The National Electric Power Regulatory Authority (Nepra) has raised significant concerns regarding Gujranwala Electric Power Company’s (Gepco) ambitious Rs 100 billion investment plan for 2025–2030. During a public hearing, Nepra questioned the feasibility of this plan, highlighting its potential impact on consumers and doubts about Gepco’s execution capabilities. These concerns arise as the government accelerates efforts to privatize key power distribution companies.
| Key Points | Details |
| Total Investment | Rs. 100 billion |
| Privatization Target | By the end of the year |
| Performance Issues | Rising transmission and distribution losses |
| Nepra’s Recommendation | Focus on efficiency and financial discipline |
Contents
Gepco’s Rs 100 Billion Investment Plan
Gepco has proposed a Rs100 billion investment under its Distribution Integrated Investment Plan for fiscal years 2025–26 to 2029–30. This plan aims to modernize electricity distribution systems, reduce losses, and improve reliability. Despite these goals, Nepra has raised concerns over the declining electricity demand and the company’s financial instability. Gepco’s execution of previously approved projects has also been delayed, raising questions about its ability to manage new initiatives.
Privatization of Distribution Companies
The government is moving quickly to privatize major power companies, including Gepco, Islamabad Electric Supply Company (Iesco), and Faisalabad Electric Supply Company (Fesco). This privatization aims to enhance efficiency and reduce financial losses in the power sector. However, Nepra has highlighted that this process may complicate Gepco’s investment strategy, as private operators might alter the company’s priorities.
Nepra’s Concerns About Gepco
Nepra has pointed out several challenges that question Gepco’s capability to manage the proposed investment:
- Transmission and Distribution Losses: Gepco’s losses have been increasing, impacting its revenue and overall efficiency.
- Poor Recovery Rates: During the fiscal year 2023–24, Gepco struggled with low recovery rates, raising concerns about its financial stability.
- Delays in Ongoing Projects: Previously approved projects remain incomplete, casting doubt on Gepco’s ability to deliver on its new commitments.
Potential Burden on Consumers
Nepra has warned that the Rs100 billion investment could place an unnecessary financial burden on consumers. With electricity demand declining, the regulator questioned the need for such a large-scale investment. Nepra emphasized that any financial plan should focus on delivering tangible benefits to consumers rather than increasing costs.
Nepra’s Recommendations to Gepco
To address these concerns, Nepra has recommended the following:
- Enhance operational efficiency to reduce losses.
- Improve financial discipline to increase recovery rates.
- Prioritize the completion of ongoing projects before starting new ones.
- Develop a consumer-centric approach to ensure affordable electricity.
Conclusion
Nepra’s concerns about Gepco’s investment plan highlight the challenges of balancing large-scale investments with consumer affordability. Gepco must address its operational inefficiencies and financial weaknesses to make this plan successful. Focusing on ongoing projects and ensuring financial discipline is crucial for building a sustainable electricity system that benefits both the company and its consumers.