 103.8

9. T-fble 1-4 (Hydro) 700HW 1976 Japee-roiga 359.7 110.0 36.3 - - - 146.3 - - 146.3

L-ocl 133.7 40.0 16.4 - . 56.4 - - 38.4Total 493.4 130.0 32.7 - 202.7 - - 002.7

10. Tarblo 5-8 (Hydro) 70098W 1979 A1d (5/6)Fo-oi8r 800.0 200.0 200.0 150.0 90.0 80.0 720.0 77.5 - 797.5Lonal 650.0 100.0 100.0 150.0 60.0 60.0 470.0 159.3 6 429.3

Total 1.450.0 300.0 300.0 300.0 150.0 140.0 ,190.0 236.8 - 1,426.8

11. Terbela 9-12 (Hydro) 700HW 1983Foreign 1,150.0 - - - 100.0 200.0 300.0 200.0 200.0 700.0tonal 1,000.0 - - - 100.0 130.0 230.0 150.0 130.0 150O.

Total 2,150.0 - - - 200.0 350.0 550.0 350.0 350.0 1,250.0

12. F-lab-gb (Hydro) bonto 1,209MM aboot 1987Foroign 2,000.0 -- - - 200.0 200.0 400.0

tonal 2,000.0 - - - - - - 100.0 100.0 200.0Total 4.000.0 300.0 300.0 600.0

13. Sobi4 l (Ga T-nbino) LOW 1982 -

00 FPori"o 225.0 _ - - - 100.0 125.0 225.0

Guddo tonal 125.0 - - - - - - 30.0 75.0 125.0Total 350.0 - O - O - - - 000.0 200.0 350.0

TOTAL G0E80ATI0OForeIgn 614.0 522.9 416.4 190.0 520.0 2,263.3 1,017.5 725.0 4,005.8tonal 361.8 295.8 316.8 180.0 30. 1434 699.3 425.0 2.558.7

Total 973. 818.7 Z733.3 300.0 8200 67.7 676. 110._834.0

May 15, 1975-evia-d Aegost 25, 1975

A-ex 4

PAKISTAN Pae 2 of 2 pegW. eae. d Poer kelorem A.tboritr (WAFOA1

SECOND WUADJ PO?W PRJECTInneOtonit frdori

(i. Re illion onlIs otheevi.e indicatnd)Rate of E-chaDp: US$I-Re 9.90

Year of Source of - P-roe-ct Co..trtuc ion Period -------- - Sub-Total Tot.SFi .. I Ye. Ecdig J- 30. Total I.tolled Coic- Foreign Proj. coc... 1975t 76_Coot Canacitv *.ino pia 197./76 1976/77 1977/78 1978/79 1979/80 Period 1980/81 1981/82 198118211. TRANSMISSION

1. North-rn Zone Lin.. E.ten.ioc(M .. lO 5-8) 1976 v-iooe

Fo. ign 149.0 4010 18.0 58.0 _ _ 58.0Locd 131.0 60.0 22.6 - - - 82.6 8 _ 82.6T.tel 280.0 100.0 40.6 - - ' 140.6 - - 140.6

2. 22o-kV Double Cirtuit T _obela-Wleh 1976 Chin.F-riio 58.1 42.7 10.3 - -- 53.0 -- 53.0Loc-l 30.6 18.1 5.6 - _ _ 23.7 _ _ 23.7Total 88.7 60.8 15.9 - 76.7 _ _ 76.7

3. 220-kV G.uddu-Sibi-Quatta(132 kV SutorlinkI - 1976 -

1 ureiik 60.0 50.0 3.0 - - _ 53.0 _ _ 53.0219.0 110.0 717.3 - - 187.3Total 279.0 160.0 80.3 - 240.3 - - 240.3

4. Firet 500 kV Tarbela-LYCIoor - 1977 CanadaForeign 263.2 10.0 04.1 - _ _ 94.1 _ - 94.1Local 266.4 10.0 110.1 _ - - 120.1 - - 120.1

Total 529.6 2O.O 194.2 - - _ 214.2 _ - 214.2

5. S.cond 500GkV Tarb.l-Lrllpur - 1979 -Foreign 900.0 - - 200.0 200.0 200.0 600.0 - _ 600.0Local 800.0 - - 200.0 200.0 200.0 600.0 _ - 600.0Total 1,600.0 _ - 400.0 400.0 400.0 1,200.0 _ _ 1,200.0

6. 200-tV Tarble-Mrdan - 1978 _Pocaign 35.0 10.0 20.0 5.0 - - 35.0 _ _ 35.0Local 40.0 10.0 20.0 10.0 _ _ 40.0 - - 40.0Tote1 75.0 20.0 40.0 15.0 - -75.0 -- 75.

7. 500-kV Lyallur-.Gddo-Kana-hi - v-rio. (Back d KaitForeign 1,535.0 D-nelop-act Fund) 10.0 200.0 250.0 250.0 250.0 960.0 150.0 425.0 1,535.0L.ocal 1.515.0 00.0 200.0 300.0 300.0 300.0 1,110.0 200.0 505.0 1,015.0Total 3,350.0 -.0.0 400.0 550.0 550.0 550.0 2,070.0 350.0 930.0 3,350.0

9.T--I.nieoi D-1eloM.t OCanluir 1977-5. Foren-ell-i° - ig P20.0O 1977 _ 10.0 10.0 - - - 20.0 - - 20.0Local 40.0 I0.0 17.5 - - - 37.5 - - 37.5Toctl 60.0 30.0 27.5 - - -57. 57.5

9. Grid ienlrto Tribal Area. 19768Forignt 10.0 5.0 S.0 - _ _ 10.0 _ - 10.0L..al 20.0 5.5 15.0 4.0 I 9. 19.5Total 30.0 I0.5 15.0 4.0 _ - 29.5 _ - 29.5

13. Secondary Traenleeloc Lit..an_ rd Scaine-LFiO

Fed G 150.0 200.0 250.6 250.0 400.0 1,250.0 400.0 400.0 2,050.0Loal 350.0 400.0 450.0 550.0 500.0 2.250.0 600.0 600.0 3,450.0taolT - 500 600.0 7600.0 900.0 900.0 3,500.0 1,000.0 5,500.0

TOTAL, TRAN8h'1550N000-- 327.7 550.4 705.0 700.0 850.0 3,133.1 700.0 675.0 4,509.1Local 593.6 863.1 964.0 1,050.0 1,000.0 4,470.7 1,000.0 905.0 k.375.'

7oti u920.3 1,413.5 1,669.0 1.750.0 1.850.0 7,603.8 10700.0 1,580.0 10,883.8

III. RISTRIBUTIONF.-ig. 25.0 35.0 45.0 55.0 70.0 230.0 80.0 100.0 410.0Lrorl 475.0 565.0 0D5.0 845.0 1,130.0 3.720,0 1,270,0 1,500.0 6,490.0

500.0 600.0 750.0 9000 120. .90. 3500 ,600 6,900.0

IV. MISCELLANEOUS

F-raig. - 10.0 15.0 15.0 15.0 55.0 15.0 15.0 05.0Local 15.0 20.0 20.0 20.0 20.0 95.0 20.0 20.0 135.01l5.0 30.0 .0 35.0 35.0 150.0 3.0 35.0 220.0

TOTAL INVESTMNT WAPDjA POWER WING

Foreign 966.7 1,119.3 1,181.4 960.0 1,455.0 5,681.4 1,812.5 1,515.0 9,008.9Local 1.445.4 1,743.9 2005.8 2.075,0 2,450.0 9.720.1 2,989.3 2.850.0 15,559.42,412.1 2.862.2 3.187.2 3,035,0 3,905.0 1401 . 3650 24,56a,3

V, TRANSFER POWER 0MPOtNENT SCARP"

Loc l 2u9.0 351.1 445.0 450.0 575.0 2.070.1 600.0 640.0 3,310.1249.0 351.1 445.0 450.0 575.0 20701 600 6 40.0 3,310.1

TOTAL It9V80TOINTS

LForIgn 966.7 1.118.3 1,181.4 960.0 1,455.0 5,661.4 1,012.5 1,515.0 9,008.9Lor- 1,694.4 2,095.0 2,450.8 2.525.0 3,025.0 11,790.2 3,589.3 3,490.0 1S9.69.5TOTAL 2.6o1.1 3.213.3 3,632.2 3;485.0 4.4BO.0 17,471.6 5,401.5 5.005.0 27,878.4

loay 15, 1975Ravi-ed AugoSt 25, 1975

ANNEX 5Page 1

PAKISTAN

Water and Power Development Authority (WAPDA)Second WAPDA Power Project

ACT, 1958(as amended)

CHAPTER IPreliminary

Short Title and Extent

1. (1) This Act may be called the Pakistan Water and Power Develop-ment Authority Act, 1958.

(2) It extends to the whole of Pakistan except the FederalCapital and the Special Areas.

Definition

2. In this Act, unless there is anything repugnant in the subject orcontext:

(i) "Authority" means the Pakistan Water and Power DevelopmentAuthority established under section 3 of this Act;

(ii) "Chairman" means the Chairman of the Water and PowerDevelopment Authority;

(iii) "controlled station" means a power generating stationdeclared as a controlled station under clause (iv) ofsub-section (1) of section 11;

(iv) "Government" means the Government of Pakistan;

(v) "land" includes benefits to arise out of land, and thingsattached to the earth or permanently fastened to anythingattached to the earth;

(vi) "local body" means any District Board, District LocalBoard, Municipal Corporation, Municipal Committee,Municipality, Small Town Committee or Notified AreaCommittee;

ANNEX 5Page 2

(vii) "Member" means Member of the Water and Power DevelopmentAuthority;

(viii) "power" includes hydraulic power, electrical energy, steam,gas or any other power notified as such by the Governmentin the Official Gazette; and

(ix) "Regulations" means Regulations framed under this Act.

CHAPTER IIConstitution of the Authority

Constitution of the Authority

3. (1) There shall be established an Authority to be known as theWater and Power Development Authority for carrying out thepurposes of this Act.

(2) The Authority shall be a body corporate, shall be entitledto acquire and hold property, shall have perpetual succes-sion and a common seal and shall by the said name sue andbe sued.

Appointment and Term of Office of Chairman Members

4. (1) The Authority shall consist of a Chairman and not more thanthree Members appointed by the Government;

Provided that till such time as the Authority is fully constituted,the Chairman shall exercise the powers, functions and duties ofthe Authority.

(2) The term of the office of the Chairman shall be five yearsand that of a Member three years.

(3) Any person ceasing to be the Chairman or Member by reasonof the expiry of the term of his office shall be eligiblefor reappointment for another term or for such shorterterm as the Government may decide.

(4) The Chairman or any Member may at any time resign.

Provide that his resignation shall not take effect until acceptedby the Government.

ANNEX 5Page 3

Remuneration and Conditions of Service

5. The Chairman and each Member shall receive such salary and al-lowance and be subject to such conditions of service as may be prescribedby the Government, and shall perform such duties as are assigned to themunder this Act or by any Regulation framed under it.

Removal of Chairman and Members

6. The Government may by notification remove the Chairman or anyMember:

(a) if he refuses or fails to discharge or becomes in theopinion of the Government, incapable of discharginghis responsibilities under this Act; or

(b) if he has been declared insolvent; or

(c) if he has been declared to be disqualified for employmentin, or has been dismissed from the service of Pakistan,or has been convicted of an offence involving moralturpitude; or

(d) if he has knowingly acquired or continued to hold withoutthe permission in writing of the Government, directly orthrough a partner, any share or interest in any contractor employment with or by or on behalf of the Authority,or in any land or property which, in his knowledge, islikely to benefit or has benefited as a result of theoperation of the Authority.

Meetings of the Authority

7. (1) The Authority shall meet at such time and place and in suchmanner as may be prescribed by Regulations:

Provided that until Regulations are made in this behalf, suchmeetings shall be convened by the Chairman.

(2) The Chairman, or in his absence a Member authorized byhim, and one other Member shall be present to constitutea quorum at a meeting of the Authority.

ANNEX 5Page 4

CHAPTER IIIPowers and Duties of the Authority

General Powers and Duties of the Authority and Framing of Schemes

8. (1) The Authority shall prepare, for the approval of theGovernment, a comprehensive plan for the developmentand utilization of the water and power resources ofPakistan on a unified and multipurpose basis.

(2) The Authority may frame a scheme or schemes for thecountry or any part thereof providing for all or anyof the following matters, namely:

(i) irrigation, water-supply and drainage; andrecreational use of water resources;

(ii) the generation, transmission and distributionof power; and the construction, maintenanceand operation of power houses and grids;

(iii) flood control;

(iv) the prevention of waterlogging and reclamationof waterlogged and salted lands;

(v) inland navigation; and

(vi) the prevention of any ill-effects on public healthresulting from the operations of the Authority.

(3) Every scheme prepared by the Authority under sub-section(2) shall be submitted for approval to the Government,with the following information:

(i) a description of the scheme and the manner of itsexecution;

(ii) an estimate of costs and benefits; the allocationof costs to the various purposes to be served bythe scheme and the amounts to be repaid by thebeneficiaries; and

(iii) a statement of the proposals by the Authority forthe resettlement of rehousing of persons likely tobe displaced by the execution of the scheme.

ANNEX 5Page 5

(4) The Government may sanction or may refuse to sanction,or may return for reconsideration any scheme submittedto it under this section, or may call for such furtherdetails or information about the scheme, or may directsuch further examination of the scheme as it may considernecessary.

Schemes Framed by Other Agencies

9. (1) Any scheme framed by an agency in Pakistan, other than theAuthority, in respect of any other matters enumerated insub-section (2) of section 8, if its estimated costexceeds the amount to be prescribed by the Government,shall be submitted to the Government through the Authorityand the Government may pass any of the orders contem-plated by sub-section (4) of section 8.

(2) The Authority may, with the approval of the Government,undertake the execution of any scheme, or exercisetechnical supervision and administrative and financialcontrol over the execution of any scheme framed or spon-sored by any agency in respect of the matters enumeratedin sub-section (2) of section 8.

Notwithstanding anything contained in this Act, the Authority may,with the previous approval of the Government, undertake the execution of anyscheme framed or sponsored by the Central Government or any agency other thanan agency in Pakistan, or exercise technical supervision and administrativeand financial control over the execution thereof on such terms and condi-tions as may be agreed to by the Authority on the one hand and the CentralGovernment or such agency in consultation with the Central Government on theother, as the case may be.

Survey and Experiments

10. The Authority, if it considers this necessary or expedient forcarrying out the purposes of this Act, may:

(a) cause studies, surveys, experiments or technical researchto be made; or

(b) contribute towards the cost of any such studies, surveys,experiments or technical research made by any other agency.

lOA. On and from such date as the Government may, by notification, de-clare and subject to such terms and conditions as it may determine, allassets including lands, works, machinery, apparatus, material and plantsvested in the Government in the Electricity Department shall vest in theAuthority, and all liabilities in respect of the said assets shall be theliability of the Authority.

ANNEX 5Page 6

Control over Waters, Powerhouses and Grids

11. (1) Subject to the provisions of any other law for the timebeing in force, the Authority:

(i) shall have control over the:

(a) underground water resources of any regionin Pakistan;

(b) operation of all powerhouses and grids,including such ancillary works as may beconsidered necessary for the proper operation;

(ii) may make recommendations to the Government for pre-scribing standards for the:

(a) operation and maintenance of all irrigationworks;

(b) maintenance of powerhouses and grids.

(iii) may make recommendations to the Government for pro-moting simplification of methods of charge for sup-plies of electricity and standardization of thesystem of supply;

(iv) may, with the prior approval of the Government andon payment of reasonable compensation, declare anypower generating station belonging to a licensee tobe a controlled station and thereupon, the powerto regulate production from such station, shall vestin the Authority;

(v) may require the owner of any controlled power generatingstation in a grid area to:

(a) supply to the grid all or part of the powergenerated at the station at such rates as maybe determined by the Government by generalor special order;

(b) take from the grid all or part of the powerrequired for distribution to consumers; or

(c) close down the station on payment of reasonablecompensation.

ANNEX 5Page 7

(2) Before the Authority exercises any control under clause(i) of sub-section (1), the area over which and the extentto which control is intended to be exercised shall be agreedto and notified by the Government in the Official Gazette.

(3) Nothing in this section shall entitle the Authority toexercise any power in respect of works, powerhouses orgrids owned by the Federal Government and establishedfor the exclusive use of any department of the FederalGovernment or of a Military Cantonment.

Authority to have Powers and Obligations of Licensee under Act IX of 1910

12. IX of 1910 - The Authority shall, for the purposes of the Elec-tricity Act, 1910, be deemed to be a licensee and shall have all the powersand discharge all the obligations of a licensee under the said Act;

Provided that nothing in sections 3 to 11, subsection (2) and (3)of section 21 and sections 22, 23 and 27 of in clauses I to XII of theSchedule to the said Act relating to the duties and obligations of a licenseeshall apply to the Authority.

Powers regarding Certain Matters

13. (1) The Authority may take such measures and exercise such powers asit considers necessary or expedient for the carrying out of thepurposes of this Act.

(2) Without prejudice to the generality of the power conferredby the preceding sections and the provisions of sub-section(1) of this section, the Authority may for carrying out thepurposes of this Act:

(a) undertake any works, incur any expenditure, procureplant, machinery and materials required for its useand enter into and perform all such contracts as itmay consider necessary or expedient;

(b) acquire by purchase, lease, exchange or otherwise anddispose of by sale, lease, exchange or otherwise anyland or any interest in land;

(c) place wires, poles, wall brackets, stays, apparatusand appliances for the transmission of electricity orfor the transmission of telegraphic of telephoniccommunications necessary for the proper execution ofa scheme;

ANNEX 5Page 8

(d) direct the owners of private lands to:

(i) carry out measures for training of streams;

(ii) undertake anti-erosion operations, includingconservation of forests and re-aforestation;

(e) restrict or prohibit by general or special order theclearing and breaking up of land in the catchment areaof any river;

(f) direct that any work which has been required to be doneby any person under the two preceding clauses, andwhich remains undone, shall, after due notice to suchperson and consideration of any objection raised by him,be executed by the Authority and specify the proportionin which the risk and expense of such works shall beborne by such person, or by any other person who, afterbeing given a reasonable notice and after such inquiryas the Authority considers necessary, is held by theAuthority to be responsible for the execution of suchwork in whole or in part; and

(g) seek and obtain advice and assistance in the preparationor execution of a scheme from any local body or agencyof the Government, and such local body or agency shallgive the advice and assistance sought by the Authorityto the best of its ability, knowledge and judgement;

Provided that the Authority shall pay the cost of such advice andassistance if the giving of such advice and assistance entails additionalexpenditure to the local body or the agency.

(3) The acquisition of any land or any interest in land for theAuthority under this section, or for any scheme under thisAct, shall be deemed to be an acquisition for a publicpurpose within the meaning of the Land Acquisition Act, 1894,and provisions of the said Act shall apply to all suchproceedings.

Right of Entry

14. (1) The Chairman or any person authorized by him in writing mayenter upon and survey any land, erect pillars for the de-termination of intended lines or work, make borings and ex-cavations and do all other acts which may be necessary forthe preparation of any scheme;

ANNEX 5Page 9

Provided that when the affected land does not vest in the Authority,

the power conferred by this sub-section shall be exercised in suchmanner as to cause the least interference with, and the least damage

to, the rights of the owner thereof.

(2) When any person enters into or upon any land in pursuanceof sub-section (1), he shall at the time of entering or as

soon thereafter as may be practicable, pay or tender pay-ment for all necessary damage to be done as aforesaid, and

in case of dispute as to the sufficiency of the amount sopaid or tendered, the dispute shall be referred to the

Deputy Commissioner of the district whose decision shall

be final.

Sanction of the Government

15. A scheme framed and sanctioned under this Act may be amended or

modified by the Authority at any time, but if a material change is made in

the scheme, previous sanction of the Government shall be obtained.

Explanation. An increase in the cost of the scheme by more than

fifteen per cent of the sanctioned cost, or a change in the benefit and cost

ratio which either makes the cost component in the ratio exceed the benefits

or reduces the benefits component by more than fifteen per cent shall be

deemed to be a material change for the purpose of this section.

Arrangement with Local Body or other Agency

16. (1) As soon as any scheme has been carried out by the Authorityor at a later date, the Authority may arrange by a writtenagreement with a local body or other agency within whosejurisdiction any particular area covered by the scheme lies,to take over and maintain any of the works and services in

that area. If the Authority fails to obtain the assent of

such a local body or other agency, it may refer the matterto the Government, and the Government may give such directionsto the local body or other agency as it may deem fit.

(2) The Government shall have the power to direct the Authority

to hand over any scheme other than a power scheme or thepower part of a multipurpose scheme carried out by it toany agency of the Government or a local body. In such a casethe Authority shall be entitled to receive credit to theextent of the audited expenditure incurred by it on that

scheme.

ANNEX 5Page 10

CHAPTER IVEstablishment

Employment of Officers and Servants

17. (1) The Authority may from time to time employ such officers andservants, or appoint such experts or consultants, as it mayconsider necessary for the performance of its functions, onsuch terms and conditions as it may deem fit:

Provided that all persons serving in connection with the affairs ofthe Province in the Electricity and Irrigation Departments shall beliable to serve under the Authority, if required to do so by theGovernment, on such terms and conditions as the Government may, inconsultation with the Authority, determine but shall not be en-titled to any deputation allowance.

Provided further that the Government may, in relation to any suchperson as aforesaid, delegate such administrative, disciplinaryand financial powers to the Authority as the Government may deemfit:

Provided also that the terms and conditions of service of anysuch person as aforesaid shall not be varied by the Authority tohis disadvantage.

(1-A) Notwithstanding anything contained in Sub-Section (1) or anyrules made, or orders or instructions insued, by authority orin terms and conditions of service of any person employed by,or serving under the Authority, the Authority may, at any time,remove from its service any person without assigning any reasonafter giving him not less than 30 days notice or pay for theperiod by which such notice falls short of 30 days.

(1-B) Service under the Authority is hereby declared to be serviceof Pakistan and every person holding a post under the Authoritynot being a person who is an deputation to the Authority fromany province shall be deemed to be a civil servant for thepurposes of the Service Tribunals Act.

(2) The Chairman, in case of urgency, may appoint such officersand servants on such terms and conditions as may be necessary;

Provided that every appointment made under this sub-section shallbL reported to the Authority without reasonable delay.

ANNEX 5Page 11

(3) Notwithstanding anything contained in sub-sections (1) and(2), no person shall be appointed to the post of legaladvisor to the Authority, by whatever designation calledor known, or to advise the Authority in regard to legalmatters save with the approval of Government, and no legalpractitioner shall be entrusted by the Authority with anymatter pending in any civil, revenue or criminal court ora tribunal exercising civil or revenue powers in which theAuthority is a party or has any interest, unless the nameof such legal practitioner is on the approved list ofGovernment.

Recruitment and Conditions of Service and Disciplinary Powers

18. The Authority shall preirribe the procedure for appointment andterms and conditions of service of its officers and servants, and shall becompetent to take disciplinary action against its officers and servants.

Immunity of the Authority and its Employees

19. (1) The Chairman, Members, officers and servants of the Authorityshall, when acting or purporting to act in pursuance of anyof the provisions of this Act, be deemed to be public servantswithin the meaning of section 21 of the Pakistan Penal Code.

(2) No suit, prosecution or other legal proceedings shall lieagainst the Authority, the Chairman, Members of officersand servants of the Authority in respect of anything doneor intended to be done, in good faith under this Act.

Delegation of Powers

20. The Authority may by general or special order delegate to theChairman, a Member or officer of the Authority any of its powers, duties orfunctions under this Act subject to such conditions as it may think fit toimpose.

CHAPTER VReports and Statements

Submission of Yearly Reports and Returns

21. (1) The Authority shall submit to the Government, as soon aspossible after the end of every financial year but beforethe last day of September next following, a report on theconduct of its affairs for that year.

ANNEX 5Page 12

(2) A copy of the report mentioned in sub-section (1), togetherwith a copy of the audit report referred to in section 28shall be placed by the Government Assembly and the Assemblyshall refer the same to its Committee on Public Accountsfor scrutiny and examination.

(2-A) The Committee on public accounts shall scrutinize and examinethe reports referred to it under sub-section (2) in the samemanner as, and shall in respect thereof, perform the samefunctions and exercise the same powers as are required by itto be performed and exercised in respect of appropriationaccounts of the Provincial Government, under report of theComptroller and Auditor General of Pakistan thereon.

(3) The Government may require the Authority to furnish it with:

(i) any return, statement, estimate, statistics orother information regarding any matter under thecontrol of the Authority; or

(ii) a report on any such matter; or

(iii) a copy of any document in the charge of the Authority;and the Authority shall comply with every such requisition.

CHAPTER VIFinance

Authority Fund

22. (1) There shall be a fund to be known as the "Authority Fund"vested in the Authority which shall be utilized by theAuthority to meet charges in connection with its functionsunder this Act including the payment of salaries and otherremunerations to the Chairman and Members of the Authorityand to its officers and servants.

(2) The Authority Fund shall consist of:

(a) grants made by the Government;

(b) loans obtained from the Government;

(c) grants made by local bodies as required by theGovernment;

(d) sale-proceeds of bonds issued under the authorityof the Government;

ANNEX jPage 13

(e) loans obtained by the Authority with the specialor general sanction of the Government;

(f) foreign aid and loans obtained from the InternationalBank for Reconstruction and Development or otherwise,with the sanction of, and on such terms and conditionsas may be approved by the Government; and

(g) all other sums received by the Authority.

Authority to be Deemed to be Local Authority

23. The Authority shall be deemed to be a Local Authority under theLocal Authorities Loans Act, 1914, for the purpose of borrowing money underthe said Act, and the making and execution of any scheme under this Actshall be deemed to be a work which such Authority is legally authorizedto carry out.

Limited Liability

24. The liability of the Government to the creditors of the Authorityshall be limited to the extent of grants made by the Government and the loansraised by the Authority with the sanction of the Government.

Rates for Sale of Power

25. (1) The Authority shall ordinarily sell power in bulk.

(2) The rates at which the Authority shall sell power shallbe so fixed as to provide for meeting the operatingcosts, interest charges and depreciation of assets, theredemption at due time of loans other than those coveredby depreciation, the payment of any taxes and a reasonablereturn on investment.

Maintenance of Accounts

26. The Authority shall maintain complete and accurate books of ac-counts in such form as may be prescribed by it.

Separate accounts shall be maintained for all schemes and trans-actions relating to power.

Annual Statement of Accounts

27. In the month of January each year, the Authority shall submit tothe Government for approval a statement of the estimated receipts and ex-penditures in respect of the next financial year.

ANNEX 5Page 14

Audit

28. The accounts of the Authority shall be audited every year by theComptroller and Auditor-General of Pakistan in such manner as may be pre-scribed by the Government. Copies of the audit report shall be sent tothe Authority, and, with the comments of the Authority, to the Governmentand shall also be available for public inspection. The Authority shall carryout any directive issued by the Government for rectification of an auditobjection.

CHAPTER VII

Regulations

29. For the purpose of carrying into effect the provisions of thisAct, the Authority may, with the approval of the Government, frame suchRegulations as it may consider necessary or expedient.

PAKISTANWATER AND POWER DEVELOPMENT AUTHORITY (WAPDA)

ORGANIZATION CHART

The Auth-riy

| h Cha.re anMember~~~~~~~~~~~~~~~~~~~~~~~~iac ae Pwerte

| gChl_f En . X General |-| Grneral | General Manager C e GrManager Iraermissien and A C Chief Engineer-AanieM e and Die,cor

Stores t Distrlbutin Z 6Generaeien d Grid Sysrem t Chief Acceuntant Wae Precurermen anld Cpordination Cens-rucejen Tarbela

-Chief Engieer -ChieIf EEgingiee ChIef g GrAdLea A Chief Engneer |ief Engineer General Man.gerI Lahoere I Mangl Svstem Operarien CtrcCell M,ster PIeelrg Seefh2. Mclean 2 Hvydre _ 3. Sargodha 3. Theenl Oifreer TranraonEg Pl- g4. Hyd-rWbd and G rids r -. ad Inetg io 5 Pshawar -Directer P. ewer1~ l .5 Qunttay -Chief Engineer Sytem Chief Auditr .eputY Chief En-ef Engera |lo Ma7 Isla-abad Preten-ion and Tele- g Apraa Det Che E e

DlneeO Gen-e-rien c-m-unicatioDirec-er DGswrl- Ge -elermeet Chief Engineer Darbutien Denige Chief Enginer Grid E...

DioDsg reer Cesrinine terene Coeserureiner Directer Pablic Chief Engineer In- | Memtoring Orgaeroafien

C-lr ctor Commer Guddu _ Co . Relations | | Suryeillance l Chief EngineerDirenteriCowmeC.-uddoral Gperaeien Directre Ceseruntionex- Meniterieg

Directe Ciitl 220/500 KV TransTraining lnstitute Weeks Constructi-n missi-n Lien tDiretno Pr,gress*yallpur Director Ceeteufer | | Resideet Rpare- L and Corendlearien

) -| ~~~~~~~~~~~~~~ ~~ ~~Medical Sneer- Dirctr Codmpletiaionts and Finance

Ly.11p.r .di amdi ion

Director gudget Direc~-to General .111m

a. Secrelav I

I 11 . et. 1l 0! Bv a W-d 8.~~ a5a~5

<r. E~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~I

Annex 7Page 1 of 4 pages

PAKISTAN

Water and Power Development Authority (WAPDA)Power Wing


Management and Accounting Consulting Services

I. Scope of the Service

A. Accounting Systems

1. Study of the existing accounting and financial practices withthe objective of designing an accounting system in line withmodern public utility practices;

2. fixed asset classification and system of records includingdepreciation based on the expected useful lives of assets;

3. inventory accounting and control, and stock management;

4. consumer control - metering, billing and collection;

5. accounts payable and accruals;

6. capital expenditure accounting; s

7. cash accounting, management and control;

8. debt management;

9. payroll; and

10. comprehensive financial, accounting and other statisticalstatements (including trial balances, revenue account, balancesheets and cash flows).

B. Other Activities

1. Review of WAPDA's present organizational structure and recommenda-tions on its reorganization particularly with regard to theformation of Area Boards;

2. design of accounting and statistical manuals and charts;

3. evaluation of the existing budgeting and budget control systems(investment and operation) and recommendation on their improvement;


4. recommendations on the gradual implementation of accountingmechanization for part or all of WAPDA's power wing accounts; and

5. training of WAPDA personnel in the application of the newaccounting systems.

II. Work Program

The work program willbe carried out in two phases. During Phase Ithe consultants will review the present status of WAPDA's accountingsystems, make proposals on improvements, where required, and establishand design the necessa-ry accounts, manuals and forms. Phase IT willbe concerned with the implementation of the systems established duringPhase I. The following detailed activities are envisaged:

A. Phase I

1. Review of WAPDA's Organizational Structure

This review will provide the organizational framework on whichthe consultants' suggestions will be based. They will includethe hierarchy and format of the management information systems,the line/staff relationship, the code of accounts, the jobdescription for senior and middle management, the formation ofArea Boards for distribution, and other similar problems.

2. Fixed Asset Accounting

The consultants will compile the register for all existingassets and will make proposals on asset valuation and depreciationrates.

3. Inventory Accounting and Control

As a pre-requisite to establishing a revised system, the patternof stock movements will be reviewed. Based on the results ofthis analysis, a new system will be developed to improverecording, control and accounting of stores. The major objectiveof this exercise is the establishment of an optimum inventorylevel.

4. Consumer Control

A thorough review of the billing and collecting system will becarried out and proposals for improvement made. In reviewingthe current situation of the accounts receivable, particularattention will be paid to the prospects of their collection.

Annex 7Pagc 3 of pq:J,s

5. Accounts Payable and Accruals

The introduction of a reliable system of debt management isimportant in the light of WAPDA's reputation as a trustworthydebtor.

6. Capital Expenditure Accounting

The system envisaged will be related to the investment budgetand budget control, and consequently will include thefollowing criteria:

(i) commitments placed;(ii) expenditures incurred;

(iii) cash flow requirements; and(iv) comparison of original versus revised estimates.

7. Payroll

Review of the existing system and recommendations forimprovements will be made, in particular with a view tofacilitating cost data.

8. Code of Accounts and Accounting Manuals

The accounting system will be documented in the form ofprocedure manuals, incorporating specimen forms and instructionson their use.

Upon completion of Phase I the consultants will issue a comprehensivereport.

B. Phase II

During Phase II the recommendations made in Phase I will beimplemented throughout WAPDA with the help of the consultants.On-the-job training of WAPDA's personnel will form an importantpart. The consultants will submit quarterly reports describingthe achievements of the past quarter and outlining the program ofactivities of the following quarter.

III. Time Schedule of the Services

The assignment is estimated to take 20 months, involving a requirement of92 man-months on the part of the consultants. In detail the followingis envisaged:

Annex 7Page 4 of 4 par-es

Man-Month Time FrameActivity Requirement (Month Number)

Phase I

1. Review of WAPDA's Organi-zational Structure 5 l - 6

2. Fixed Asset Accounting 5.5 1 - 63. Inventory Accounting and

Control 5.5 1-64. Consumer Control 6 4 -

5. Accounts Payable andAccruals 3 6-8

6. Capital Expenditure Accounting 3 8 - 97. Payroll 2 4 - 58. Code of Accounts and

Accounting Manuals 10 4 - 99. Mechanization 3 3 -1110. Training 7 (in part overlapping

with Phase II)6 - 11

Total Phase I 50

Phase II

Implementation and (in part overlappingOn-the-Job Training 42 with Phase I)

12 - 20

TOTAL 92

IV. Assistance by WAPDA Personnel

The consultants will attempt to involve the maximum number of WAPDAemployees in order to:

(i) ensure that as many persons as possible are familiar with theprocedures and systems devised, thereby reducing both thetraining and implementation time subsequently required; and

(ii) minimize the time required for data collection on fixed assets.

V. Consultants' Staff

The consultant will assign four senior and three junior personnel. Threeof the senior personnel will be expatriates, two on a full-time basis(20 man-months each) and one part-time during Phase I (about 6 man-months).The remaining personnel will be local.

ANNEX 8Page 1

PAKISTAN

Water and Power Development Authority (VAPDA)Power Wx'ing

Second WAPDA Power Project

Project Description and Cost Estimate

1. The project is the construction of a 500 kV transmission lineLyallpur to Multan (136 miles) and Multan to Guddu (200 miles), to be operatedinitially at 220 kV, and e 220 kV switching station to be installed at Multanfor interconnection at that point. The interconnection facilities atLyallpur and Guddu are being provided under schemes already under construc-tion by WAPDA. Also included are tools and equipment for construction ofthe line and for the transformer repair bay at Lyallpur (Gatti Substation)as well as the foreign exchange cost of the consultant to design, assistin bid documentation, award of contracts, supervision of construction, andtraining of Pakistani engineers.

2. The line Lyallpur-rNultan-Guddu is required to interconnect thenorthern and central areas in order to make available to the northern areathe surplus power that will be available in the central area with the com-pletion of the Guddu 3 unit of 210 megawatts scheduled for operation late1977 and to provide a market for part of the excess hydro generation availa-ble in the Northern area. The initial operation at 220 kV will be satis-factory until mid 1982 at which time either Tarbela units 9 to 12 or a nu-clear plant will have been completed in the northern area and the magnitudeof power interchanges will require the conversion to 500 kV operation.

3. The project is the first stage of a scheme to interconnect thenorthern, central and southern areas of Pakistan with a 500 kV transmissionline of approximately 630 miles in length from Lyallpur to Karachi withintermediate substations at M4ultan, Guddu and Hyderabad. This intercon-nection will be necessary in order to transmit the excess hydro energy inthe northern area to the central and southern areas during the high watermonths of July, August and September and to firm up the hydro energy in thenorthern area with the thermal energy available in the central and southernareas during the low water months of March, April and May.

4. WAPDA's original plan was to complete a 220 kV double circuittransmission line from Multan to Hyderabad/Karachi by 1979 and then to paral-lel this line with a 500 kV single circuit line to be completed in 1982.Further investigation indicated that the cost of a 500 kV single-circuittransmission line was only approximately 20 to 25% greater than for a 220kV double-circuit transmission line while the carrying capacity of a 500kV single-circuit line operated at 220 kV was nearly the same. However,when the 500 kV single-circuit line is converted to 500 kV operation with

ANNEX 8Page 2

the addition of the 500 kV substations the capacity of the 500 kV single-circuit line is approximately 2.5 times that of a 220 kV double circuit line.Therefore, the decision was made to build the interconnection with 500 kVconstruction, operate initially at 220 kV and convert to 500 kV operationby 1982 or earlier. This would eliminate the need for the proposed 220kVdouble circuit line from Multan to Hyderabad/Karachi and would provide theleast cost solution for the interconnection and for the power developmentof Pakistan.

5. As early as 1966, Stone and Webster recommended voltages higherthan 220 kV for the North to South interconnection. Again in 1972 instudies financed by the Bank, EHV Consultants and Meta Systems, Inc. recom-mended 500 kV as the required voltage for the interconnection between theNorthern, Central and Southern areas to be in operation in 1981 as theleast cost solution to the power development of Pakistan. CIDA has recentlymade available a grant of $900,000 to the Government of Pakistan to studythe routing and costs of the second Tarbela-Lyallpur line.

6. A detailed cost estimate of the project is given below:

ANNEX 8Page 3

PAKISTANWATER AND POWER DEVELOPMENT AUTHORITY (WAPDA)

POWER WINGSECOND WAPDA POWER PROJECT

DETAILED COST ESTIMATE

PAKISTAN RUPEES MILLION US$ MILLION

Local Foreign Duties Total Local Foreign Duties Total

A. TRANSMISSION LINE LYALLPUR-MULTAN (136 miles)

1. Right of Way 2.5 - - 2.5 0.2 - - 0.22. Steel Towers - 47.5 15.2 62.7 - 4.8 1.5 6.33. Conductors - 46.5 14.8 61.3 - 4.7 1.5 6.2

Overhead Groundwire & Counterpoise - 5.0 1.6 6.6 - 0.5 0.2 0.75. Insulators - 15.8 5.1 20.9 - 1.6 0.5 2.16. Hardware - 11.9 3.7 15.6 - 1.2 0.4 1.67. Construction Charges 121.5 - - 121.5 12.3 - - 12.3

Sub-total 124.0 126.7 40.4 291.1 12.5 12.3 4.1 29.4

B. TRANSMISSION LINE MULTAN-GUDDU (200 miles)

1. Right of Way 2.5 - - 2.5 0.2 - - 0.22. Steel Towers - 69.5 22.2 91.7 - 7.0 2.2 9.23. Conductors - 57.5 21.6 89.1 - 6.9 2.2 9.04. Overhead Groundwire & Counterpoise - 7.9 2.5 10.4 - 0.8 0.3 1.15. Insulators - 22.8 7.3 30.1 - 2.3 0.7 3.06. Hardware - 16.8 5.4 22.2 - 1.7 0.5 2.27. Construction Charges 180.0 _ - 180.0 18.2 - - 18.2

Sub-total 182.5 184.5 59.0 426.0 18.4 16.6 5.9 42.9

C. 220 kV SWITCHING STATION AT MULTAN

1. Land 4.0 - - 4.0 0.4 - - 0.42. Structures - 4.0 1.3 5.3 - 0.4 0.1 0.53. Equipment - 50.5 16.2 66.7 - 5.1 1.6 6.7

4. Civil Works 7.9 - - 7.9 0.8 - - 0.8Construction Charges 8.9 8.9 _ 17.8 0.9 0.9 _ 1.8

Sub-total 20.8 63.4 17.5 101.7 2.1 6.4 1.7 10.2

D. TOOLS AND EQUIPMENT - 15.8 5.1 20.9 - 1.6 0.5 2.1

E. TRANSFORM7ER REPAIR BAY AT GHATTI (Lyallpur) 5.0 19.8 6.3 31.1 0.5 2.0 0.6 3.1

F. MISC. BUILDINGS & COLONY AT MULTAN 22.8 - - 22.8 2.3 - - 2.3

C. ENCTNEERING AND SUPERVISION INCLUDINGTRAINING OF PAKISTANI ENGINEERS ABROAD 35.6 36.6 - 72.2 3.6 3.7 - 7.3

Sub-total 63.4 72.2 11.4 147.0 6.4 7.3 1.1 14.8

TOTAL A to C 390.7 446.8 128.3 965.8 39.4 45.1 12.8 97.3

H. ADMINISTRATION AT 4% OF TOTAL COST 38.6 - - 38.6 3.9 - - 3.9

J. CONTINGENCIES AT 10%. 39.1 44.7 12.8 96.6 3.9 4.6 1.3 9.8

J. INLAND FREIGHT, HANDLING AND LOCAL INSURANCEAT 5½¢.% C.I.F. 22.0 - _ 22.0 2.2 - - 2.2

Sub-total 99.7 44.7 12.8 157.2 10.0 4.6 1.3 15.9

TOTAL TRANSMISSION PROJECT 490.4 491.5 141.1 1123.0 49.4 49.7 14.1 113.2

K. ACCOUNTING & MANAGEMENT SERVICE 3.0 3.0 - 6.0 0.3 0.3 - 0.6

GRAND TOTAL 493.4 494.5 141.1 1129.0 49.7 50.0 14.1 113.8

Basic Prices were determined from the present line being constructed 1975/76 Tarbela-Lyallpurwith 1974 materials. As the proposed new lines will be constructed 1977/78 escalation of 15%per year on local costs and 12, 10 and 8% per year on foreign costs are included in the estimate.

------ ------ XAT$R~~~~A= PO-t -

L 6~si p i-lEr7-

i+ ~ ~ T7 _ I -4

RIO tu t am a4-dtA

-I7

Ot~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~-

-Ii I I40&~~~ Ls_ t~~~~2. !furveV i_ [I 4

ANNEX 9



Estimated Schedule of Disbursement

FISCAL YEAR CUMULATIVE DISBURSEMENTAND QUARTER AT END OF QUARTER

tUS$1,000)

1975/1976

March 31, 1976 500June 30, 1976 2000

1976/1977

September 30, 1976 7000December 31, 1976 12000March 31, 1977 18000June 30, 1977 23000

1977/1978


1978/1979


1979/1980

September 30, 1979 49500December 31, 1979 50000

This schedule assumes Loan effectiveness on February 29, 1976.

PAKISTAN

Water and Power Development Authority (WAPDA)Power Wing Rate of Exchange

SECOND WAPDA POWER PROJECT Prior to May 12, 1972 US$1 = Rs 4.76Actual and Forecast Income Statements 1971/72-1981/82 May 12, 1972 - Feb. 15,1973: US$1 - Rs 11.00

Effective February 16,1973 : US$1 = Rs 9.90

(in Rs million unless otherwise indicated)

ACTUAL FORECAST

Fiscal Years Ending June 30: 1971/72 1972/73 1973/74 1974/75 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 198.82

Sales of Energy (GWh) 4,137 4,599 4,742 5,212 6,017 7,097 8,149 9,221 10,612 12,033 13,454

Average Revenues per kWh Sold (paisa) 13.54 13.96 16.27 18.48 23.09 24.25 31.19 34.64 36.38 38.12 37.20

Operating RevenuesRevenues from Sales of Power 560.1 641.9 771.6 963.0 1,389.3 1,721.0 2,541.7 3,194.2 3,860.6 4,587.0 5,004.9

Other Operating Revenues 42.3 39.0 36.5 43.0 44.0 48.0 53.0 58.0 64.0 70.0 77.0

Total Operating Revenues 602.4 680.9 808.1 1,006.0 1,433.3 1,769.0 2,594.7 3,252.2 3,924.6 4,657.0 5,081.9

Operating ExpensesPurchased Power 6.0 8.0 13.0 33.0 25.0 30.0 40.0 40.0 40.0 40.0 40.0

Fuel 86.0 96.0 186.0 337.0 466.2 445.4 410.5 502.0 447.0 539.2 729.4

Operation, Maintenance andAdministration (includingprovision for bad debts andallocation to insurance reserve) 130.2 151.7 207.0 278.0 358.0 411.7 473.5 544.5 626.2 720.1 828.1

Depreciation 145.9 167.9 209.5 259.0 W. 0 .4 522.6 6695 037.0 986. 5 1.135.4

Total Operatiug Expenses 368.1 423.6 615.5 907.0 1,178.2 1,2975 1,446.6 1,756.0 1,950.2 2,285.8 2,732.9

Operating Income 234.3 257.3 192.6 99.0 255.1 471.5 1,148.1 1,496.2 1,974.4 2,371.2 2,349.0

Other Income 63.8 33.9 37.0 13.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0

Interest Expense 136.6 181.0 172.0 260.0 ZSO.0 414.4 483.2 608.6 823.7 882.0 1.057.8

Profit/Loss 161.5 110.2 57.6 48 5.1 87.1 694.9 917.6 3 2519.2 1

Return on Assets taken overfrom Government 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0

Net Profit/Loss 141.5 90.2 37.6 (168.0) L 9) 67.1 674.9 897.6 160.7 1,499.2 13012

Rate of Return on Average Met FixedAssets in Operation 6.57 6.6% 4.1% 1.7% 3.5% 5.1% 9.6% 9.6% 10.0% 10.3% 8.9%

May 15, 1975 s

First Revigion: August 25, 1975 x

Second Revision: January 5, 1976 -

m

Os5

PAKISTAN

Water and Power_Dvelopme nt Authory (WAPDA)Power Wing

SECOND WAPDA POWER PROJECTForecast Sources and Applications of Funds Statements 1975/76-1981/82

Rate of Exchange: UJS$1= Rs 9.90

Fiscal Years Ending June 30: ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~TOTAL.Fiscal Years Ending June 30: 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82 1975/76-1981/82

SOURCES

InternalOperating Income 255.1 471.5 1,148.1 1,496.2 1,974.4 2,371.2 2,349.0 10,065.5Other Income 30.0 30.0 30.0 30.0 30.0 30.0 30.0 210.0Depreciation 329.0 410.4 522.6 669.5 837.0 986.5 1,135.4 4,890.4Return on Assets taken over from Government (20 0) (20.0) ( 20.0) (20 ,( 1 (20.0) (20.0) (140.0)

Gross Internal Cash Generation 594.1 891.9 1,680.7 2,175.7 2,821.4 3,367.7 3,494.4 15,025.9

Debt Service: Interest (354.8) (512.4) (668.2) (848.6) (1,053.7) (1,272.0) (1,457.8) (6,167.5)Amortization (265.5) (186.8) (153.5) (289.2) (233.2) _(327.8' _(_460.3 (1,916.3)

Total Debt Service (620.3) (699.2) (821.7) (1,137.8) (1,286.9) (1,599.8) (1,918.1) (8,083.8)

Net Internal Cash Generation (26.2) 192.7 859.0 1,037.9 1,534.5 1,767.9 1,576.3 6,942.1

ExternualGovernment Equity Contributions 824.5 771.3 230.7 7.6 - - _ 1,834.1Bank Loan 19.8 207.9 158.4 99.0 9.4 - - 494.5Government Loans for Local Component 747.3 1,245.8 1,624.4 1,678.3 1,594.4 1,949.3 2,034.6 10,874.1Goverrmnent Loans for Foreign Component 753.6 686.7 786.7 669.0 1,154.6 1,450.0 1,212.0 6,712.6Direct Foreign Loans and Credits to WAPDA 193.3 223.7 236.3 192.0 291.0 362.5 _303.0 1,801.8

Total External Sources 2,538.5 3,135.4 3,036.5 2,645.9 3,049.4 3,761.8 3,549.6 21,717.1

TOTAL SOURCES 2.512.3 3,328.1 3,895.5 3,683.8 4.583.9 5,529.7 5,125.9 28,659.2

APPLICATIONS

InvestmentsForeign Component 966.7 1,118.3 1,181.4 960.0 1,455.0 1,812.5 1,515.0 9,008.9Local Component 1.694.4 2,095.0 2450.8 ,5250 3025.0 3589.3 18,869.5

Total Investments 2,661.1 3,213.3 3,632.2 3,485.0 4,480.0 5,401.8 5,005.0 27,878.4

Variations in Cash and Other Working Capital (148.81 114.8 263.3 198.8 103.9 127.9 120.9 780.8

TOTAL APPLICATIONS 2,512.3 3,328.1 3,895.5 _83.8 4,583.9 5,529 7 5_125.9 28,659.2

Times Total Debt Service Covered by GrossInternal Cash Generation 1.3 2.0 1.9 2.2 2.1 1.8

a :o

ol.

May 15, 1975First Revision: August 25, .975Second Revision: January 5, 1976

_ter ane ;Power )ev,e9Prunt AULt',- eWAPDA)?_wer Vi-.-

SEC':BI WAP' 32*3Ht P9.J_^1A sa. and torecasc Balance Sheets 1971/72-198liK-

Rate of Lxciange:(i. RE mPlaot) Friar to May 12, 1972 USS1= Rs 4.76

Ma,- 12, 1972-Feb. 15, 1973 US51= Rs 11.00Ef-ecti,e Febr-ary 16, 1973: USSI= Rs 9.90

______________________________________________FORECAST

Fiscal Years Endive Ian- 30. '2 13'74 1974/75 1975/76 1976377 197 , 1978/79 1979/80 1980/81 1981/82

ASSETS

Fixed AssetsCross Fixed Assets ir Overatior 4,706.6 4,998,5 6,546.4 7,937.7 9,929.2 12,593.3 16,334.6 20,993.6 25,903.6 29,538.6 34,406.6Accumulated Depreciation 2(806.4u (974.3) (1,143.8) L 28 (1.771.8) (2,182.2) I2 .

83 374, L f,211.3 197.8) (6, 333.2)

Net F4:,--' oaes - A'eratlor- 3,90^._ 4,0:._ 5,3E-.6 6,t47.9 o,157.4 10,411.1 3,629.8 ,,619.3 _1,692.3 .4,340.8 _8,073.4Work in Progress 978.1 1,210.3 790.7 799.4 _ 2,191. 0 ' 9.' 1.332.' .1.5_ 3,289. 3. 826.7

Total Fixed Assets 4,678.3 5,234,7 6,153.3 7,294.3 9,701.2 12,602.1 15,896.7 9,952.2 22,825.2 2-.630.5 31,900.1

Current Assets

Materials and Supply 267.3 265,5 295.5 242.3 260.0 300.0 330.0 400.0 430.0 450.0 480.0Accounts Receivable 122.6 151.9 16.2 249.5 297.6 565.2 733.6 794.1 913.9 1,036.3 1,158.7Account Water Wing 72.0 157.7 194.1 194.1 20.7 20.0 20.0 20.0 20.0 20.0 20.0Cash and Banks 85.6 134.1 128.6 10.0 10.0 50.0 70.0 90.0 130.0 150.0 190.0Other current Assets 164.2 176.0 184.8 190.0 220.0 230.0 250.0 280.0 310.0 330.0 350.0

Total Pu-r-er A .ae.e 711.7 880.2 989.2 885.9 808.3 I.1652 1. 403.6 1,58 I,803.9 3 2,19B .7

TOTAL ASSETS 5 590.0 71425 10,509.5 13,767.3 173003 20,536.3 24629.1 29616.8 340988

LIABILITIES

Accumulated Government EquityContributions - - - - 824.5 1,595.8 1,826.5 1,834.1 1,834.1 1,834.1 1,834.1

Initial Capital (for Government

Assets taken over on April 1, 1959) 460.5 460.5 460.5 460.5 460.5 460.5 460.5 460.5 460,5 460.5 460.5Warsak Hydro Station (Provisional Valuation) 260.0 262.2 262.2 262.2 262.2 262.2 262.2 262.2 262.2 262.2 262.2Mangla Hydro Station (Arbitrary Valuation) 460.0 460.0 460.0 460.0 460.0 460.0 460.0 460.0 460.0 460.0 460.0Accumulated Profit (Loss) 422.3 512.5 550.2 357.2 320.9 361.5 1,001.

618_54.5 _,962.3 4,399.2 5,627.5

Total Equity 1,602.8 1,695.2 1,732 9 1,539.9 2,328.1 3,140.0 4,010.8 4,871.3 5,979.1 7,416.0 8,644.3

Insurance Reserve - - - - 21.4 47.9 82,7 127.4 1".3 242.6 315.5

Lone-Term Debt 3,585.5 3,956.8 4,855.1 5,990.3 7,438.8 9,616,1 12,268.4 14,617.5 17,433.7 20,867.7 23,957.0

Current Liabilities 401.7 467.9 554.5 650.0 721.2 963.3 938.4 920.1 1.036.0 1,090.5 1,182.0

TOTAL LIABILITIES 5,590.0 6 7.142,5 8.180,2 13.3 17 ,30.3203.3 24,629.1 29.616.8 34 098.8

Debt/Equity Ratio 69:31 70:30 74:2b 80:20 76:24 75:25 75:25 75:25 74:26 74:26 73:27

eo

may 15, 1975 a

First Re,aleaon! August 25, 1975Second Revision: January 5, 1976

PAKISTAN


SECOND WAPDA POWER PROJECTForecast Net Internal Cash Generation and Government Equity Contributions

(in Rs million unless otherwise indicated)

Rate of Exchange: US¢1 - Rs 9.90

Fiscal Years Ending June 30: 1975/76 1976/77 1977/78 1978/79 1979/80 1980/81 1981/82

I. Net Internal Cash Generation (after deductionof interest during construction) (26.2) 192.7 859.0 1,037.9 1,534.5 1,767.9 1,576.3

II. Investments (e _. '.g -:.erest daringconatruction) 2,661.1 3,213.3 3,632.2 3,485.0 4,480.0 5,401.8 5,005.0

1. Net Internal Cash Generationas Percentage of Investments (annual) (1.0%) 6.0% 23.6% 29.8% 34.3% 32.7% 31.5%

2. Net Internal Cash Generationas Percentage of Investments(three-year sliding average) - - 10.8% 20.2% 29.6% 32.5% 32.8%

III. Government Eq-ity Contributions(difference between 30% of investmentand actually achieved percentage) 824.5 771.3 230.7 7.6 - - -

x ID

May 15, 1975First Revision: August 25, 1975 oSecond Revision: January 5, 1976 X

I0

ANNEX 10Page 5

PAKISTAN


Second WAPDA Power Project

Notes and Assumptions on Financial Projections

Sales of Energy

The projected energy sales are a function of expected plant com-missioning rather than estimated market requirements. This is justifiedsince the demand potential is estimated to be higher than WAPDA's capabilityto supply, a situation which is likely to continue for a number of years.The resulting sales increases vary between about 13% and 18% per year.

Average Revenues per kWh Sold

The average revenues include the overall 13.3% tariff increase whichbecame effective on June 7, 1975. Further increases of 20% on March 31, 1977,25% on January 1, 1978 and 10% on January 1, 1980 have been assumed.

Purchased Power

WAPDA purchases power from KESC. Up to March 1975 the pricecharged was 5.5 paisa/kWh plus fuel adjustment. Tentative agreement wasreached with KESC on a price of 7.3 paisa/kWh plus fuel adjustment, retro-active to January 1, 1974. The maximum cost to WAPDA should not exceed itsaverage revenues. The contract, when finally effective, will be valid fortwo years.

Fuel

At the time of appraisal the cost of fuel to WAPDA was as follows:

1. Guddu

(a) Raw Gas : Rs 0.51 per 1,000 cu ft(b) Purified Gas: Rs 6.46 per 1,000 cu ft

In addition the following charges are levied on raw gas:

(a) excise tax : Rs 0.75 per 1,000 cu ft(b) regulating tax: Rs 0.45 per 1,000 cu ft

ANNEX 10Page 6

2. Multan

Gas: Rs 4.36 per 1,000 cu ft plus Rs 1.2 million/monthfixed charge.

3. Lyallpur Steam Station

Gas: Rs 4.36 per 1,000 cu ft plus Rs 0.9 million/monthfixed charge

4. Lyallpur Gas Turbines

Gas: Rs 4.36 per 1,000 cu ft plus Rs 0.78 million/monthfixed charge.

5. Shahdara and Abdullapur (Lyallpur)

Gas: Rs 6.46 per 1,000 cu ft.

6. Sukkur (per month)

Gas: First 4,000 cu ft Rs 7.14 per 1,000 cu ftNext 46,000 - 6.88 " " "

i, 50,000 i " 6.76 IY It"i 50,000 I" 6.64 t " ' "

Over 150,000" " i" 6.52 " " "I

7. Hyderabad and Kotri (per month)

Gas: First 50,000 cu ft ----- Rs 6.64 per 1,000 cu ftNext 50,000 It WI " 6.52 it "r " "1 50,000 i" 6.40 i f"Over 150,000 " " 6.26 " " " "

8. Furnace Oil

Rs 500.00 per ton plus freight. This price is equivalent to aboutUS$8.00/barrel.

9. High Speed Diesel Oil

Rs 5.50 per Imperial gallon.

10. Coal

Rs 337.00 per ton.

The projections assume annual fuel cost increases of 10% to allowfor:

ANNEX 10Page 7

(i) possible increases of domestic prices. Present oilprices in Pakistan are below world market levels andgas price increases planned; and

(ii) the rising share of oil-fired versus gas-fired plant.Oil prices are presently higher than gas prices inPakistan.

Operation, Maintenance and Administration

Increases of 15% per year have been projected. This assumesthat the sharp rise in cost of the recent past will somewhat level off.

Depreciation

WAPDA is presently applying an overall rate of 3.5% per year.This rate has been used in the forecasts.

Allocation to Insurance Reserve

0.2% of net fixed assets in operation starting FY 1975/76.

Debt Service

The data available on debt service for loans and credits incurredbefore January 1975 appear unreliable. It seems that the interest paymentsare too high and the amortization payments too low. Due to lack of morereliable information, the data provided by WAPDA have been used as thebasis for calculating future debt service. For future borrowing the fol-lowing terms have been assumed:

1. Foreign: (a) 20% of the total foreign borrowing requirementas loans and suppliers' credits made directlyto WAPDA. The assumed conditions are 8%interest (interest during the grace periodfinanced from funds of the credits) and a 15years' term including 2 years of grace.

(b) 80% of the total foreign borrowing requirementas loans channelled through the Government atpresent standard terms which are: 4% interest(interest during the grace period not financedfrom funds of the loans), 5 years of grace, and20 years repayment.

2. Local: All local borrowing channelled through the Governmentat present standard terms which are: 8.25% interest(interest during the grace period not financed fromfunds of the loans), 5 years of grace, and 20 yearsrepayment.

ANNEX 10Page 8

Consumers' Contributions

Due to deficient recording no reliable data on consumers' contri-butions are available although such payments are in fact being made. Inthe majority of cases these contributions seem to be recorded directlyagainst asset account. Consequently it can be assumed that the fixed assetsare largely stated net of consumers' contributions.

Annex 11Page 1 f 5 pages

PAKISTAN



Tariffs

As of June 7, 1975 the following tariff applies:

A 1 - Domestic

Residences, hospitals and dispensaries, places of religiousworship, schools, and charitable institutions.

First 20 kWh 25 paisa/kWhBalance 20 " / "Mi-nimum Charge per Month Rs 2.-

A 2 - Commercial

Government and semi-government offices and institutions,commercial establishments such as shops, hotels, restaurants,theatres, and clubs.

First 100 kWh 43.7 paisa/kWhBalance 49.0 it / ti

Minimum Charge per Month Rs 4.-

Industrial

B 1 - Up to 70 kW connected load

General Charge 29.9 paisa/kWhMinimum Charges

Connected load up to 20 kW Rs 6.10 per kW and monthConnected load exceeding20 kW up to 70 kW Rs 8.74 per kW and month

B 2 - Three phase, 400 V, above 70 kW up to 500 kW connected load.

Rs 28.87 per kW and month of declared loadplus 16.8 paisa per kWh.

B 3- Supply at 11 kV

Rs 26.22 per kW and month of declared load plus 16.0 paisa per kWh.


B 4 - Supply at 33 kV, 66 kV or 132 kV.

Rs 24.50 per kW and month of declared load plus 14.6 paisaper unit.

Bulk Supply

(i) Licensees (licensed under part II of the ElectricityAct 1910 to supply energy within their area of supply)and Non-Licensees (permitted under part III of theElectricity Act 1910 to supply energy within theirarea of supply).

(ii) Railways, Cantonment Boards and other approved institutionswith their own distribution facilities.

C 1 - Supply at 400 V.

(i) 18.9 paisa/kWh(ii) Rs 26.50 per kW and month

plus 16.0 paisa/kWh

C 2 - Supply at 11 kV.

(i) 16.0 paisa/kWh(ii) Rs 24.- per kW and month

plus 15.3 paisa/kWh

C 3 - Supply at 33 kV, 66 kV and 132 kV

(i) 15.3 paisa/kWh(ii) Rs 22.54 per kW and month

plus 14.6 paisa/kWh

D. Tubewells

For agricultural tubewells and lift irrigation pumps.

1. Reclamation and drainageschemes under SalinityControl and ReclamationProjects (SCARP) 14.6 paisa/kWh

2. Agricultural tubewellsand lift irrigation pumps(i) in the North-West

Frontier Province Rs 6.- per kW and monthand Quetta Grid areas plus 4.0 paisa/kWh

(ii) in all other areas Rs 7.25 per kW and monthplus 8.5 paisa per unit.


Temporary Supply

E 1 - Domestic and Commercial Supply

(i) Domestic 43.7 paisa/kWh(ii) Commercial 66.1 paisa/AWhMinimum Charge Rs 7.25 per day but not

less than Rs 28.75 forthe period of supply.

E 2 - Industrial and Bulk Supply

(i) Industrial 40.0 paisa/kWh(ii) Licensees

a. at 400 V 25.2 paisa/kWhb. at 11 kV 22.5 paisa/kWh

(iii) Railways, Cantonment Boardsand other approved institutionswith their own distributionfacilities 35.1 paisa/kWh

F. - Seasonal Industrial Supply

125% of the charges for the corresponding supply to a regularindustry, except that the fixed charges per kilowatt per monthshall be recovered on the basis of the declared load for theperiod a seasonal industry actually runs, subject to a minimumperiod of six consecutive months during any twelve consecutivemonths period.

G. - Public Lighting

a. Supply Charges for the electricenergy consumed. 33.7 paisa per unit

b. Fixed Line Charges per monthand mile:(i) entire capital cost for laying

street lighting supply linesis borne by WAPDA; Rs 64.-

(ii) entire capital cost inlaying street lightingsupply lines is borne bythe Local Body; Rs 5.69

(iii) capital cost in layingstreet lighting supply linesin addition to the existingdistribution system isborne by WAPDA ; Rs 40.-


(iv) capital cost in laying streetlighting supply line over theexisting distribution systemis borne by the Local Body; and Rs 8.10

(v) street lighting supplythrough underground cables. Rates to be negotiated.

c. Fixed Lamps and Fixture Charges permonth and capacity of lamp.

1. Ordinary Lamps Provided and Installedby the Authority:

(i) up to 60 watts; Rs 1.32(ii) above 60 watts and up to

100 watts; Rs 1.61(iii) above 100 watts and up to

200 watts; Rs 3.50(iv) above 200 watts and up to

300 watts; and Rs 4.40(v) above 300 watts. Rates on application

2. Fluorescent tubes provided byLocal Body but installed by theAuthority:

all wattages Rs 2.91

3. Special Mercury Vapour LampsProvided by Local Body butinstalled by the Authority

all wattages Rs 4.40

H. Residential Colonies kttached to Premises of Industrial Supplywith their own Distribution Facilities

1. Consumers providing their owntransformers 27.1 paisa/kWh

2. Consumers not providing their owntransformers 27.7 paisa/kWh


I. Fuel Adjustment Clause(A-s included in the letter of the Joint Secretary, Ministry of Fuel,Power and Natural Resources dated November 3, 1975 to the ChairmanWAPDA)

Whenever the average cost of fuel in any month resultingfrom the different types and quantities of fuels used by WAPDA forpower generation is more than 720 paisa or less than 711 paisa permillion BTU, the energy charge shall be increased or decreased by.008 paisa per kWh sold for each whole paisa per million BTU above720 paisa or below 711 paisa for energy supplied to all categoriesof consumers except Domestic and Public lighting in the billsissued in the following month.

In addition to above tariff WAPDA collects the following Electricity Dutyon behalf of the regional Governments:

North-WestPunjab Sind Frontier Baluchistan

1. Residential andCommercialConsumption 2.5 paisa/kWh 2 paisa/kWh 2 paisa/kWh 2 paisa/kWh

2. IndustrialConsumption 1.5 paisa/kWh 1 paisa/kWh 0.5 paisa/kWh 0.5 paisa/kWh

3. Consumption bytubewells, ir-rigation andother agri-culturalmachinery 1.5 paisa/kWh 0.5 paisa/kWh 0.5 paisa/kWh 0.5 paisa/kWh

4. UnmeteredConsumption ------------ 4 paisa for every rupee charged --------------

There are various exemptions, for instance for central and provincial Governments;public lighting; mosques, churches and other places of worship; and domesticcustomers with less than 20 kWh consuimption per month.

IBRD11215R

620 66° 70 740 JUNE 1975

PAKISTAN F ANiSTANMAIN POWER STATIONS AND

PRINCIPAL TRANSMISSION LINES J A M M UPROPOSED GliOR UNDER 0

CO NSTRU CT ION EITN UNTIL 1980 EXISTING (Trr

O Grid station or town R AND

500 KV transmission lines MAttk.nd /cease-fire 1,ne

220 KV transmission lines ...... ?....*.*.*.

66/132 KV transmission lines sOMW KMgai r S

-340 * Hydroelectric stations 160M, n 3

A Thermal stations ea ISLAMABAD

* Nuclear power station A RApindi'.

4jUl« Ga fields Kurram Garhhc a IFECoal fields Kua

-'---'~~~~ Rivers KhlRasul G at

-- International boundaries S Shodiwal

.,-.--. 332 MWA ew ahat

AFGHANISTAN ARNA I i C OA

_300 t < COAZ F/fdD,¢e t X Multacvf 5~~~~~~~~~~~~~~~~~.5 MVW-300 0 iW31DEGARI COAL FIELO

9 <. ,_ 0

asMACHARIC0Adf > Si o M200 Bahawalnagar

N '-aIa1 - ' '-'-/' - ' BJ OAZ,hawalhurd O

\ d~~~~~~~~~~~~~~~~lKa at FII N,0 aoo

- X .... ^ g 8 t SU/ -GAS F/ELD j, *7j

- XL 0 << t A ) Jacobabad Rahimyar Khan /A - - ~~~~~~~~~~ ~~~Shikarp &MAI ..

1 f * l) \> J Qambat / ; - t tGAS F/FJD..

2e0_ --'-. V 0 LAKNrA an;g< ,I N D I A

625 MWThf ttamr Thr4

4U6ANISTA j C N

Karachi o IIIIMFIR METING ~ ~ ~ ~ ~ ~ ~ H N

'ffS i? {.ZW; , fi < ~~~~~~~~~~~~~~~T l b o t

Arablon Sea IRAN N A/

BANOLADE

0 100 200 300 400 220-

KILOMETERS Atobiw, Sea

0 ~ 100 200 30,o t_ __o Foo zoo 300 ' \ V ) Boy of BengaJ

MILESMfLANKA

6Z° 66P 700

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