Political compulsions and bureaucratic officialdom often play a major role in sweeping under the carpet issues requiring urgent attention. Sometimes matters remain unresolved for decades as in the case of Pakistan’s energy crisis which, according to the government’s estimates, is resulting in a two percent decline in the country’s Gross Domestic Product (GDP) per annum.
The government has slogged its guts out to draft a blueprint for the power sector reforms, but political compulsions have come their way. The reforms call for implementing a differential tariff for distribution companies (DISCOs). This would create problems for the government and its allies, as the power tariff for non efficient DISCOs in Sindh, Khyber Pukhtoonkhwa and Balochistan will become costlier than the ones in Punjab. This would put the coalition government in a difficult situation as the PML-N would cash in on the opportunity even thought it has no role in the issue.
The tariff determined by the National Electric Power Regulatory Authority (NEPRA) for DISCOs is implemented on a uniform basis. The difference ends up in direct subsidy for DISCOs. Making matters worse, the government has withheld the subsidy that has snowballed into a whopping Rs 360 billion.
Castigating the government for the lingering power crisis, former secretary planning Fazal Ullah Qureshi says the determined tariff should be passed on completely to consumers. He says the government needs to carry out cost benefit analysis of whether it is prudent to spend billions of rupees on roads in Larkana and Multan or on the energy sector. He says WAPDA’s longstanding projects should be expedited on a war footing.
The reforms call for introducing corporate culture in the power sector and making it ready for privatization. Hiring professionals on competitive salaries and use of technology; especially smart meters, are must for reforming the sector. This means that the ministers and the mandarins of the ministries of water and power, petroleum, finance and the Planning Commission will have no role in appointments, postings and transfers, and award of tenders. Despite claims that DISCOs are fully autonomous, the fact remains that the Ministry of Water and Power still interferes in their administrative matters while their financial matters are controlled by the Ministry of Finance.
Former Finance Minister Shaukat Tarin has said many times the privatization of state-owned entities could only take place if they are brought out of the control of their parent ministries. Reforms call for inducting professionals into regulatory authorities which have become cozy abodes for retiring bureaucrats. Granting power to regulatory authorities is seen as weakening of government authority by politicians and bureaucrats, as an independent regulator would also question their moves. The ministers and bureaucrats are worried over the strong stance taken by the Karachi Electric Supply Company in official meetings even though DISCOs and PEPCO have a humble approach.
Despite repeated claims on energy conservation, no practical steps have been taken which could have resulted in saving 2000 to 3000 megawatts of electricity. Full capacity utilization would also have helped in increasing power output as the country has installed electricity generation capacity of 21,000 MW on June 30. However, the generation remains 14,000 MW as compared to demand of 18,000 MW. Tapping renewable energy resources targeted to generate 1000 megawatts of electricity also remains at a dismal stage,
The available choices before the government may seen to be tough under the prevailing circumstances, but considering the importance of energy as the basic engine of growth these are necessary for sustainable development.