Executive Summary
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AUDIT REPORT ON THE ACCOUNTS OF WATER AND POWER DEVELOPMENT AUTHORITY AUDIT YEAR 2014-15 AUDITOR-GENERAL OF PAKISTAN TABLE OF CONTENTS Page No. ABBREVIATIONS & ACRONYMS i PREFACE v EXECUTIVE SUMMARY vii SUMMARY TABLES & CHARTS I Audit Work Statistics xiii II Audit observations regarding financial xiii management III Outcome Statistics xiii IV Irregularities pointed out xiv V Cost Benefit Xiv MINISTRY OF WATER AND POWER (A) WATER AND POWER DEVELOPMENT AUTHORITY (WAPDA) CHAPTER 1 WATER WING 1.1 Introduction 1 1.2 Brief comments on the status of compliance with 2 PAC directives 1.3 Audit Paras 2 CHAPTER 2 WAPDA HYDRO ELECTRIC POWER 2.1 Introduction 25 2.2 Brief comments on the status of compliance with 26 PAC directives 2.3 Audit Paras 26 (B) PAKISTAN ELECTRIC POWER COMPANY (PEPCO) CHAPTER 3 PAKISTAN ELECTRIC POWER COMPANY (PEPCO) 3.1 Introduction 43 3.2 Brief comments on the status of compliance 43 with PAC directives 3.3 Audit Paras 43 CHAPTER 4 COMMON ISSUES REGARDING GENCOs, NTDC & DISCOs 4.1 Audit Paras 55 CHAPTER 5 JAMSHORO POWER GENERATION COMPANY (GENCO-I) 5.1 Introduction 69 5.2 Comments on Financial Statements 69 5.3 Audit Paras 71 CHAPTER 6 CENTRAL POWER GENERATION COMPANY (GENCO-II) 6.1 Introduction 77 6.2 Audit Paras 77 CHAPTER 7 NORTHERN POWER GENERATION COMPANY (GENCO-III) 7.1 Introduction 87 7.2 Audit Paras 87 CHAPTER 8 LAKHRA POWER GENERATION COMPANY (GENCO-IV) 8.1 Introduction 99 8.2 Comments on Financial Statements 99 8.3 Audit Paras 102 CHAPTER 9 NATIONAL TRANSMISSION AND DESPATCH COMPANY (NTDC) 9.1 Introduction 107 9.2 Brief comments on the status of compliance 108 with PAC directives 9.3 Audit Paras 109 CHAPTER 10 FAISALABAD ELECTRIC SUPPLY COMPANY (FESCO) 10.1 Introduction 129 10.2 Comments on Financial Statements 129 10.3 Brief comments on the status of compliance 134 with PAC directives 10.4 Audit Paras 134 CHAPTER 11 GUJRANWALA ELECTRIC POWER COMPANY (GEPCO) 11.1 Introduction 147 11.2 Comments on Financial Statements 147 11.3 Audit Paras 151 CHAPTER 12 HYDERABAD ELECTRIC SUPPLY COMPANY (HESCO) 12.1 Introduction 163 12.2 Comments on Financial Statements 163 12.3 Audit Paras 167 CHAPTER 13 ISLAMABAD ELECTRIC SUPPLY COMPANY (IESCO) 13.1 Introduction 177 13.2 Comments on Financial Statements 177 13.3 Audit Paras 181 CHAPTER 14 LAHORE ELECTRIC SUPPLY COMPANY (LESCO) 14.1 Introduction 193 14.2 Comments on Financial Statements 193 14.3 Audit Paras 197 CHAPTER 15 MULTAN ELECTRIC POWER COMPANY (MEPCO) 15.1 Introduction 217 15.2 Comments on Financial Statements 217 15.3 Brief comments on the status of compliance 221 with PAC directives 15.4 Audit Paras 221 CHAPTER 16 PESHAWAR ELECTRIC SUPPLY COMPANY (PESCO) 16.1 Introduction 237 16.2 Comments on Financial Statements 237 16.3 Audit Paras 241 CHAPTER 17 QUETTA ELECTRIC SUPPLY COMPANY (QESCO) 17.1 Introduction 265 17.2 Brief comments on the status of compliance 265 with PAC directives 17.3 Audit Paras 265 CHAPTER 18 SUKKUR ELECTRIC POWER COMPANY (SEPCO) 18.1 Introduction 277 18.2 Audit Paras 277 CHAPTER 19 TRIBAL AREAS ELECTRIC SUPPLY COMPANY (TESCO) 19.1 Introduction 285 19.2 Audit Paras 285 CHAPTER 20 SPECIAL STUDY REPORT ON ENERGY CRISIS – REASONS AND SOLUTIONS Executive Summary 291 Key Findings 291 Recommendations 293 Introduction 294 Audit Objectives 295 CHAPTER 21 PERFORMANCE AUDIT REPORT ON SATPARA DAM PROJECT SKARDU Executive Summary 329 Key Findings 329 Recommendations 330 Introduction 330 Audit Findings 333 ANNEXURES & TABLES Annexure-I 355 Audit paras, not considered significant enough to report to the parliament, included in MFDAC Annexure-II 360 Tables 361 ABBREVIATIONS AND ACRONYMS ACSR Aluminum Conductor Steel Re-enforced ADB Asian Development Bank AEDB Alternative Energy Development Board AEL Annual Energy Losses AJ&K Azad Jammu and Kashmir ALM Assistant Line Man B&C Budget & Consolidation BOD Board of Directors BOOT Built, Own, Operate and Transfer BOQ Bill of Quantity BPCs Bulk Power Consumers BPS Basic Pay Scale BTU British Thermal Unit CAATs Computed Assisted Auditing Techniques CCC Central Contract Cell CCPP Combined Cycle Power Plant CDA Capital Development Authority CDL Cash Development Loan CDWP Central Development Working Party CEO Chief Executive Officer CFL Compact Florescent Lamps CHASNUPP Chashma Nuclear Power Plant COBOL Common Business Oriented Language CP Commercial Procedure CP Commercial Procedure CPGCL Central Power Generation Company Limited CPPA Central Power Purchasing Agency CRBC Chashma Right Bank Canal CRRK Chief Resident Representative Karachi CSA Consultancy Services Agreement DAC Departmental Accounts Committee DDO Drawing & Disbursing Officer DG Director General DHA Defence Housing Authority DISCOs Distribution Companies DoP Development of Power DP Draft Para E&M Electrical & Mechanical ECC Economic Coordination Committee ECNEC Executive Committee of the National Economic Council EHV Extra High Voltage ELR Energy Loss Reduction EMB Electrical Measurement Bank EOT Extension of Time EPC Engineering Procurement and Construction EPC Engineering, Procurement & Construction ERO Equipment Removal Order ERP Enterprise Resource Planning FATA Federally Administered Tribal Area FBR Federal Board of Revenue i FC Frontier Constabulary FCC Foreign Currency Component FCC Fuel Cost Component FCC Fixed Cost Component FCS Free Consignee Store FESCO Faisalabad Electric Supply Company FIA Federal Investigation Agency FIDIC Federation International Des Ingenieurs-Conseils FIR First Information Report FPA Fuel Price Adjustment FWO Frontier Works Organization GBHP Ghazi Barotha Hydropower Project GCC Gas Cost Component GENCOs Generation Companies GEPCO Gujranwala Electric Power Company GFR General Financial Rules GHCL GENCO Holding Company Limited GM General Manager GoP Government of Pakistan GSC Grid System Construction GSO Grid System Operation GST General Sales Tax GTPS Gas Thermal Power Station GWH Gegawatt Hours GZD Gomal Zam Dam HESCO Hyderabad Electric Supply Company HFO High Speed Furnace Oil HP Horse Power HPP Hydro Power Project HPS Hydel Power Station HSD High Speed Diesel HT High Tension IAS International Accounting Standards IDC Interest During Construction IESCO Islamabad Electric Supply Company IPC Interim Payment Certificate IPPs Independent Power Producers IRSA Indus River System Authority ISRIP International Sedimentation Research Institute, Pakistan JICA Japan International Co-operation Agency JPGCL Jamshoro Power Generation Company Limited JV Journal Voucher KAPCO Kot Addu Power Company KESC Karachi Electric Supply Company KIBOR Karachi Inter Bank Offer Rates KPK Khyber Pukhtunkhwa KV Kilo Volt KVA Kilo Volt Amps KW Kilo Watt KWh Kilo Watt Hours LAC Land Acquisition Collector LC Letter of Credit LD Liquidated Damages ii LESCO Lahore Electric Supply Company LOI Letter of Intent LPGCL Lakhra Power Generation Company Limited LT Low Tension M.S Medical Superintendent MD Managing Director MDI Maximum Demand Indicator MDR Mangla Dam Raising MDRP Mangla Dam Raising Project MEPCO Multan Electric Power Company MFDAC Memorandum for Departmental Accounts Committee MIS Management Information System MKWH Million Kilo Watt Hour MMBTU Million British Thermal Unit MMCFT Million Cubic Feet MRN Material Return Note MT Metric Ton MVA Mega Volt Ampere MW Mega Watt NAB National Accountability Bureau NEO Net Electric Output NEPRA National Electric Power Regulatory Authority NGPS Natural Gas Power Station NJHPC Neelum Jhelum Hydro Power Company NJS Neelum Jhelum Surcharge NPCC National Power Control Centre NPGCL Northern Power Generation Company Limited NTDC National Transmission and Despatch Company O&M Operation and Maintenance PAC Public Accounts Committee PAEC Pakistan Atomic Energy Commission PC Poles Pre-stressed Concrete Poles PCC Particular Condition of Contract PC-I Planning Commission Proforma-I PCRET Pakistan Council of Renewable Energy Technology PD Project Director PDP Proposed Draft Para PEC Pakistan Engineering Council PEPCO Pakistan Electric Power Company PESCO Peshawar Electric Supply Company PHPL Power Holding Private Limited PITC Power Information Technology Company PMU Project Management Unit PMU Project Management Unit POL Petrol, Oil and Lubricants POs Provisional Orders PPA Power Purchase Agreement PPIB Pakistan Power Infrastructure Board PPRA Public Procurement Regulatory Authority PRES Pakistan Renewable Energy Society PSC Power Sector Companies PSCs Public Sector Companies PSDP Public Sector Development Programme iii PSO Pakistan State Oil PWP Peoples Works Programme QESCO Quetta Electric Supply Company RBOD Right Bank Outfall Drainage RCO Reconnection Order REAP Renewable Energy Association Pakistan RFO Residual Furnace Oil RPP Rental Power Project SAP System Augmentation Project SCARP Salinity Control and Reclamation Project SEPCO Sukkur Electric Power Company SEPCOL Southern Electric Power Company Limited SHPS Small Hydel Power Station SHYDO Sarhad Hydro Development Organization SMS Secured Metering System SNGPL Sui Northern Gas Pipelines SO System Operator SOPs Standard Operating Procedures SPP Small Power Producer SRO Statutory Regulatory Order SSGC Sui Southern Gas Company STG Secondary Transmission Lines and Grids T&D Transmission & Distribution T&T Transformation and Transmission TBM Tunnel Boring Machine TDS Tariff Differential Subsidy TESCO Tribal Areas Electric Supply Company TLC Transmission Line Construction TNO Transmission Network Operator TNO Transmission Network Operator TOU Time of Use TPS Thermal Power Station UDC Upper Division Clerk UOSC Use of System Charges VO Variation Order WAPDA Water and