Eighth Quarterly Progress Report: July-September 2012

The period of performance is from September 17, 2010 to October 15, 2015. The purpose of this report is to present the status and performance of PDP for the eighth quarter covering the period from July 1 to September 30, 2012. PDP has operated effectively and efficiently during FY2012 and has achieved many successes. Expert assistance has been provided to the Ministry of Water and Power (MWP) on the power sector reform process. PDP advisors have been essential in helping the MWP to address the many important issues related to the dissolution of Pakistan Electric Power Company (PEPCO) and the establishment of the Central Power Purchasing Agency (CPPA. Financial management interventions have been initiated, including a 10-year financial model, revised accounting manual, internal audit co-sourcing activity, and Enterprise Resource Planning (ERP) design project. These interventions have been well-received by both DISCO senior management and Boards of Directors. Feeder optimization interventions have been pursued, focusing on the evaluation of approximately 20,000 meters, resulting in the replacement of numerous damaged or defective meters. Field inspection teams have identified examples of meter tampering and theft that, once corrected, are resulting in an annual revenue increase of several million rupees. The Ministry of Water and Power has been supported to improve the governance and regulation of the country's power sector, strengthen the Ministry's operational capacity, and introduce best practices in performance measurement. Analysis of Circular Debt in Pakistan has been conducted for USAID and the GOP, identifying the origins of Circular Debt, current issues to addressing Circular Debt, and proposing potential solutions. Emergency response interventions have been developed to help mitigate the energy crisis in Pakistan. A policy matrix for USAID Office of Energy has been developed, identifying policy-related changes needed to improve overall performance of the energy sector. Power savings of 74.4 MW have been achieved by installing high tension/low tension capacitors, meters, and improving commercial procedures, valued at $47.3 million and resulting in the provision of improved energy services to 1.1 million beneficiaries. Capacitors have been installed on tube well pumps, reducing the demand for electricity by 34.1 million kilowatt hours, valued at $3.75 million annually. High tension capacitor banks have been installed, reducing demand by 66 megawatts, valued at $41.9 million annually. PDP has placed a team of advisors at the MWP to assist in advancing the GOP's energy sector reform agenda. Advisors work with MWP senior-level staff on improving sector governance, moving reforms forward, strengthening the Ministry, building human capacity, developing a National Power Plan, and providing MWP with best practices in performance measurement. Moving forward into FY 2013, PDP will work towards closing out Component 2 activities while beginning rapid delivery of Component 3 activities. Special focus on sustainability will be given to Component 2 projects as the move from the design stage, through delivery and towards close-out. Staff will work with DISCO Boards and senior management to review 'lessons learned' and develop hand-over plans that ensure funding is available and internal processes are modified so as make certain DISCOs continue to realize project benefits well into the future. From a "use of funds" perspective, PDP increased use of project funds considerably from the previous year, doubling FY2011 (from $9.23 in FY2011 to $19.92 in FY2012). The rate of funds usage has increased by an average of 24% quarter-on-quarter. With corresponding results to support funds usage, PDP has become a model for effective and efficient use of funds, and the standard by which other programs are measured.