FESCO — EXPANDING DISTRIBUTION NETWORK
KANWAL SALEEM, Lahore
June 11 - 17, 2007
Faisalabad Electric Supply Company Limited (FESCO) is one of the nine-electricity distribution companies (DISCOs) established as a result of the unbundling of the vertically integrated power wing of Pakistan Water and Power Development Authority (WAPDA).
FESCO was organized to take over the properties, assets, obligations and liabilities of former Faisalabad Area Electricity Board (AEB) of WAPDA. The company was incorporated in March 1998 as a public limited company under Pakistan Companies Ordinance 1984. FESCO distributes and supplies electricity to about 2 million customers within its service area with a population of over 16 million, under a Distribution License granted by National Electric Power Regulatory Authority (NEPRA) pursuant to the Regulation of Generation, Transmission and Distribution of Electric Power Act, 1997 (NEPRA Act). The Government of Pakistan (GoP) intends to privatise. FESCO through the sale of 56% of its shareholding in the company to a strategic investor or a consortium of strategic and financial investors of which the investor would be required to sell 5% shares to the employees by instituting Employee Stock
Ownership Program (ESOP) within one year of taking over of FESCO. The GoP intends to hold 44% of the equity beyond privatsiation. According to Wapda sources, FESCO is one of the best electricity distribution companies in Pakistan in terms of operational performance, as it has low degree of distribution losses and a high rate of bill collection.
FESCO's main service area is Faisalabad, known for its extensive textile industries. The transaction thus offers the opportunity for interested investors to acquire a large customer base with a substantial portion of energy sold to industrial customers who consume 37% of the energy sold and contribute towards 48% of revenue.
International Finance Corporation (IFC) is the Financial Advisor for the transaction supported by Orr Dignam & Co., ESBI, NERA and A.F. Ferguson & Co. as its legal, technical, economic and financial consultants. The marketing of the transaction began in January 2003 with the invitation of Expression of Interests (EoIs) and Statement of Qualifications (SOQs) from parties interested in the privatisation of FESCO.
According to analysts, privatisation of public sector power companies seems to be the most difficult task, as separation of transmission, distribution systems and separating the assets of the companies are very complicated matters which are delaying privatisation of power sector utilities.
Faisalabad Electric Supply Company (FESCO) is making efforts to meet the increasing electricity demand by expanding its distribution network in addition to purchasing surplus electricity from the private generations companies. According to its Chief Executive, new grid stations are being added besides upgrading existing ones, He said that new grid stations of 132KV Thekriwala and 132KV Kamalpur are under construction, which would help in meeting the additional demand of electricity particularly in the semi urban areas of Faisalabad. Similarly 66KV Samundari grid station is also being upgraded into 132KV and hopefully it would be completed by June this year. He said that 66KV Satiana grid has already been upgraded into 132KV. He said that a 10/13 MVA new power transformer is also being added to meet the additional requirement of the Industrial areas of Khurrianwala. He said that another power transformer of the same capacity is also being installed in jaranwala grid station.
The Chief Executive FESCO said that Faisalabad Industrial Development and Management Company (FIEDMC) was also constructing a new 132KV grid station to cater to the electricity need of its Value Addition City(VAC). He said that FESCO is fully cooperating with FIEDMC and hopefully this grid station would be energized by June 30, 2007. He said that government was also planning to meet the energy need of M-3 Industrial City. However initially FESCO is providing electricity to FIEDMC to continue its construction work in these mega industrial estates.
To a query, he said that electricity load of Faisalabad was increasing at the rate of 8% per annum. He said that 930 capacitors have been installed in various feeders to improve the voltage and stabilize the electricity supply.
He said that FESCO was currently purchasing 28 mega watt electricity from various private producers while negotiations were in final stage to purchase another 5 mega watt from another private provider. He disclosed that FESCO was already supplying electricity to the agriculture tube wells during off peak hours at the rate of Rs. 0.75 per unit. In this connection TOD meters have been installed at almost 90% tube wells and company was convincing remaining tube wells owners to avail from this facility.
He said that Power Transformer of 66-KV Trug grid station has been upgraded to stabilize electricity supply besides enhancing its capacity to issue new electricity connections in this area. The CEO also said that capacity of 5.6 MVA power transformer of Trug grid station has been enhanced up to 12.5 MVA. It would help FESCO to issue new connections in this area in addition to overcoming complaints of low voltage. He said that FESCO has placed an order to purchase 9 new 20/26 MVA transformers to improve power distribution system. TOD (time operated device) meters have also been fitted to facilitate the tube well connections holders, he said and added that it will charge special rates on the late night use of tube well.
Moreover, he stated that existing grid stations are being upgraded in addition to the construction new grids to cater to the increasing needs of electricity in major load centers of FESCO. Consumers ''First" is motto of the officers and staff of Faisalabad Electric Supply Company (FESCO) to maintain the distinction achieved by this company due to their consistent, committed and dedicated efforts of last many years, he said.
A toll free telephone (0800-66554) has been provided in the Complaint and Monitoring Cell of Chief Executive FESCO (Faisalabad Electric Supply Company) to facilitate the consumers. A spokesman of FESCO said here Saturday that consumers from all the four circles (Faisalabad 1st, Faisalabad 2nd, Jhang and Sargodha) could lodge their electricity related complaints including wrong billing, over billing and change of meter etc. The staff at the cell will record each and every complaint and issue complaint number. The consumer could, later enquire about the status of their reported problem by mentioning his complaint number. He said that cell would also submit a report regarding complaints received and action taken on it on daily basis to Chief Executive. A 50-bed ultra modern WAPDA hospital is nearing completion in Faisalabad with an estimated cost of Rs.42.50 million.