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LO PROJECT ON WAPDA

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Water and Power Development Authority (WAPDA)

Background:
WAPDA, the Pakistan Water and Power Development Authority, was created in 1958 as a Semi-Autonomous Body for the purpose of coordinating and giving a unified direction to the development of schemes in Water and Power Sectors, which were previously being dealt with, by the respective Electricity and Irrigation Department of the Provinces. Since October 2007, WAPDA has been bifurcated into two distinct entities i.e. WAPDA and Pakistan Electric Power Company (PEPCO). WAPDA is responsible for water and hydropower development whereas PEPCO is vested with the responsibility of thermal power generation, transmission, distribution and billing. There is an independent Chairman and MD (PEPCO) www.pepco.gov.pk replacing Chairman WAPDA and Member (Power) who were previously holding the additional charges of these posts. WAPDA is now fully responsible for the development of Hydel Power and Water Sector Projects. PEPCO has been fully empowered and is responsible for the management of all the affairs of corporatized nine Distribution Companies (DISCOs), four Generation Companies (GENCOs) and a National Transmission Dispatch Company (NTDC). These companies are working under independent Board of Directors (Chairman and some Directors are from Private Sectors). The Companies are administratively autonomous and leading to financial autonomy by restructuring their balance sheets by bringing their equity position to at least 20 percent, required to meet the prudential regulations and to facilitate financing from commercial sector (approved by ECC).The Loan Liability Transfer Agreements (LLTA) have been signed with Corporate Entities and execution of loan transfer is complete. All Entities have the physical possessions of all their operational assets. On 24th Feb. 2007 Ministry of Water & Power notified NEPRA approved Tariff for all Distribution Companies replacing unified WAPDA Tariff. Legal Agreements such as Business Transfer Agreements, Operation Development Agreement, Energy Supply Agreement, Business Supplementary Agreement and Fuel Supply Agreement etc. were executed between WAPDA and Corporate Entities to facilitate commercial operations. Regulatory instruments like Grid Code, Distribution Codes, Performance Standard for Distribution Companies and Transmission Companies were drafted and got approved from (www.nepra.org.pk) in 2007. All major lenders gave their consent for transfer of their loan from WAPDA to Corporate Entities, thus 326 loan assumption agreement were signed amongst respective Companies, WAPDA and EAD (Economic Affairs Division) GOP. CPPA is established under the coverage of NTDC for payments from DISCOs to IPPs, GENCOs and NTDC. Ultimately, it will function independently under Federal Govt. and all forthcoming IPPs will be under CPPA.

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Products:
Wapda has to investigate, plan and execute schemes for the following fields: 1. Generation, Transmission and Distribution of Power. 2. Irrigation, Water Supply and Drainage. 3. Prevention of Water logging and Reclamation of Waterlogged and Saline Lands. 4. Flood Management. 5. Navigation.

Water Wing In 1959, WAPDA was created to undertake the task of investigating, planning and executing schemes for irrigation, drainage, prevention of water logging and reclamation of saline land as an autonomous body responsible for integrated development of water and power resources in Pakistan. The organization was also entrusted with the work of implementing Indus Basin Settlement Plan signed between India and Pakistan in 1960 to develop replacement works for management of river water and irrigation system. Since then it has been engaged in building water development projects which include extensive research and investigation to augment country's water resources. Pakistan Electric Power Company (PEPCO) The Pakistan Electric Power Company (Private) Limited (PEPCO) has been entrusted the task of managing the transition of WAPDA from a bureaucratic structure to a corporate, commercially viable and productive entity. It is a mammoth task and progress in the initial months was rather slow, but one should keep in mind that responsibility is enormous and transition is a long drawn process. Before going into further details of the restructuring programme, it is necessary to understand the shift in the GoP policy. The GoP, in line with its Strategic Plan of 1992 approved by the cabinet committee, had decided to restructure the entire power sector in the country. De-regulation of power sector Promotion of IPPs Restructuring of WAPDA Privatization of select corporate entities The factors responsible for the shift in policies were: generation capacity could not be increased to meet demand, WAPDA's growth caused inefficiencies, 'demand suppression' and high tariff policy, proliferated theft. All these factors, over the years, adversely affected WAPDA's financial condition. As part of this programme WAPDA's functions under its Water Wing and Power Wing were to be segregated. It was previously envisaged that all power generation, hydel as well as thermal, would be corporatized. However, later on it was
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,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,a Water and Power Development Authority ,,,, decided that the hydel generation should remain part of the Water Wing or the remaining WAPDA. PEPCO has prepared the conceptual framework and is following a comprehensive strategy whereby WAPDA's vertical-monolithic Power Wing has been restructured into autonomous entities under Companies Ordinance 1984.

PROJECTS:
A project in business science is typically defined as a collaborative enterprise, frequently involving research or design, that is carefully planned to achieve a particular aim. Projects can be further defined as temporary rather than permanent social systems that are constituted by teams within or across organizations to accomplish particular tasks under time constraints. FOLLOWING ARE THE ONGOING PROJECTS OF THE WAPDA: UNDER CONSTRUCTION DAMS Gomal Zam Dam Project, Mirani Dam Project, Mangla Dam Raising Project, Sabakzai Dam Project, Satpara Dam Project UNDER CONSTRUCTION CANALS Rainee Canal Project, Kachhi Canal Project, Greater Thal Canal Project UNDER CONSTRUCTION DRAINAGE PROJECTS Right Bank Outfall Drain Project-I, Balochistan Effluent Disposal Into RBOD-III UNDER CONSTRUCTION HYDROPOWER PROJECTS Allai Khwar Hydropower Project, Khan Khwar Hydropower Project, Duber Khwar Hydropower Project, Jinnah Hydropower Project, Neelum Jhelum Hydropower Project, Jabban Hydropower Project SMALL / MEDIUM DAMS Bara, Garuk, Hingol, Naulong, Pelar, Darwat, Darban, Ghabir, Naigaj, Papin, Winder, Tank Zam Dam BARRAGES Chashma Barrage, CJ-Link Canal, Chashma Right Bank Canal FOLLOWING ARE THE FUTURE PROJECTS PROJECTS ANNOUNCED BY THE PRESIDENT OF PAKISTAN Diamer Basha Dam, Kurram Tangi Dam Project Munda Dam Project, Akhori Dam Project

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FEASIBILITY STUDY IN HAND (HYDROPOWER PROJECT) Golen Gol, Dasu, Bunji, Keyal Khwar, Lawi, Palas Valley (Chor Nullah), Spat Gah, Basho, Phandar, Thakot, Patan, Tarbela, LBOD STAGE-1 BADIN AREA DRAINAGE SYSTEM, Mangla, Warsak, Renala, Chitral, Kohala, Harpo.

Mission:
A mission statement is a statement of the purpose of an organization and its reason for existing. M i s s i on of W A PD A O u r m i s s i o n i s t o b ri n g t h e a s s u r a n c e o f e n e r g y t o o u r c u s t om e r s , w i t h w o r l d c l a s s quality and commitment for satisfaction as we continue in our quest for excellence.

Vision:
Vision statements reflect the ideal image of the organization in the future. They create a focal point for strategic planning and are time bound, with most vision statements projected for a period of 5 to 10 years. The vision statement communicates both the purpose and values of the organization. For employees, it gives direction about how they are expected to behave and inspires them to give their best. Shared with customers, it shapes customers understanding of why they should work with the organization Vision 2025 WAPDA has formulated a comprehensive $2533 billion National Water Resource and Hydropower Development Program, entitled Water Vision 2025. The Water Vision 2025 projects are expected to generate 16,000 MW of hydroelectricity. Other goals are to prevent w a t e r s h o r t a ge s , l i m i t d r ou gh t a n d i n c r e a s e wa t e r s t o r a ge f o r a gr o w i n g p o p u l a t i on . F i v e massive hydropower projects have been announced by the President of Pakistan; these are to be completed by 2016, with a generation capacity of 9,500 MW. Two of the projects are ready for construction, while three are in the stages of feasibility studies and preparation of tender documents. Water Vision 2025 consists of three phases. Phase I was expected to start in 1993 but w a s d e l a ye d . T h e p r i o r i t y o f w a t e r s e c t o r p r o j e c t s u n d e r P ha s e I o f W a t e r V i s i o n 2 0 2 5 a r e Gomal Dam(NWFP),Mirani Damand Mithan Kot Barrage at Kachhi Canal(Balochistan)raising of Mangla Dam(Azad Kashmir), Greater Thal Canal phase I (Punjab) and Thar/Rainee Canals phase I (Sindh). The total cost of these Phase I projects will be $2.467 billion with a construction period of five years. Under Phase II,Hingol Dam, Balochistan Damand Satpara Dam (Northern Areas), Chashma Right Bank Canal and Khurram Tangi Dam(NWFP), phase II of the Greater Thal Canal Akhori Damand Sanjwal Dam(Punjab), phase II of Thar/Rainee C a n a l s , G a j n a i a n d S e h w an B a r r a ge ( S i n d h ) w i l l b e c o m p l e t ed i n 3 6 ye a r s , e x c e p t Basha Dam, which will take 8 10 years for its completion. The total cost of Phase II projects will be$8.94 billion. These 11 projects will have a storage
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,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,a Water and Power Development Authority ,,,, capacity of 12.79 million acre-feet, would generate over 3362 mW of power, and would irrigate 1.4 million hectares of land. Under Phase III, Yugo Dam, Skardu Dam, Dhok Dam, Rohtas Dam, Naulang Damand Khadji Dam will be completed

Structure:
Structure of an organization is the typically hierarchical arrangement of lines of Authority, communications, rights and duties of an organization. Organizational structure determines how the roles, power and responsibilities are assigned, controlled, and coordinated, and how information flows between the different levels of management. WAPDA is classic examples of vertical structure. Vertical organizational structures are characterized by few people at the top and increasing numbers of people in middle management and lower level positions. In other words, a few people make policy and decisions, and many people carry them out. Governments often lean toward them because they create very defined job scopes and powers--each person has a clear role to play. Vertical structure is the classic bureaucracy and is epitomized and originated in one of the oldest government functions

WAPDA ( POST- RESTRUCTURING SCENARIO )

THE NEW WAPDA Authority RESTRUCTURED POWER WING

FINANCE WING

SOURCE OF MANPOWER FOR SUPPORT SERVICES

PROVIDE CHARGEABLE SERVICES

COMMON SERVICES RESIDUAL ASSETS

Autonomous Companies
WATER WING HYDEL DEVT. HYDEL OPERATIONS

GENCOs

NTDC

DISCOs

(3)

(1)

(8)

Organization Chart of WAPDA

The Authority is comprised on Chairman, 03 Members - Water, Power & Finance & a Secretary. MD (Admn) GM (CCC)
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Member (Finance) Chief Auditor DG (Finance) B&C DG (CM) W DG (Insurance)

Member & M.D. (Power) GM (Hydel) Opr. GM (Hydel) Dev. GM (Finance) Power GM (Training) CE (Coord) Power CE/Principal (WEA), Faisalabad Principal (WSC), Islamabad

Member & M.D. (Water) GM (Coord & Mon) Water GM (Hydro Planning) GM (Projects) North GM (Planning & Dev.) GM (Tarbela) GM (GBHP) GM (M&S) GM (Projects) South GM (Central) Water GM (Technical Services) GM (Diamer Basha Dam) GM (Finance) Water GM (Land Sett. & Rehab.) GM (CDO) Water CEO (Neelum Jhelum) Advisor (DBD) Advisor (NWRDP) Advisor (Northern Areas) Consultant (Mega Dams) Advisor (Hydel) GenerationWAPDA,

Life Cycle of an Organization:

The organizational life cycle is the life cycle of an organization from its creation to its termination. There are five level/stages in any organization. Birth Growth Maturity Decline Death

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,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,a Water and Power Development Authority ,,,, In View of above matrix WAPDA is Public Sector Star. WAPDA is a Mature organization at Formalization Stage where it is facing too much red tapism.

Culture of an Organization:
Organizational culture is the collective behavior of humans who are part of an organization and the meanings that the people attach to their actions. Culture includes the organization values, visions, norms, working language, systems, symbols, beliefs and habits. It is also the pattern of such collective behaviors and assumptions that are taught to new organizational members as a way of perceiving, and even thinking and feeling. Organizational culture affects the way people and groups interact with each other, with clients, and with stakeholders. By describing the distinctive rituals, stories, symbols, power and organizational structures and control systems that can contribute to the organizations worldview one can more clearly characterize an organization's culture In WAPDA Bureaucratic management approach is Used, Which emphasized the necessity of organizations to operate in rational way instead of following the arbitrary whims or irrational motions and intentions of managers. Different characteristics in bureaucracies that would effectively conduct decision-making, controlling resources, protecting workers and accomplishment of organizational goals. Management Culture of WAPDA has the following Characteristics: Proper Division of Labor Division of labor specialization is fixed and there is a balance between power and responsibilities. Chain of Command The chain of command or organizational hierarchy is constructed in a way that information related to decision and works can flow effectively from top to bottom. Separation of personal and official property Officers and organization's assets are separate and can to be treated as same by the owner or the organization. Application of Consistent and Complete Rules There are proper rules and regulations in the organization for running the organization. These rules are followed in every steps of the organization and they are equally applicable for every employee of organization. Selection and Promotion Based on Qualifications The selection and promotion of workers is based on equalization's like; skills, experience, age. It is not influenced by personal relations and benefits. Training in job requirements and skills. There is a difference between management and other parts of organization and training and improving skills of management is important.

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,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,a Water and Power Development Authority ,,,, Following features are the principle of WAPDAs Management Culture: High degree of Division of Labor and Specialization. There is a well-defined chain of command. It follows the principle of Rationality, Objectively and Consistency. The relationship among the employees of the organization is Formal and Impersonal relations. And its based on positions and not on personalities. Rules and Regulations are well defined and it indicates the duties and rights of the employees. These rules apply to everyone from to bottom of organization and must be strictly followed. Selection and Promotion is based on Technical qualifications. Only Bureaucratic or legal power is given importance.

LEARNING ORGANIZATION :
A learning organization is the term given to an organization that facilitates the learning of its members and continuously transforms itself. Learning organizations develop as a result of the pressures facing modern organizations and enables them to remain competitive in the business environment. A learning organization has five main features; systems thinking, personal mastery, mental models, shared vision and team learning. A learning organization is an organization skilled at creating, acquiring and transferring knowledge, and at modifying its behavior to reflect new knowledge and insights. WAPDA is one of the largest employers of human resources in Pakistan. Over the years WAPDA has built-up a reservoir of Technical know-how and expertise which has made it a modern and progressive organization. To maintain tempo of work in such a large organization, it is imperative to have standing arrangements for management and technical training of the officers and staff. T r a i n i n g a c t i v i t i e s a r e c o n d u c t e d i n W A P D A t o i m p a r t b as i c a n d a d v a n c e k n o w l e d ge t o a l l officers and staff during different stages of their career. A number of training institutes are functioning at various places. WAPDA Administrative Staff College, Islamabad. WAPDA Engineering Academy, Faisalabad WAPDA is skilled at five main activities which are required by a Learning organizations i.e : Systematic problem solving, Experimentation with new approaches, Learning from their own experience and past history, Learning from the experiences and best practices of others, Transferring knowledge quickly and efficiently throughout the organization.

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TRADITIONAL ORGANIZATION:
WAPDA uses the same type of organizational structure as is commonly found in the most of public sector. The first being the functional or traditional structure that is typical of many organization in Pakistan, with government adopting the hierarchical or pyramidal structure. The tasks are broken into simple parts, each the responsibility of a different unit of employees, each defined by specific rules and regulations. A potential problem with this top down structure is insufficient responsiveness to citizen concerns and costly inefficiencies. Following problems also exist in WAPDAs Management Culture: The emphasis only on rules and regulations. There is unnecessary delay in decision-making due to formalities and rules of Bureaucratic Organization. Coordination and communication hampered because of too much formality and rules. Bureaucracy involves a lot of paper work and has just too much level of authority which results in lot of wastage of time, effort and money. Not ideal for efficiency. Because of its too much formality, Bureaucratic approach is not suitable for government organizations. Too much importance is given to the technical qualifications of the employees for promotion and transfers. Dedication and commitment of the employee is not considered. Limited scope for Human Resource (HR). No importance is given to informal groups and neither any scope is given to form one. Bureaucratic approach worked as a solution to problems of traditional administrative systems. But it is not the prefect or close to perfect solution. The bureaucratic structure gives all the importance and power to the top level management. And the rules and levels of authority are just too much. It gives a greater sense of security to the employees. But bureaucratic management gives window for red-tapism.

Analysis:
Financial Ratios Analysis Financial data has been collected from last three annual reports. Industry included the Karachi Electric Supply Company, Kot Addu Power Company, Japan Power Plant and Southern Electric Power Company. Liquidity Ratios Current Ratio(Favorable Result)

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2 1 0
WAPDA INDUSTRY AVERAGE

2007
2 1 0

2008

2009
Fig (a)

Quick Ratio (Favorable Result)

WAPDA INDUSTRY AVERAGE

2007

2008

2009
Fig (b)

Interpretation: Liquidity ratios refer to position of company extent to meet with its short term obligations. On the basis of financial statements given in annual reports, current and quick ratio has been calculated and compared with the industry average. The results are quite satisfactory. Both current and quick ratios are above 1 as fig (a) and Fig (b) means that WAPDA has more current assets as compared to current liabilities. Compared to Industry average this is below 1. It is also inferred that WAPDA has sufficient working capital to manage its normal day to day operations. There is one alarming point which must be consider by the management of WAPDA that is large portion of current assets consisted of accounts receivables. Leverage Ratios
Debt-to-total asset ratio (Favorable Result)

0.8 0.6 0.4 0.2 0

WAPDA INDUSTRY AVERAGE

2007

2008

2009

Fig (c) Debt-to-equity ratio (Favorable Result)

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4 3 2 1 0

WAPDA INDUSTRY AVERAGE

2007
Fig (d)

2008

2009

Interpretation: Leverage ratios estimate the position of firm with respect to firms capital structure; basically it calculates the portion of debt compared to other modes of financing. Debt-to-total asset ratio calculates the percentage of total funds provided by the creditors. As per figure (c) WAPDA has portion of debt less than 40% of total funds Compared with the industry average which have more than 60% of their total funds consisted of debts. Debt-to-equity ratio calculates the percentage of total funds provided by creditors as compared versus by owners. Compared with industry average as shown in Fig (d) it is quite satisfactory. If we simplify the graph result it is like this Debt : Equity : : 33% : 67% compared to Industry average which totally opposite Debt : Equity : : 67% : 33%. Activity Ratios
Fixed Asset Turnover (Unfavorable Result)

1.5 1 0.5 0
INDUSTRY AVERAGE WAPDA

2007 2008 2009

Fig (e) Total Asset Turn over (Unfavorable Result)

0.8 0.6 0.4 0.2 0

WAPDA INDUSTRY AVERAGE

2007
Fig (f)

2008

2009

Interpretation: Turnover Ratios calculates to what extent the firm is utilizing its fixed and total assets to generate business i-e sales. Both Fixed and Total asset turnover ratios as per fig (e) and fig (f) are below industry average which shows the ineffectiveness and inefficiency of operations and management. It also refers to wastage of resources. Profitability Ratios
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,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,a Water and Power Development Authority ,,,, Gross Profit Margin (Favorable Result)

15 10 5 0

WAPDA INDUSTRY AVERAGE

2007
Fig (g)

2008

2009

Operating Profit Margin (Favorable Result- but alarming)\

10 5 0
WAPDA INDUSTRY AVERAGE

2007
6 4 2 0 -2 -4
Fig (i)

2008

2009

Fig (h) Net profit Margin (Favorable Result- but alarming)

WAPDA INDUSTRY AVERAGE

2007

2008

2009

Interpretation: All the three profitability as per fig (g), fig (h) and fig (i) are well above industry average but there must be point of concern for management that profit margins of WAPDA are not growing. WAPDA is only sustaining its profit with little decline compared with industry average which is growing with progressive percentages. The one reason is that due to shortage of electricity the business of private Ltd. Companies is growing. WAPDA is purchasing electricity from them and also WAPDA is paying big amounts to pay rents of rental power plants. So the expenses are increasing with increasing rate which negatively affected the profits of WAPDA.

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Internal Factor Evaluation

Weight Key Internal Factors Strengths 1 2 3 3 4 5 6 7 8 9 No Direct Competitor Government Support Tax Evasion Big Infrastructure/well established operations Economies to Scale Technical Competency Control over Resources Low Employee Turnover Strong Financial Standing Growing Demand of Electricity 0.05 0.04 0.02 0.05 0.04 0.05 0.05 0.03 0.05 0.03 4 3 3 4 4 4 4 3 4 3 0.2 0.12 0.06 0.2 0.16 0.2 0.2 0.09 0.2 0.09 Rate* Weighted Score

Weaknesses 1 2 3 Corruption Weak Management Very low delegation of authority/No team work/lack of employee empowerment Lack of HR Dept to Develop Human Resources Record is maintained manually (Lack of MIS) Lack of Civil Eng. Skills Poor Reward System Low Morale Employees/ Time wastage during office hours Inefficiency and wastage of resources Cost Over run Lack of R & D department 0.07 0.15 0.05 1 1 1 0.07 0.15 0.05

4 5 6 7 8 9 10 11 TOTAL

0.05 0.04 0.05 0.03 0.05 0.03 0.02 0.05 1.00

1 1 1 1 1 1 2 1

0.05 0.04 0.05 0.03 0.05 0.03 0.04 0.05 2.13

*1 = Major weakness, 2= Minor weakness, 3= Minor Strength, 4= Major Strength

The score 2.13 indicate the very weak internal position of WAPDA. WAPDA has control over resources, technical competency, good financial position and high demand but still not performing? The main reason is that company has serious flaws in the management as indicated by given rate. The management plays decisive and key role in large organizations. There is no planning particularly long term planning in WAPDA. In year 2000 it was certain that the demand for electricity would be increased rapidly next few years. But there was not
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,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,a Water and Power Development Authority ,,,, seen any serious on ground planning had been done to meet with the growing demand. There is lack of vision. Management is only focusing on day to day activities. Most of the time management starts planning after the need or problem has been arisen. Following strategies is adopted to strengthen WAPDA internally. One of the main reasons of lack of planning and corruption is absence of MIS department in WAPDA. All the data is maintained manually. No proper standards and unity of format to record and maintain data. Decisions made just on verbal feedback. Audit system is not affective. There is MIS system which is covering all the departments. And Site offices and branches is linked with WAPDA House Lahore through WAN connection. Privatize WAPDA like PTCL which is also government organization but after the privatization had been done, its performance improved. It will improve the management of WAPDA. And also corruption will be control. At least a Career Development Cell is established to recruit capable employees within and from open market to locate them in proper places and responsibilities. Promotions is on performance bases.

External Factor Evaluation

Key Internal Factors Opportunities 1 2 3 3 4 5 6 Potential Capacity of 50,000 MW through Hydel means China is interested to take new Mega Projects Privatization Joint Venture or Partnership Subcontracting to private Cos in distribution and new projects Growing Economy Can Export electricity if Vision 2025 has successfully been achieved Weight Rate* Weighted Score

0.08 0.10 0.06 0.07 0.07 0.09 0.02

2 3 1 1 1 2 2

0.16 0.30 0.06 0.07 0.07 0.18 0.04

Threats 1 2 3 4 5 6 7 Law & Order Situation Change of Government Policies/Political Instability Environment Changes/ Natural Disasters, as most of the Dams are in Hilly Areas Political Terms with Neighbor Countries Borders Situation Rise of Construction Costs Contractors bargaining 0.12 0.15 0.03 0.05 0.02 0.06 0.08 2 2 3 2 2 2 1 0.24 0.30 0.09 0.10 0.04 0.12 0.08

1.00 1.85 TOTAL *1 = Response is poor, 2 = Response is average, 3 = response is above average and 4 = Response is superior EFE score 1.85 tells that WAPDA external situation is alarming. Numbers of external factors are affecting WAPDA negatively.

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,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,a Water and Power Development Authority ,,,, Following strategies would be suitable as per EFE analysis: As WAPDA has huge potential capacity of 50,000MW. But due to Lack of funds for new projects WAPDA is unable to cash this huge potential. At the same time China offers Government of Pakistan for development of new projects. Joint venture or contract with China would be very suitable option to meet with energy demand in future. The main reason of lacking of consistent policies in WAPDA is dependence on the Government policies. WAPDA should strengthen internal system of organization and to make independent policies considering what-if analysis. It will help WAPDA to sustain its policies with may be little variation even in case of change of government. As in number of Mega Projects are in line. There will be billions of business in construction sector. WAPDA is paying billions to contractors. WAPDA should have developed its own Construction material factories to gain economies of scale. Law and order and border situation is also threat for WAPDA, as number of times due to bad terms with neighbor country, WAPDA faced blockage or shortage of water in DAMS. Department tours to neighbor country would help smooth relations.

The Grand Strategy Matrix for WAPDA:

Rapid Market(Industry) Growth WAPDA

Weak Competitive Position

Strong Competitive Position

Slow Market(Industry) Growth

Interpretation: As Energy sector in Pakistan is growing very rapidly. The demand for electricity is increasing. As mentioned in earlier section that WAPDA has no direct competitor, so it has very strong competitive position i-e monopoly in the market.
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,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,a Water and Power Development Authority ,,,, Suggested Strategies: WAPDA should focus on the market development and should make proper capacity building program to enhance the capacity for generation of electricity. As WAPDA has excess resources and well established big infrastructure, if there is opportunity WAPDA should go for backward, forward and horizontal integration. As already WAPDA has its own distribution channels, so there is no need of forward integration but there is room for betterment to develop distribution channels as electricity is wasted to large capacity due to line losses. WAPDA has been seriously lacking in Civil Eng. Skills. For new projects, it has to rely on contractors. It is Billion dollar businesses. For cement and other construction material WAPDA should have develop its own plants. As WAPDA has government support, control over resources and strong competitive position. So WAPDA should take risk to go for new MEGA projects to overcome the shortage of electricity in the country.

SWOT MATRIX of WAPDA:

1 2 STRENGTHS No Direct Competitor Government Support Tax Evasion 3 4 5 6 7 8 9 10 Growing Demand of Electricity 10 11 12 OPPORTUNITIES Potential Capacity of 50,000 MW through Hydel means 1 SO STRATEGIES Rent out distribution Channels to contractors and focus on capacity building program to enhance generation capacity i-e new Mega Projects. (S4, O5) Beside new Mega projects also starts small projects and alternative energy ways also be a good option. (S7, O6) Technical Competency Control over Resources Low Employee Turnover Strong Financial Standing 6 7 8 9 Big Infrastructure/well operations Economies to Scale established 4 5 1 2 3 WEAKNESSES Corruption Weak Management Very low delegation of authority/No team work/lack of employee empowerment Lack of HR Dept to Develop Human Resources Record is maintained manually (Lack of MIS) Lack of Civil Eng. Skills Lack of funds for New Mega Projects Poor Reward System Low Morale Employees/ Time wastage during office hours Inefficiency and wastage of resources Cost Over run Lack of R & D department WO STRATEGIES

China is interested to take new Mega Projects Privatisation

3 Joint Venture or Partner ship Subcontracting to private distribution and new projects Growing Economy Cos in

Make contract with China for new Mega Projects (W7, O2) Privatize up to max limit of 49% like PTCL to bring efficiency and optimal use of resources. (W10, W11, O3) In spite of contracts make Partnership and joint ventures with Construction, steel and Cement Companies. (W6, O4)

Can Export electricity if Vision 2025 has successfully been achieved 17 APCOMS

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THREATS Law & Order Situation of country Change of Government Policies/Political Instability 1 Environment Changes/ Natural Disasters, as most of the Dams are in Hilly Areas 2 Arrange WAPDA managements Official tours to neighbor countries for maintaining good bilateral terms. (S2, T4, T5) Political Terms with Neighbor Countries Borders Situation Rise of Construction Costs Contractors bargaining ST STRATEGIES Establish own cement plants for manufacturing inputs for new Mega projects (S7, T6) 1 WT STRATEGIES Joint Venture or Partnership with construction and Cement Companies (W6, T7)

Conclusion and Recommendations:

There is lot of potential in the market and WAPDA has all the inputs which are required to convert this potential to actual but the main hurdle is poor management and lack of strategic vision. Several strategic tools have been applied and relevant strategies are given. Though it is not possible to bring total change in short time but still in my opinion it is right time to positively move toward new changes. Because there is so much pressure on Government regarding this critical issue of electricity and Government will not resist if there is a solid strategic plan and restructuring proposal come from management of WAPDA. Most of the recommendations are given in previous heads, to conclude final recommendations are as follows: The first is regarding restructuring (replace rigid organization structure with responsive i-e revisit the number of officials involve in making a decision and subtract extra links.) Introduction of IT based recording systems within all departments Management training programs should hold for junior, middle and top management. Proper Research & Development Department is established. There is a department directly responsible to Chairman for monitoring and controlling of corruption.

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APCOMS