ON THE PATH

OF
CONTINUAL GROWTH & SUSTAINABILITY

ELECTRICITY
CENTRAL POWER PURCHASING AGENCY MARKET
OPERATOR
CENTRAL POWER PURCHASING AGENCY
ANNUAL REPORT 2018

01
CPP
PA
15 | COMPANY’S PROFILE
COMPANY’S PROFILE | 16
CENTRAL POWER PURCHASING AGENCY

27 | BOARD OF DIRECTORS
 ANNUAL REPORT 2018

07

BOARD OF DIRECTORS

BOARD OF DIRECTORS | 28
CENTRAL POWER PURCHASING AGENCY

7 BOARD OF DIRECTORS

The Company’s Board comprises of seasoned profes- legal and regulatory requirements. The board through its
sionals with broad spectrum of experiences ranging from collective wisdom provides strategic direction to the
policy and finance to engineering and operations. company to ensure that it achieves its goals and objec-
In-terms of institutions, it has members from wide range tives.
of relevant organizations including MoE (PD), Ministry of Currently, CPPA has seven members in its board. Each
Finance (MoF), NTDC, GENCO Holding Company, IESCO, member of the board is well qualified and possesses over
thus striking a healthy balance. The CPPA’s Board 20 years of professional experience in their respective
ensures that the company adheres to corporate gover- fields. Details of the board of directors are as follows:
nance best practices while being complaint with policy,

IRFAN ALI
CHAIRMAN BOD, CPPA

M. ZARGHAM ESHAQ KHAN KHAQAN HASSAN NAJEEB BASIT ZAMAN AHMED

MEMBER BOD, CPPA MEMBER BOD, CPPA MEMBER BOD, CPPA

ZAFAR ABBAS MUHAMMAD IMRAN ABID LATIF LODHI

29 | BOARD OF DIRECTORS MEMBER BOD, CPPA MEMBER BOD, CPPA MEMBER BOD, CPPA
 ANNUAL REPORT 2018

8 COMMITTEES OF BOARD

The Board aims to make CPPA a truly corporate body by Keeping in-view the requirements of a Market Operator in
setting standards at the board level, practicing them and general and the business needs in particular, there are
creating an environment to ensure that good corporate seven committees constituted in CPPA; (a) Audit Com-
practices permeates throughout the organization. The mittee, (b) Procurement Committee, (c) Human
Company’s Board achieves this by constituting commit- Resource Committee, (d) Risk Management Committee,
tees to oversee various key functions of the Company (e) ERP Implementation Committee (f) Finance Commit-
and provide decision making support to the Board. tee, and (g) Nomination Committee.

Total meetings of the Board of Directors and Board Committees held during FY2018 are as follows:

Sr. No. Meeting No. of Meetings Attended

1 Board of Directors 12
2 Procurement Committee of Board 14
3 HR Committee of Board 10
4 Risk Management Committee of Board 09
5 Audit Committee of Board 04
6 Finance Committee of Board 02
7 ERP Implementation Committee of Board 03
8 Nomination Committee 01

Following are the committees and the members included in the committees of the Board:

FINANCE COMMITTEE RISK MANAGEMENT COMMITTEE

Mr. Muhammad Zargham Eshaq Khan (Chairman) Mr. Muhammad Zargham Eshaq Khan (Chairman)
Mr. Mian Muhammad Imran Mr. Mian Muhammad Imran
Mr. Basit Zaman Mr. Abid Latif Lodhi

AUDIT COMMITTEE PROCUREMENT COMMITTEE

Mr. Zafar Abbas (Chairman)

Mr. Muhammad Zargham Eshaq Khan (Chairman) Dr. Khaqan Hassan Najeeb
Mr. Mian Muhammad Imran Mr. Muhammad Zargham Eshaq Khan
Mr. Abid Latif Lodhi
NOMINATION COMMITTEE
HUMAN RESOURCE COMMITTEE
Mr. Irfan Ali (Chairman)
Dr. Khaqan Hassan Najeeb (Chairman) Mr. Zargham Eshaq Khan
Mr. Muhammad Zargham Eshaq Khan Dr. Khaqan Hassan Najeeb
Mr. Mian Muhammad Imran
Mr. Abid Latif Lodhi ERP IMPLEMENTATION COMMITTEE

Dr. Khaqan Hassan Najeeb (Chairman)

Mr. Muhammad Zargham Eshaq Khan
Mr. Basit Zaman

COMMITTEES OF BOARD | 30
CENTRAL POWER PURCHASING AGENCY

Finance

Information
Office of Company Technology
Secretary

CPPA Technical
Strategy & Market
Development

Human Legal & Corporate

Resource Affairs

Policy, Governance &

Corporate Planning

33 | DEPARTMENTS OF CPPA
 ANNUAL REPORT 2018

10

DEPARTMENTS OF CPPA

DEPARTMENTS OF CPPA | 34
CENTRAL POWER PURCHASING AGENCY

10. DEPARTMENTS OF CPPA

CPPA as an organization composed of eight functional departments to perform its major core and support functions.
The departments are (i) Finance (ii) Technical (iii) Legal and Corporate Affairs (iv) Strategy and Market Development
(v) Human Resources and Administration (vi) Information Technology (vii) Policy Governance and Corporate Planning,
and (viii) Office of Company Secretary:

10.1 FINANCE DEPARTMENT

All financial matters of CPPA, both internal and manual processing to ERP automation. CPPA is now
external are performed by this department. The fully reconciled in terms of balances with the IPPs
core functions which are performed under this due to this intervention
department for CPPA includes: • Achieved successful completion of the audit
• Billing and Settlements by AGPR, Government of Pakistan for the periods
• DISCOs and Bulk Consumers Billing FY2017 and July 2017 – March 2018
• Internal Accounting • Prepared SOPs for the process of ‘Payment
• Market Accounting to Contractors/Suppliers’ in alignment with the ERP
• Treasury resulting in a reduced payment processing time for
all internal and external suppliers
10.1.1 YEARLY ACHIEVEMENTS • Performed day-to-day financial and admin-
istrative operations of the CPPA under the Power
Following are some key achievements accom- Sector Framework, CPPA Policies and Book of
plished by this department during FY2018: Financial and Administrative Powers
• Successful commencement of the invoice • Achieved successful completion of the stat-
processing and payment to the IPPs through cen- utory audit of the Financial Statements pertaining
tralized database of ERP ledger payment system, to FY 2017
resulting in reduction in processing time as well as
level of efforts of the staff
• Complete reconciliation of settlements and
balances with the IPPs before switching from

“The way CPPA has emerged as a successful independent entity

over the last couple of years is marvelous; the progress is contin-
ued at much faster pace. Under the present management, the
finance section is fully aligned to take up its new role in the
upcoming competitive electricity market regime. Invoice process-
ing has been fully automated, online invoice submission through
ERP portal is ready for launching, tripartite power purchase
agreements are under negotiations. The capacity building of
DISCOs and other market participants is being carried out for
managing the future bilateral Power Purchase Agreements. I, as a
proud members of CPPA finance team, extend full commitment to
fly together into the new horizons of Wholesale Electricity Market
Operations in the country”

Assad Ullah Ch.,

Manager Finance, CPPA

35 | DEPARTMENTS OF CPPA
 ANNUAL REPORT 2018

10.2 TECHNICAL DEPARTMENT

This department manages the procurement of • Coordination with PPIB, AEDB, MoE (Power
power and energy on behalf of DISCOs through Division), MoF, Ministry of Law, and other
negotiating and finalizing Power Purchase Agree- governmental agencies
ments (PPAs) and Energy Purchase Agreements • Meter Readings Management
(EPAs) with the generators. In addition, the Techni- • Supplier and NTDC Invoice Verification
cal Department is also responsible for the verifica- • Meter Audit
tion of the invoices raised by the NTDC and genera-
tors. The core activities of this department include: The following table shows the total number of PPAs
and EPAs being managed by this department, seg-
• Procurement of power on behalf of DISCOs regated by fuel type and commissioning of plants:
• Establishing contracts for supply

Sr. No. Technology / Type Number of Agreements (as of June 2018)

Commissioned To-be Commissioned Total
PPA's / EPA's
1 Wind 23 1 24
2 Solar 6 0 6
3 Bagasse 6 3 9
4 RFO/Gas/HSD/RLNG 36 0 36
5 Coal 2 6 8
6 Nuclear 4 0 4
7 Hydel 22 3 25
Total 99 13 112

10.2.1 YEARLY ACHIEVEMENTS

Following are some key achievements accom- “ Being an Engineer, I believe that an engineer’s job must
plished by this department during FY2018: offer technical learning and a productive environment
where all the engineering capabilities could be fully utilized.
• Contracting a total capacity of 1,650MW Fortunately, I am part of a very capable Technical team and
is deeply involved in power procurement, invoice process-
through signing four (04) Energy/Power Pur-
ing, technical audits, commissioning and contracting man-
chase Agreements with the coal power plants. agement activities. I have learnt a lot in a very short time
• Successful integration of the following quantum and now geared-up to deliver in next phase of market tran-
into National Grid after incurring substantial man sition”.
hours of CPPA-G under the ambit of rights and Sahibzada Abdul Haseeb,
obligations of the power purchaser in the frame- Management Trainee Officer (Technical), CPPA
work of purchase agreements.

Power Plants Commissioned in FY2018 (MW)

Sr. No. Project Type Commissioned
WIND
(MW)
2640
1 WIND 298.4 SOLAR

2 SOLAR 30 HYDEL

3 HYDEL 147 BAGASSE

3633

4 BAGASSE 41
COAL
5 COAL 2,640
6 RLNG 3,633 RLNG

7 NUCLEAR 340 NUCLEAR

Total 7,129.4 41
30 DEPARTMENTS OF CPPA | 36
147 298.4 340
CENTRAL POWER PURCHASING AGENCY

10.3 STRATEGY AND MARKET DEVELOPMENT DEPARTMENT

This department of CPPA leads the development of Trading Bilateral Contract Market (CTBCM) Model
a competitive wholesale electricity market and and Plan to NEPRA for regulatory review
facilitates its implementation in Pakistan. SMD • Prepared a comprehensive report on the
department is also involved in outlining the busi- detailed designing of the CTBCM Model
ness strategy of CPPA along with the preparation of • Established strategic partnership with
the company’s Strategic Plan. The main objectives EPEXSPOT, the European Power Exchange and
of this department are: formed academic alliance with Lahore University of
• Preparation of the Strategic Plan for CPPA Management Sciences (LUMS) by signing MoUs
and facilitating its implementation • Managing successful delivery of the Elec-
• Designing of a wholesale electricity compet- tricity Market Professional (EMP) Program at LUMS
itive market model and its transition road map in collaboration with EPIAS for power sector entities
• Research and document conclusions for the of Pakistan
next stage of market reforms • Arranged USAID grant for the procurement
• Play the role on behalf of CPPA in imple- of state-of-the-art Market Simulation Software
menting the roadmap to develop a competitive Securing funding for other capacity building initia-
market tives and IT upgrade of CPPA and for technical sup-
• Market coordination and development port to NTDC and NPCC is in pipeline
activities including the training and capacity build- • Support to NTDC, NPCC and Planning NTDC
ing of market participants in preparation of forecasts, generation plan and
• Suggesting and building strategic partner- dispatch simulations
ships with global like institutions. • Development of advance Market Simulation
• Market simulations for analysis of market Model with generation, transmission and load data
architecture on prices moving forward by nodes populated in the model. First run of the
• Program management and coordination for model completed
donor funded projects. • Organized five workshops, three interna-
tional exchanges and numerous training sessions
10.3.1 YEARLY ACHIEVEMENTS for NEPRA, SECP, NPCC and CPPA
• Established Electricity Market Team (EMT)
Following is a list of key achievements earned by with members from NEPRA, MoE, NPCC, NTDC,
this department during FY2018: DISCOs, K-Electric, LUMS and NUST
• Submission of the hi-level Competitive

“Having worked in the private sector throughout my professional

career, the decision to switch to a public organization was a bit
challenging, but my first interaction with CPPA during interview
made me believe that this company will be different. The work
culture that I found here was completely different from the per-
ception of public sector organizations”

Nida Mukhtar,
Assistant Manager SMD, CPPA

37 | DEPARTMENTS OF CPPA
 ANNUAL REPORT 2018

10.4 LEGAL AND CORPORATE AFFAIRS DEPARTMENT

The legal department of CPPA plays a pivotal role in 10.4.1 YEARLY ACHIEVEMENTS
its facilitative capacity to ensure the realization of
strategic objectives and is responsible for effec- Following are some key activities performed by this
tively managing and handling legal matters for department during FY2018:
safeguarding CPPA’s interest. This department is • Active participation in the arbitration
committed to providing continuous support to the proceedings at London Court of International Arbi-
all CPPA departments by rendering ready opinions tration (LCIA), International Court of Arbitration
on the applicable laws, advice on the aspects of (ICA) and International Chamber of Commerce
effective contract management as well as legal (ICC)
compliance, remedial and litigation management. • Attended council meetings with the interna-
The main functions of this department are: tional law firms and provide necessary inputs to the
• Enabling CPPA-G in developing practical and Counsel on the cases
logical solutions and addressing issues which • Filed the registration application to NEPRA
pertain to the ‘legal’ domain and defended the case for the registration of CPPA
• Providing maximum legal protection to as a Market Operator
CPPA and its clients in all their supply contracts • Revision of Security package for new EPA/P-
• Affirming all new supply contracts has PA into two parts:
explicit provision for novation and or assignment • Tripartite Agreement (Finalized)
• Ensuring compliance to financial and legal • Bifurcated PPA (Commercial Agreement &
practices and corporate governance Connection Agreement) (In Process)
• Relationship management with the press, • Incorporated necessary amendments in the
public bodies and institutions, parliament and other Memorandum of Articles and Association of the
stakeholders company
• Providing legal advice and support to the • Filed a case to court for the recovery of
other department of CPPA outstanding dues from K Electric, pursuant to the
ECC and BoD decision

“The spirit of team work and its fostering is the

unique hallmark of CPPA which stands to be distin-
guishable from other public-sector organizations.
Synergy through reaching out without barriers is an
exemplary feat in making. We at CPPA, stand
together to face challenges for a vibrant tomorrow”

Hisham Humayun,
Manager Legal, CPPA

DEPARTMENTS OF CPPA | 38
CENTRAL POWER PURCHASING AGENCY

10.5 HUMAN RESOURCES AND ADMINISTRATION

The Human Resources & Administration Depart- • Automation of Company Payroll through
ment (HR/A) provides overall policy direction on ERP system resulting in swift processing and
human resource management issues and admin- disbursement of salaries and claims to the
istrative support functions related to the manage- employees
ment of employees for CPPA. The main functions of • Operationalization of Human Resource
this department are: Information System (HRIS) module of ERP system
• Recruitment & Selection that leads to a decrease in man-hours required
• Onboarding & Placement earlier for manual processing of the HR data and
• Training & Development operations
• Payroll Processing & Disbursement • Organized several training and develop-
• Employee Daily Attendance Record ment initiatives for the employees of CPPA in which
• Employee Terminal Benefits (EOBI, Life, more than 125 participants participated ensuing
Health, Gratuity, PF) teambuilding and employee citizenship behavior in
• Employee Engagement Programs CPPA
• Organizational Restructuring • Acquired new CPPA office building in
• Handling of Disciplinary Cases Islamabad
• Building maintenance, Office Premises • Hired the services of Pakistan Testing
Safety & Security Services (PTS) for the whole recruitment cycle
including shortlisting and testing of applications
10.5.1 YEARLY ACHIEVEMENTS thus making the recruitment process more trans-
parent
Following is a list of key achievements earned by • Deploying biometric attendance system for
this department during FY2018: marking daily attendance of employees
• Successfully inducted 41 personnel against • Organized a Health Insurance Awareness
different vacant positions resulting in an increase workshop in collaboration of Jubilee Insur
of CPPA-G from 157 last year to 198 this year ance Ltd. for the employees of CPPA

“HR Management is nothing more than motivating

other people to give their best and make them feel good
about how they contribute to the whole. At CPPA, my job
is to connect the dots between individual roles and goals
of the organization. When people see that connection,
they get a lot of energy out of work. They feel the impor-
tance, dignity, and meaning in their job. Seeing employ-
ees of CPPA growing with the organization makes me
feel proud about my work”

Dure Nayab,
Assistant Manager HR & Admin, CPPA

39 | DEPARTMENTS OF CPPA
 ANNUAL REPORT 2018

10.6 INFORMATION TECHNOLOGY

This department of CPPA is responsible for manag- • Successful completion and implementation
ing the IT infrastructure and deployment of neces- of ERP System Phase-I covering the financial verifi-
sary IT systems, tools and applications as per the IT cation of invoices of Power Producers, Billing to
strategy of the company. The main activities of this DISCOs, Treasury Management, Assets Manage-
department are: ment, Agency Operations, and other financial
• Lead the preparation of IT strategy aligned processes as well as the automation of the core HR
with the business strategy and to help functions
implement it • Commencement of ERP System Phase-II
• Design, maintain, and support organiza- involving all the remaining business processes of
tion's information technology infrastructure, thus the organization, particularly, the Technical verifi-
allowing the organization to leverage both informa- cation of Invoices of IPPs, LD calculations, CDP data
tion and technology in an efficient, productive and management, integration with Phase 1, merit order,
secure manner fuel price reporting, management reporting dash-
• Procurement and commissioning of IT hard- board etc.
ware and software to support the business • Initiation of developing a central Data
• Conduct requirement analysis of IT environ- Exchange Portal featuring reliable electronic com-
ment required to support the CPPA in the next munication between power sector participants
phase of market evolution • Initiation of the Enterprise Content Manage-
ment (ECM) System for the automation of unstruc-
10.6.1 YEARLY ACHIEVEMENTS tured data of CPPA
• Deployment of the new Data Center in new
Following is a list of key achievements earned by office building
this department during FY2018: • Established operational partnership of CPPA

“It is generally believed that implementing ERP in a public-sector

organization is a very uphill task. But here at CPPA, the way the
ERP/IT Team, I am part of which, managed the challenging project
of ERP implementation and delivered it right on time is exempla-
ry, This has given me a lot of satisfaction to contribute so much in
so little time to help grow CPPA to where it is right now through
implementation of ERP and other IT initiatives involving automa-
tion of core business processes. I hope that the company would
have more exciting challenges for me in future ahead”

Muhammad Sajid Khan,

Assistant Manager ERP/IT, CPPA

DEPARTMENTS OF CPPA | 40
CENTRAL POWER PURCHASING AGENCY

10.7 POLICY GOVERNANCE AND CORPORATE PLANNING

This department of CPPA provides executive sup- tive implementation of Bagasse Tariff through
port in a one-on-one working relationship with CEO. recovery of fixed cost and future savings of approx.
The main functions of this department are: PKR 50 billion for 30-years thus covering the risk of
CPPA of excess payment for the life of project
• Acting as the primary point of contact for • Developing an interface of the medium term
internal and external constituencies on all matters dispatch tool (SDDP) with the costing module for
related to the functions/ responsibilities of CEO yielding Energy Pricing Projections
especially pertaining to Policies, Governance & Cor- • Prepared proposal of amending existing
porate Planning bagasse pricing mechanism to NEPRA to ensure
• Supporting CEO in development/changes of prevention of bagasse price hike against the dollar
particular power/ energy policies for sustainable and imported coal price
power market operations and to reduce liabilities • Prepared detail structure/proposal to Minis-
and guarantees of Government of Pakistan try of Energy for procurement of power under legal
• Facilitation in internal development and and regulatory framework, thus to ensure aligned
streamlines operations to align with the prevailing and coordinated approach of all the entities of the
policies power sector for striking the common goal
• Collaboration for the strategic initiatives • Prepared a concept paper for devising
being taken in the sector for long term sustainabili- mechanism for the determination of uniform end
ty consumer tariff, in wake of amended NEPRA Act
• Suggested modification in the Merit Order in
10.7.1 YEARLY ACHIEVEMENTS accordance with the Grid Code in order to align it
with the changing regime of take-or-pay to
Following is a list of key achievements earned by take-and-pay
this department during FY2018:
• Developed a mechanism for the monitoring
of Circular Debt
• Suggested process improvement for effec-

“I was working with a public sector company before

joining CPPA. I found remarkable difference in the work
environment of two public sector organizations. CPPA’s
culture is team oriented, caring and robust. Even the
senior most management addressed my queries and
concerns”

Mannan-ul-Haq,
Management Trainee Officer (PG&CP), CPPA

41 | DEPARTMENTS OF CPPA
 ANNUAL REPORT 2018

10.8 OFFICE OF COMPANY SECRETARY

The Office of the Company Secretary maintains 10.8.1 YEARLY ACHIEVEMENTS

compliance of SECP Act, 2017 and Public-Sector
Companies (Corporate Governance) Rules 2013. Following is a list of key achievements earned by
The other functions of this office are: this office during FY2018:
• Engagement of External Audit and prepara
tion of Directors Report • Maintained compliance of CPPA-G with the
• Organizing important hi-level meetings for relevant principles of corporate Governance
CPPA-G including Annual General Meetings / as per Public Sector Companies (Corporate
Extra Ordinary General Meetings (EoGMs) Governance) Rules, 2013
Board meetings and Board Committee • Organized 12 Board of Director’s Meetings
meetings, and Commercial Code Review • Organized 45 meetings of different Board
Panel (CCRP) meetings Committees
• Maintaining documentation of above men • Maintained documents of all the Board and
tioned meetings Board Committee meetings held during the
• Provide Secretarial support to the General year
body, Board of Directors, Board Committees • Coordinate with the External Auditors for the
and CCRP competition of Statutory Audit of the Com
• Follow-up implementation on the General pany and Compliance Audit Public Sector
body, Board of Directors, Board Committees Companies Corporate Governance Rules,
and CCRP decisions 2013 for the F.Y 2017-18
• Improved Corporate Governance Rules
Compliance for FY2018
• Secured exemption of CPPA Employees Gra
tuity Fund and Employees Provident Fund

“Since joining CPPA I’ve learned so many new things.

Colleagues taught me about the power sector and
shared their knowledge and experience with me. I will
always be thankful to the people who believed in me and
gave me this opportunity to grow, not only within the
company but also as a person. At CPPA I have learned so
much and motivated to continuing my career at this
exceptional company”

Babar Iqbal,
Assistant Manager,
Office of the Company Secretary, CPPA

DEPARTMENTS OF CPPA | 42
CENTRAL POWER PURCHASING AGENCY

S
S TEM S
I N E
S Y S
B U S

43 | ACTIONS & PLANS

 ANNUAL REPORT 2018

11

ACTIONS & PLANS

ACTIONS & PLANS | 44

CENTRAL POWER PURCHASING AGENCY

11 ACTIONS & PLANS

This section highlights the actions and plans for model is being approved. This phase is envisaged to
improving the operational performance and infor- be completed by end of the year.
mation transparency of CPPA as well as for efficient During Phase-III, the implementation phase, all
implementation of the market model and achieve entities will implement the initiatives as per the
the objectives of the Commercial Code and Market approved timelines in the CTBCM Plan. This phase
Rules for the development of the competitive power has also kicked-off in parallel with implementation
market. The following sections discuss the steps of certain essential building blocks for any phase of
taken and the plans underway to achieve the the market to operate effectively.
above-mentioned objectives.
The overall approach towards developing and imple-
11.1 MARKET DEVELOPMENT menting a competitive market revolves around
People, Processes and Technology. On the people
CPPA has been working towards transition of the front, the restructuring of the organization is going.
existing market from the single buyer model to a In addition, the capacity of the relevant personnel is
competitive wholesale power market by 2020. The being enhanced through various innovative market
FY2018 saw a rapid increase in the pace of market workshops and training programs such as EMP. An
development activities. Until now, the company has Electricity Market Team (EMT) has been formulated
strived hard not only to build its internal capacity which includes the members from the relevant
in-terms of people, processes and technologies but power sector entities to facilitate the transition
also to assist the other power sector entities to scheme.
become partners in this journey. However, with the
expected regulatory approval of the proposed As far as the processes are concerned, work is being
market model, the quantum of market development carried out on aligning the legal and regulatory
activities would increase manifolds with the framework with the proposed market model, NEPRA
advancement in detailed designing and its imple- act has been amended which includes the provision
mentation in the coming two years. of a competitive market in Pakistan, commercial
code and grid codes are being revised to adopt the
The market development strategy was divided into suggested changes, IGCEP plan is being prepared
the following three phases: The Phase-I included (a) for the very first time, DISCOs are being facilitated to
research and study of global competitive markets, generated PMS based demand forecasts etc.
(b) capacity building of market entities, (c) propos-
ing the market model and CTBCM Plan for Pakistan Talking about the Technology, CPPA-G is not only
through a consultative process, (d) building strate- automating its business processes and IT infra-
gic partnerships with Market Operators globally and structure but also facilitating NPCC and NTDC to
(e) submission of the CTBCM model and plan for enhance their performance by deploying state of the
approval. This phase started in mid of 2016 and art generation planning, forecasting and simula-
ended in June 2017 and the CTBCM model and plan tion/modeling tools such as unit commitment and
is in the regulatory approval process with NEPRA. short-term forecasting tools for NPCC, medi-
um-term forecasting and generation planning tool
The Phase-II is the detailed market design phase in for NTDC, market price simulation tools and allied IT
which the detailed design of the market model is equipment and infrastructure.
being developed. This phase started in June 2017,
and the CPPA- team has been working on the Next year, as soon as the approval for the CTBCM
detailed designing of the proposed model. This model and plan is obtained, the detailed design will
include layout of new market contracts, transfer and be finalized (entailing action on 17 group-actions
allocation of pre-existing contracts, transmission identified under the CTBCM plan), the assistance to
losses treatment in wholesale market, balancing market participants will be accelerated through
quantities and settlement mechanisms. The team is Market Implementation Monitoring Group (MIMG),
also working on the basic must do items while the internal restructuring design of CPPA will be
45 | ACTIONS & PLANS
 ANNUAL REPORT 2018

completed, strategic partnerships with one another be completed by mid of 2019.

centrally dispatched competitive market will be
established. To commence the wholesale competi- PHASE-III: Alignment with Future Business Needs
tive market by mid of 2020 will be an uphill task, but As soon as CPPA would moves closer towards the
with all power sector entities performing their part implementation of competitive electricity market, in
as planned, this goal can be achieved within the order to avoid conflicts of interest and ensure trans-
specified time. parency, CPPA will require a significant restructuring
of the organization, the business processes and the
11.2 ORGANIZATIONAL RESTRUCTURING supporting IT systems. To ensure a smooth transi-
tion into the CTBCM environment, the CPPA will
CPPA-G being a relatively young company requires restructure itself into two separate business units
the configuration of the overall functional structure representing the Market Operator (MO) and the Spe-
and organizational hierarchy of the company in the cial Purpose Supplier (SPS). Another independent
light of the existing operational objectives as well as service provider, the Independent Auctions Adminis-
the future business needs of the company. There- trator (IAA) has also been proposed.
fore, organizational restructuring of the CPPA is
being carried out is which is divided into three The strategy proposed is to initially operationally
phases; (i) restructuring from business perspective separate CPPA into these two entities and then go
to align the organization with current business need for legal separation. Once created, while still report-
(ii) restructuring from HR perspective, for inter ing to the CEO CPPA, the new units will work inde-
alignment and optimization of business processes pendently of each other, and once both units can
and (iii) restructuring from a future business perform individually, these units will be legally sepa-
perspective i.e. to align the company with the rated. The proposal of restructuring was submitted
proposed new electricity wholesale competitive to the Board of CPPA and was approved.
market. These phases are discussed in the following
paragraphs: In anticipation of the approval of the market model
and the plan, CPPA with its consultants have already
PHASE-I: Alignment with Current Business Needs initiated the detailed design under this action. The
The Phase-I of the restructuring involved the reor- design of the market model calls for the transfor-
ganization of its business structure, in line with the mation of the current CPPA into two separate enti-
functions of market operator with a focus on exist- ties.
ing business needs of the company. This phase was
completed last year when the organization under- 11.3 IT STRATEGY SYSTEM AUTOMATION &
went a number of changes. During this phase, some INFRASTRUCTURE UPGRADATION
departments were revamped while some new units
like ERP, Strategy and Market Development (SMD), The pattern of emergence of technology and direc-
Policy, Governance & Corporate Planning (PG&CP) tion of organizational change both are sensitive
were created and became operational by deploying towards one another. There is a one-to-one rela-
staff. tionship between business strategy and IT strategy
of an organization and therefore, it is of utmost
PHASE-II: Restructuring from HR perspective importance to come up with a matching IT strategy
The Phase-II of organizational restructuring that is fully aligned with the business strategy to
requires CPPA to align the HR requirements with the successfully accomplish the desired transition.
operational obligations of each department. This
phase remained in progress during the year The strategy formulating; strategy implementing
2017-18. During the Phase-II of restructuring, the and action taken based on it are always based on
skills, resources and strength of the Technical, IT, HR information. Information also has to be processed
& Admin and Legal departments were optimized. quickly, accurately and consistently through the
This phase will remain in continuation for a while application of management information system
until the complete restructuring of Finance, Policy implemented. Information Technology application
Governance & Corporate Planning (PG&CP) and SMD provides benefits of speed, accuracy and consisten-
Departments is carried out from the HR perspective. cy.
The plan For Phase-III is being implemented and will
ACTIONS & PLANS | 46
CENTRAL POWER PURCHASING AGENCY

The CPPA’s management has the vision to under- There are several projects in pipeline to be imple-
stand information technology and how to use it mented as per IT Strategy of CPPA which mainly
effectively by integrating management information include the establishment of new data center,
system with their strategic process and which in establishment of disaster recovery data center,
turn makes great support to business objectives. At information security management, applications for
CPPA the information technology based systems are CTBCM, case management, record management,
playing a critical role in developing and supporting business process management, video conferencing,
the accomplishment of business goals and objec- certification of ISO 27001, data exchange portals,
tives which are formulated through the strategic trading system for bilateral contracts, surveillance
management process. system, data institutionalization, data warehousing,
business intelligence/ data mining, IT services man-
Currently at CPPA there are several strategic nature agement, power exchange system, e-evasion
projects in progress targeting to achieve the organi- system, spot market settlement system, portals in
zation as well as the power sector goals. The Enter- system for energy settlement and COBIT certifica-
prise Resource Planning Phase 1 has been complet- tion.
ed by automating the back office processes of CPPA
and EPR Phase II is in progress which complete the 11.4 ESTABLISHMENT OF TIER III DATA
process automation within CPPA as well as also CENTER FOR MARKET OPERATOR
integrate the business processes of other stake-
holders of power sectors by providing them a cen- As per the approved Restructuring Plan of CPPA, it
tralized and secure platform to receive and dissemi- will require a state-of-the-art information technol-
nate the information required for decision making ogy infrastructure with all the allied technologies
individually and as a whole sector. The Enterprise and relevant software / hardware to cater for the
Content Management system has also been data management, handling, storage and security
launched to automate the un-structured data of the requirements of both the Functional Units i.e. MO
organization and make it available to the all the con- and SPS. The existing infrastructure is good enough
cerned on the click and will also be integrated with to cater for the requirements of SPS for next few
the ERP systems of the organization to build a cen- years but for MO Function, the new IT infrastructure
tralized repository of the data. This solution will lead is required.
towards the record management, case manage-
ment and business process management solutions.

47 | ACTIONS & PLANS

 ANNUAL REPORT 2018

For the MO Function, following activities are 11.5 BUILDING IN-HOUSE SOFTWARE
planned: DEVELOPMENT TEAM
• Establishment of Primary Data Centre
• Establishment of new Data Center Facility Considering the importance of emerging challenges
• New Data Center Equipment (Servers, Stor being faced by the power sector and the growing
age, Network equipment etc.) role of CPPA as Market Operator, the CPPA has
• Establishment of Disaster Recovery Site decided to build its own in-house software develop-
• Establishment of DR Site Facility ment team. It will be a team of professionals to
• DR Site Equipment (Servers, Storage, Net maximize the customization of in-house software
work equipment etc.) development process as per company needs. Inter-
• Implementation of Software Applications / nal specialists master their skills in building the
Licenses project CPPA started and soon become narrowly
focused professionals of the highest level. This
In this regard, the planning work has been complet- reduces bugs and in addition, it means that the sup-
ed and the work on establishment of the new data port will be straightforward and efficient, and the
center for Market Operator is going to be started company will be able to maintain the product inde-
soon. pendently. For this purpose, the work on building the
team has been started and step by step the support
of the on-going projects will be taken over by the
CPPA’s own IT specialists.

ACTIONS & PLANS | 48

CENTRAL POWER PURCHASING AGENCY
CENTRAL POWER PURCHASING AGENCY

69 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

14

AUDITOR’S REPORT & FINANCIAL STATEMENTS

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 70

CENTRAL POWER PURCHASING AGENCY

71 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 72

CENTRAL POWER PURCHASING AGENCY

73 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 74

CENTRAL POWER PURCHASING AGENCY

75 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 76

CENTRAL POWER PURCHASING AGENCY

77 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 78

CENTRAL POWER PURCHASING AGENCY

79 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 80

CENTRAL POWER PURCHASING AGENCY

81 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 82

CENTRAL POWER PURCHASING AGENCY

83 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 84

CENTRAL POWER PURCHASING AGENCY

85 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 86

CENTRAL POWER PURCHASING AGENCY

87 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 88

CENTRAL POWER PURCHASING AGENCY

89 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 90

CENTRAL POWER PURCHASING AGENCY

91 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 92

CENTRAL POWER PURCHASING AGENCY

93 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 94

CENTRAL POWER PURCHASING AGENCY

95 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 96

CENTRAL POWER PURCHASING AGENCY

97 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 98

CENTRAL POWER PURCHASING AGENCY

99 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 100

CENTRAL POWER PURCHASING AGENCY

101 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 102

CENTRAL POWER PURCHASING AGENCY

103 | AUDITOR’S REPORT & FINANCIAL STATEMENTS

 ANNUAL REPORT 2018

AUDITOR’S REPORT & FINANCIAL STATEMENTS | 104