The government is set to split large power distribution companies (DISCOs) to ensure efficiency in their operations, which will help slash financial losses and power theft.
Members of the cabinet raised the issue in a meeting held last week while considering the appointment of the head of Multan Electric Power Company (Mepco).
During discussion, they underlined the need for splitting Mepco as its area of operations was too large, causing difficulties in addressing the problems faced by residents of the southern most districts of Punjab.
Energy Minister Hammad Azhar was of the view that though the break-up of Mepco was justified, it could not be done at the moment due to shortage of manpower. He assured the cabinet that Mepco would be split once the manpower issue was addressed.
A cabinet member contended that the division of the power distribution company should not be linked with the dearth of manpower as vacancies could correspondingly be filled in the newly created entity.
It was also pointed out that Quetta Electric Supply Company (Qesco) and Peshawar Electric Supply Company (Pesco) needed to be split since their respective jurisdictions were large as well. Members of the cabinet suggested the constitution of a committee to look into the viability of breaking up the large DISCOs.
Consequently, the government formed a committee, which would come up with recommendations. Energy minister will be the convener of the committee.
Appointment of MEPCO CEO
The Power Division told the cabinet that the board of directors of Mepco had initiated the process of appointing a regular chief executive officer (CEO) by advertising the post on January 6, 2021.
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However, the process was challenged by the Mepco Engineering Association in the Lahore High Court, Multan bench.
Subsequently, the court issued orders that subject to the notice and till the next date of hearing, the recruitment process on the basis of impugned notification might continue but would not be finalised.
Mepco re-advertised the post on May 5, 2021 but the recruitment process would take some time, the cabinet was told.At present, Ikramul Haq is looking after the work of CEO as a stopgap arrangement and he is going to retire before the end of December 2021.
The Power Division sought the cabinet’s approval for assigning the charge of CEO to Allahyar Khan, currently posted as chief engineer, as a stopgap arrangement till the appointment of a regular CEO. The cabinet approved the proposal.
GHCL board member
The Power Division apprised the cabinet that the requirements for appointing independent directors of Genco Holding Company Limited (GHCL) were laid down under Rule 3(6), Annexure 310, Corporate Governance Rules 2013.
Company secretary said that Muhammad Abdul Aziz Irfan had submitted his resignation as the director of GHCL board due to health reasons. To fill the vacancy, the Power Division proposed the name of Akhlaq Ahmed Syed.
The proposed independent director submitted an affidavit, saying that he met all requirements of the fit and proper criteria stipulated under the Companies Act and the Rules.
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He was associated with the Pakistan Institute of Corporate Governance. He also provided a certificate, saying that he had not contested elections and was not a political office-bearer.
Syed had previously served as an independent director on boards of power distribution companies. Keeping that in view, the Power Division proposed that he may be appointed as an independent member on the GHCL board.
The cabinet was informed that the prime minister had also given his approval. The cabinet considered a summary titled “Nomination of director due to casual vacancy on the board of directors of Genco Holding Company Limited”, submitted by the Power Division, and approved the proposal.
Jamshoro Power Co
The Power Division told the cabinet that company secretary of Jamshoro Power Company Limited (JPCL), a public sector company, had informed it that independent director Danish Iqbal had been absent from more than 10 consecutive meetings of the board without leave of absence.
As per Section 171 of the Companies Act 2017, a director ceases to hold office if he/ she is absent from three consecutive meetings of the board without seeking leave of absence.
There was another casual vacancy as well due to the death of independent director Abdul Malik Memon.
To fill the vacancies, the Power Division proposed the names of Muhammad Shafiqur Rehman and Irshad Ali.
The proposed independent members submitted their affidavits, saying that they had fulfilled all requirements of the fit and proper criteria stipulated under the Companies Act and the Rules.