Advanced Metering Infrastructure: Pakistan to pay $2.2m for not using $400m ADB loan

ISLAMABAD: Pakistan will have to pay $2.2 million this year as commitment charges on a $400 million loan from the Manila-based Asian Development Bank (ADB) extended in 2015 to Pakistan for installing Advanced Metering Infrastructure (AMI) in LESCO and IESCO to reduce electricity theft and improve recovery through accurate billing, top official sources told The News.

They said: “However, the project was never installed in DISCOs and the government paid $1 million by 2018 as commitment charges which have now swelled up to $2.2 million.”

The PML-N government rendered the project dormant in 2018 contending that electric power distribution companies (DISCOs) had rejected the AMI project as they saw many shortcomings in it. Nonetheless, the PTI government decided to open the project when it came to power, but there has been no progress on AMI for two years and a half.

Now the sitting government, official sources said, is making its mind to either cancel the project under ADB loan or initiate the project by increasing its scope.

“The top functionaries want to execute the project through Chinese Company — State Grid Corporation of China (SGCC) under the umbrella of CPEC.”

When contacted, Tabish Gauhar, Special Assistant to PM on Power and Petroleum, said: “Yes, the country has been paying commitment charges for many years as the $400 loan has not been utilized.” He said the project was faulty by design. Under the earlier scope of the project, AMI was to be installed at LESCO and IESCO where transmission and distribution losses were the lowest which are still in the range of 8 percent as both the DISCOs have been efficient companies. “The AMI should have been installed in the loss making companies such as HESCO, SEPCO, PESCO and MEPCO.”

Gauhar said the government would not abandon the project, and it wants to increase its scope. The government wants AMI installed first at loss-making DISCOs, and then extending it to the remaining DISCOs.

Gauhar said the power division would take up the issue with the ADB mission that is due in Pakistan this month. He also admitted that the State Grid Corporation of China (SGCC) has offered to execute the project under the CPEC umbrella.

“SGCC is already busy in Pakistan executing many projects. State Grid Corporation of China (SGCC) is the largest electric utility company in the world with US$363 billion annual revenue for 2017. With 927,839 employees, State Grid has over 1.1 billion customers and is the world's second largest company by revenue as of 2018.”