LAHORE ELECTRIC SUPPLY COMPANY LIMITED
The concern
rely has been examined and remarks on behalf of LESCO are as under: -
1. That the
License had been granted to the Lahore Electric Company Limited on • 01.04.2002
for a length of twenty years (as per Art 5 of the License) having distinctive
proper to supply distribution service, make sale of electric powered power,
make schemes and have interaction in incidental things to do in the Service
Territory. So the stated license will expire on 30.03.2022.
2. That the
rights given in the license had the situation of exclusivity in nature and the
Lahore Electric Supply Company Limited has been paying Distribution License Fee
on a routine foundation in appreciate of every monetary year, subsequently it
would no longer be justified and felony t9 regulate the Art 7 of the
Distribution License No.03/DL/2002 dated April 01, 2002 granted to the Lahore
Electric Supply Company Limited at this stage when it is nonetheless legitimate
until 30.03.2022 (as it used to be granted for a length of 20 years)
3. That the
License has a time period of exclusivity for the whole duration of its
validity. Moreover, it-is additionally renewable at its expiry. So underneath
the provision of Art 7 of the stated License, Rule 7 of the NEPRA Licensing
(Distribution) Rules, 1999 and the Sec 21 (2)(a) of the Generation,
Transmission and Distribution of Electric Power Act, 1997 (as it was once
prevailing at the time of the License granting).
4. The Cabinet Committee on Privatization vide case No. CCOP-5/3/2014 dated 12-06-2014, has blanketed LESCO as an entity in the "Privatization Program for Early • L 1) 0mplementation" and a range of steps have additionally been intimated via Privatization --) ' \ Commission to LESCO for stated purpose. Reference is made to Section 35. of Privatization Commission Ordinance, 2000 (the "PC Ordinance") which affords as under:
I. Any Enterprise
or Management which is authorized by way of the cupboard as eligible for
privatization, shall.
a) Carry out
any instructions issued by way of the Commission in writing,
b) Keep up
to date commercial enterprise archives and books of account.
c) Not
function any motion that would end result in the belongings of organization or
enterprise venture or property being misplaced or wasted.
d) Not incur
any legal responsibility different than in the regular route of enterprise
besides the prior written approval of the commission.
e) Not
supply any man or woman statistics different than in the ordinance path of
enterprise which would possibly confer any benefit on that character or
plausible buyer; and
f) Refrain
from taking any motion which may additionally reason industrial unrest.
II. The fee
shall after approval below subsection (1) take all steps, such as as to
exchange of administration indispensable for initiating and finishing the
Privatization in accordance with sound business standards and practices
conductive to effectivity and economy."
III. In _view of the provision of PC Ordinance, it is pointed out that LESCO, after being blanketed in the Privatization Program for Early Implementation can't supply or have granted any consent, as the equal would be opposite to part 35 of the PC Ordinance. In addition to the above, it is additionally pointed out that Cabinet Committee on Privatization, vide letter No. 24/5/2003, issued Guidelines of for Heads of Units underneath Privatization. The applicable instructions of Cabinet Committee on Privatization are reproduced under: -
privatization Commission have to suggest the administration of the Public Sector entities along with in the Privatization Program about the moves they must take and the selections which they need to not, except clearance from the Privatization Commission. An fantastic guidelines must be organized of the reason which ought to be circulated for the training of the Public Sector entities as properly as administrative Ministries/Divisions concerned.
As a final
result of, above, a._ take a look at listing has additionally been issued by
using the Ministry of Privatization of the functions of movements that need to
now not be taken besides the prior consent /clearance of the Privatization
Commission, which are inclusive of the following: -
i. Sale or
switch of licenses, permits, etc.
ii. Closing
of any line of business.
iii.
Material trade affecting the Balance Sheet, Income Statement, etc.
iv. Major
monetary and contraction obligations/contracts backyard the everyday route of
business.
v. Material
discount /increase in inventories etc.
vi. Major
trade in processes, applied sciences etc.
In view of
the above, in presence of Section 35 of the Privatization Commission Ordinance
the change made in area 21 of the NEPRA Act should no longer be made which is
opposite to Section 35 of the Privatization Commission Ordinance. Even
otherwise, the consent of the Privatization Commission of Pakistan used to be
integral earlier than initiating any amendments in the NEPRA Act.
5. As a precept of regulation the amendments of the NEPRA ACT Extraordinarily Published by means of the Authority in the Gazette ofTakistan_on_May_02,2918 ought to have potential impact as an alternative retrospective in nature. Therefore, the choice need to be relevant to the licensees who have been granted licenses after the amendments' date whilst the licensees who had been granted licenses previously to this, have to be ruled underneath the provisions of the. NEPRA Act 1,997 in its true. Letter and spirit. The precept has been elaborated very virtually by means of the Apex Court in the following of its decisions. Therefore, the amended NEPRA Act does no longer empower the Regulator to put into effect the adjustments on retrospective impact level. Moreover, the amended act additionally no empower the Regulator to make adjustments in distribution licenses already in effect.
a) 2018 SCMR
991 SC
b)
Additional Commissioner Inland Revenue, Audit Range, Zone — I vs Eden Buildings
Limited
c) 2018 SCMR
802 SC
d) Sui Northern
Gas Company Limited vs Federation of Pakistan 2018 PLC (CS) 846 SC
e) Sui
Southern Gas Company Ltd. Vs Federation of Pakistan
f) 2018 PLD 97 SC
g) Sardar Sher Bahadar Khan vs Election Commission of Pakistan thru Secretary Election Commission, Islamabad.
6. That a license is simply like a contract, so the provisions of the contract regulation need to be relevant prevailing at the time of granting the license.
7. That it is very vital to point out that the Lahore Electric Supply Company Limited (LESCO) have invested billions of rupees for its infrastructure and improvement projects. Most of these are both finished or close to to completion, whilst contracts of many have already been awarded. It all has been deliberate through the LESCO by using thinking about its different proper of distribution in force. So in case of the proposed change in the Art 7 of the License, there are possibilities of big losses to the Government exchequer as there would be different competitors, who would attempt to appeal to customers via imparting tariff programs which would purpose big losses to the LESCO. So the licensee's funding would actually be at stake. It is additionally brought that in case of loss of clients to 2d tier dealer ROE (Return on Equity) and each year depreciation on the funding will have to borne through the left over customers main undue extend of tarif.
8. That the Lahore Electric Supply Company Limited (LESCO) supply backed tariff to the low earnings consumers, via pass subsidizing. Income from the industrial customers is shifted to the shoppers dwelling beneath the lifestyles line standard. In this way, the Lahore Electric Supply Company Limited (LESCO) is imparting / rendering comfort to such consumers. So in case of the proposed amendment in the license, it would be difficult. for the LESCO to render such variety of alleviation due to competitiveness and limit in earnings due to perchance • much less -number of consumers. or it would lead to—extra subsidy by using Government.
9. That there would be subject for the authorities to preserve a unified tariff at some point of the country.
10. . That the pooling of recoveries would additionally no longer be feasible due to inclusion of greater licensees in the market.
11. . That
the License granting motion of the Authority (NEPRA) is a closed and previous
transaction, so its amendments' applicability up to the extent of the licensee
i.e. The Lahore Electric Supply Company Limited is criminal as per choices /
judgments of the Honorable Supreme Court of Pakistan concerning the following
cases.
a. 2017 SCMR
1787 SC
b. Muhammad
Moizuddin Vs. Mansoor Khalil
2018 SCMR
1792
c. Al-Noor
Sugar Mills Limited Vs. Federation of Pakistan
12. The
proposed modification in the License can't be legally justified and-equitable
in nature. It would motive no longer solely monetary losses to the licensee
i.e. LESCO however it would amplify the difficulties for the low earnings phase
of the society. The LESCO will have to reduce down the range personnel
additionally in case of such amendment/s. Ultimately the licensee's earnings
will honestly be lowered and it would extend unemployment in the society also.
Under these
circumstances, LESCO strongly objects to the furnish of the present
Distribution License of LESCO.
0 Comments
Thanks for your comment You will receive a reply within 24 hours