Power sec­tor woes

The Pak Banker - - FRONT PAGE -

Prime Min­is­ter Im­ran Khan has directed the Min­istry of Power to take ur­gent re­me­dial mea­sures to deal with the prob­lem of power theft and mis­man­age­ment in the sec­tor. For decades the peo­ple of this coun­try have been sub­jected to gross pub­lic sec­tor man­age­ment. In the power sec­tor in par­tic­u­lar, mis­man­age­ment ac­counts for more than a tril­lion ru­pees in cir­cu­lar debt to­day, mas­sive loans in­curred by the power sec­tor whose re­pay­ment is de­ferred when due with the in­ter­est payable by con­sumers and last, but not least, through poor se­lec­tion of power gen­er­a­tion projects that are either re­liant on ex­pen­sive fuel ( ex­am­ple fur­nace oil as well as LNG in com­par­i­son to say hy­del) or lo­cated in­ap­pro­pri­ately far from the source of fuel ( coal- fired projects in Pun­jab). In ad­di­tion, the trans­mis­sion and distri­bu­tion sys­tem is ob­so­lete un­able to va­cate en­hanced power sup­ply and power theft re­mains unchecked whose bur­den is again borne by con­sumers through higher tar­iffs.

Sub­sidy through in­ter- disco tar­iff dif­fer­en­tial ( 105 bil­lion ru­pees bud­geted for Wapda/ Pepco and 15.4 bil­lion ru­pees for KElec­tric in the cur­rent fis­cal year) im­pacts on the bud­get deficit with a com­men­su­rate im­pact on in­fla­tion. An In­ter­na­tional Mon­e­tary Fund ( IMF) pro­gramme would im­ply pres­sure to re­duce sub­si­dies as a means to re­duce the deficit, un­less the gov­ern­ment pro­poses a cut in other cur­rent, as op­posed to de­vel­op­ment, ex­pen­di­ture, for ex­am­ple, a vol­un­tary re­duc­tion on de­fence and civil ser­vice ad­min­is­tra­tion. The Pun­jab gov­ern­ment has formed a task force un­der the chief min­is­ter to curb power theft and the rel­e­vant deputy com­mis­sion­ers have been tasked to crack down against power theft in their re­spec­tive dis­tricts. And while the Prime Min­is­ter has directed other prov­inces to fol­low suit no such com­mit­ment has yet been forth­com­ing from Khy­ber Pakhtunkhwa in par­tic­u­lar.

In this con­text, it is rel­e­vant to note that in May this year, the PML- N ad­min­is­tra­tion ac­cused prov­inces of be­ing re­spon­si­ble for fail­ing to check power theft, es­ti­mated at 50 bil­lion ru­pees ( July 2017- March 2018), and the then Power Min­is­ter Leghari claimed that Pe­shawar topped this list with 23.48 bil­lion ru­pee theft, La­hore was re­spon­si­ble for 6.6 bil­lion ru­pee theft, Mul­tan 3.03 bil­lion ru­pees, Faisal­abad 1.5 bil­lion ru­pees, Gu­jran­wala 1.002 bil­lion ru­pees and Is­lam­abad 220 mil­lion ru­pees. A re­port pre­pared un­der the aus­pices of the Se­nate Com­mit­tee on Cir­cu­lar Debt and au­thored by PTI Sen­a­tor Shi­bli Faraz, es­ti­mated power theft of over 53 bil­lion ru­pees dur­ing last fis­cal year with trans­mis­sion and distri­bu­tion losses es­ti­mated at 187 bil­lion ru­pees dur­ing the past five years.

Ex­perts say there is suf­fi­cient ev­i­dence to show that the pre­vi­ous ad­min­is­tra­tions par­tic­u­larly the PML- N, failed in im­prov­ing gov­er­nance which can largely be at­trib­uted to their fail­ure to look at a sec­tor's is­sues in a holis­tic man­ner and then pro­ceed through a well- for­mu­lated busi­ness plan to deal with the pre­vail­ing is­sues. A vi­able plan was clearly lack­ing on a wide- range of mega projects, in­clud­ing the or­ange train, the metrobus ser­vice, where large sums of money were bor­rowed at a non- con­ces­sional high rate of re­turn, the money was then used to hire the ser­vices and pur­chase equip­ment from the lend­ing or­gan­i­sa­tion com­pelling the gov­ern­ment to pro­vide a large an­nual sub­sidy to en­able the peo­ple to ac­tu­ally use the fa­cil­ity.

The PTI gov­ern­ment's stance re­flects a mind­set dif­fer­ent from the past; how­ever, if past prece­dence is any­thing to go by, the PTI ad­min­is­tra­tion may be stopped from tak­ing such in­formed de­ci­sions af­ter it goes on an IMF pro­gramme given the usual method of do­ing busi­ness in this coun­try, i. e., pass­ing on the cost of mis­man­age­ment and poor gov­er­nance onto the pub­lic. One would hope that the Khan ad­min­is­tra­tion pre­pares and ne­go­ti­ates a plan to lower out­lay on other non- de­vel­op­ment ex­pen­di­ture with the IMF.

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.