The importance of public enterprises is now a universal phenomena used to achieve the desired social and economic objectives. They are considered to be the most effective form of organisation for implementing public policies and development programmes especially in the less developed countries. The growth of PSEs showed a significant shift in economics and social thinking between the 19th and 20th centuries and it is universally recognised that the jurisdiction of the state is not to remain confined to mere supervision or regulation. The prerogative of the state to intervene in the economic activities and indeed to directly participate in it has been fairly well established in the modern governments and has been legally legitimated and socially accepted.
During the last three years, the PSEs (PIA, WAPDA, Steel Mills, TCP, Railways National Highways, Utilities Stores Corp etc.) have become a headache for the government & its finances, swallowing Rs600 billion and in spite of an injection of billions of rupees, they have gone from bad to worse. And in this space it is suggested that:
1. PSEs are accountable for achievement of the national goals and respite to the public which miserably failed.
2. At the operational level. Internal audit, management ratios, cost and budget control and effective supervision are some of the techniques for ensuring desired level of efficiency.
3. Lack of professional management and qualified staff, suppression of full information about PSE activities, weakness of parliamentary institutions, weak political leadership, appointment of undeserving crones as dead and mass scale employment of unskilled staff are some of the factors which serve as constraints to an effective system of accountability.
The general question that a cost benefit analysis sets out to answer is the status of a number of projects. But why bother with cost benefit analysis at all? The answer is provided by the familiar thesis that what counts as a benefit or a loss to one part of the economy to one or more persons or nation as a whole. In cost benefit analysis we are concerned with the economy of a defined society and not any particular fraction of it.
One of the most popular applications of cost benefit techniques is that of construction of a Hydel Power station may be small or mega, construction of a reservoir or a dam and the machinery for power generation, flood control or irrigation, tunnels highways, bridges etc.
In the present state of scientific and technical knowledge, it is convenient to list the main energy source under five headings. Four of these can be grouped under the general description: hydro-electric, oil, natural gas, coal and nuclear fuels (both actual & potential) and the fifth is alternative energy.
Electricity is now a serious issue that is bringing people to the streets as they now fed up with long & un-announced load with tremendous hike in the power tariff (98 per cent). The problem is manifold: acute shortage and high rising costs of oil, which have made electricity unaffordable by the poor and middle class – a situation created by relying on IPPs (Independent Power Producers) and Rental Power Plants (wasting Rs72 billion and is under trial in the Supreme Court)
The hydro component has, over the years, dwindled to less than 30 per cent from the peak of 75 per cent. It is unfortunate that a country bestowed with large glaciers and with water flowing from the Himalayan & Karakorum heights has developed only a fraction of its potential. WAPDA has its own trained expert Hydel Engineers but we went around the globe seeking help for the construction of a mall 18 MW Gomal Dam (not yet commissioned) while creating a hype in print & electronic media for 50,000 MW hydel potential. Not a single MW has been added so far!
The 4500 MW Diamer Basha, which was inaugurated by the Prime Minister on 18th Oct 2011 (having already been inaugurated by General Musharraf in 2006), is in doldrums as World Bank is hesitating to fund Rs12 billions, as some portion is in the disputed Kashmir territory and India has already informed the IBRD. A very pertinent question arises why Pakistan’s concerned official pressed the bank immediately when they came to know its intentions, why they remained mum. Our official set up is too inert and suffer from a numbing lack of direction from the political leadership. It owes an explanation to the nation, when the country is under serious power crisis.
In the recent meeting of IEEP there was a joint consensus to build Kala Bagh Dam, where all infrastructure worth Rs30 billion – featuring offices, colonies, schools and hospitals – is available but for a reservoir and power station and can be build in four to five years.
Regarding the 969 MW Neelum Jhelum project which was approved in 1989, an estimated cost was Rs15 billion in June at Rs84.5 billion and is now revised to Rs333.91; showing an increase of Rs249 billion or 296 per cent due to rupee devaluation. The cost of escalation, change in design owing to earth-quack and the use of tunnel boring machines to advance project implementation by 18 months is not justified and got checked through an independent audit team of Auditor General, which will show the inordinate delay and overrun cost of all the hydel power projects including Mangla Raising Project started in 2004 adding 644 million, nothing has been done so far. For the first time in the history of Pakistan, for Neelum Jehlum Project all consumers were charged 10 paisa per unit and the total amount should now be Rs23 Billion. WAPDA has also taken soft loan for this project (IDB $133million, UAE $100million, Kuwait $40 million, OPEC $30million, SADB $80million). India has so far constructed 90 dams as against nil by WAPDA (Pakistan). If Kishan Ganga Project at river Jehlum is commissioned the flow of water for Neelum Jehlum Project will be reduced by 30 per cent to 40 per cent.
In fact the chairman has not proved too successful since his joining, not being an engineer (a retired civil servant) and interestingly during this period generation capacity has been down to 17 per cent. PEPCO is almost depending on IPPs, who had full grip over PEPCO and its management due to shortfall of 5000 MW. He has not been able to lead from the front as is required from the head of institution.
I happened to work as the finance director in WAPDA, the short term remedy lies in augmentation and replacement of machinery of our old hydel & thermal plants, on war-footing basis, which should not take more than a year and save the vicious circular debt now mounted to more than Rs300 billion.
I would suggest that services of Mr Saeed Akhtar Niazi; ex-Member (Power) – a guru of hydel planning construction & generation. Mr Tanzeem Naqvi Ex-Member (Power) a successful chairman and MD KESC. Mr Abdur Rasheed Kakar (elder brother of retired general Waheed Kakar) Sh, Meraj Ahmad MD (Power) as a consultant may be utilised to avoid further damage. All of them are well known for their integrity, competence and dedication.
NEPRA’s contributions could have saved WAPDA and PEPCO in proper monitoring the projects, working of discos, line losses due to theft and other technical reason but it confined only to increase in power tariff. I know Mr Tahir Bashrat Cheema since 1982 (when I conducted enquires of all area boards and many corrupt engineers were removed, was in Multan) during interaction. I have found to be a dynamic, intelligent and well-conversant with WAPDA’s problems is also President IEEP (with dedicated support from Engineers) may be considered for NEPRA for which the Supreme Court has taken a serious exception today for determining the power tariff for non operational or non existing RPPs.
Time is not on our side, strong will and war footing actions are required to rid people of Pakistan of this quagmire of shortage of power at the earliest.
