PEPCO’s dissolution finalised

PEPCO’s dissolution finalised

The government of Pakistan has eventually decided to dissolve Pakistan Electric Power Company (PEPCO) after the organisation failed to meet the deadlines four times in the current fiscal year. The board of directors of PEPCO had
a meeting on Thursday to advise the formal dissolution of the company as per the legal regularities of the Security and Exchange Commission of Pakistan (SECP).

The Water and Power Ministry has decided to temporarily transfer all the PEPCO’s functions to the National Transmission and Dispatch Company until a permanent solution is not found. In the mean time, the government will devise
some alternative and more reliable arrangements to manage the bleeding power sector.

The board of directors’ meeting was held to discuss the routine matters of the organisation, rather than the dissolution itself, till late Wednesday. However, the government has instructed the board to put the dissolution process
on the agenda of the meeting on Thursday. An official told later that the directors will hold the meeting to decide the legal processes in PEPCO’s dissolution and other core issues, like the determination of assets and liabilities, and shifting them to the
other subsidiaries.

“Luckily, Pepco which was formed as a management company under Section 42 of the SECP neither has assets nor liabilities of its own,” says a ministry official.

Since PEPCO is a management entity, it never owned any asset and all of its liabilities are with the government and its subsidiaries. PEPCO had signed all the international agreements on the behalf of the government or one of its
subsidiaries. All the cash in PEPCO’s accounts will be immediately transferred to the respective companies once the dissolution process initiates.

The board of directors advised the government to take notice of a vital problem which will arise with the dissolution of PEPCO.

“A minor problem is its over 1,000 employees. They have been transferred to subsidiary companies but they are yet to get appointment letters from their respective companies. The process will be quickened and completed before formally
dissolving the company,” was the recommendation of the board.

The government has no alternative plans at present but it is inevitable for it to further delay the dissolution process, as the lenders have already run out of patience and the government has become tired of presenting excuses.

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Posted by Farhan Hameed on Nov 18 2011. Filed under Business, Politics. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry