THE most incorrect assertion regarding progress achieved in the revenue increase from Rs93 to 186 billion by Wapda during the preceding three years made in the last presidential speech before the nation requires a deep study. In fact, the revenues only increased from Rs131 billion to Rs151.5 billion which does not even cater for the increases on account of tariff hikes and demand.

It is thus the time to speak the truth and it is only after this that we stand a semblance of a chance to correct the situation and help in stemming the haemorrhaging taking place, both in Wapda and the KESC, indeed, a major reason for large deficits amassed by the country. The contents of a recent study conducted by the Board of Investment (BoI) also suggests that doing business in Pakistan was not reasonably attractive, while the high utility costs would make the Pakistani product simply uncompetitive with the advent of the WTO.

It would thus be in order to dilate on the Rs41 billion and the Rs17 billion loss sustained by Wapda and the KESC respectively for the last FY and in order to comprehend the magnitude of these losses. It would be appropriate to compare these figures with the sale price of PC’s flagship sale of the UBL— a national financial institution at the price of Rs12 billion. Thus we see that Wapda and the KESC- between them, gobbled up the five UBLs in just one year. In case nothing cogent is done soon, the power utilities—incidentally under the much-heralded direct control and management of the army— would take the nation down the drain. This would be in addition to the complete shutdown of the power sector, which in turn would ensure the death of already dying industrial and agricultural sectors of the country.

In order to tackle the subject we need to revisit 1998, when the then government felt the need to stem the expected losses of Wapda and to meet the requirement to ready the KESC for privatization. It was felt, after the successful pinpointing of ghost schools in the Punjab—ruled by the then prime minister’s most-talented brother— that the above goals could only be achieved through army management. As a consequence, on the prime ministerial orders, management of both the utilities was handed over to the army. It is pertinent to state that for this stupendous task, no special process was adopted and nor any specialists were consulted.

This new dispensation in the shape of an onslaught thus resulted in demand suppression during the first year of operations and numerous price hikes for the rest of the three till date. As the operations did not consider nor took power utility dynamics into view, the required goals/results could never be achieved. However, in order to pacify the government—-specially the then CE and the now President too, the new management seems to have fed in false data and results, that in fact were never achieved.

On the other hand, line losses of 26 per cent during FY 97-98 increased to 27.5 per cent for the FY 98-99 and the Rs43 billion receivables rocketed to as much as Rs53 billion for this very period. As all this happened while nearly 40,000 troops stood deployed, the need to manufacture false results further more deepened. The managements deceit was thoroughly helped by the totally tamed and domesticated ministry of water and power and the direct and undiluted access of the Chairman, Wapda/KESC to the CE. It was in this scenario that the Chief Executive would speak about the non-existent achievements— in the process doling out undeserved accolades for the management of these utilities. On the other hand, Wapda lost Rs16.5 billion during 2000-01 and an unprecedented Rs40.8 billion during the last financial year.

The KESC, not to be left behind, lost Rs16 billion during 2000-01 and a colossal Rs17 billion during the fY 2001-02. Strangely, these losses—- though borne by the GOP resulting in budgetary deficits and whinings from the ADB/IMF/WB—did not have any effect and the loss-making management continues to rule the roost. It is feared that, tariff hikes not withstanding, the combined losses for both Wapda and the KESC for the FY 2002-03 would be upwards of Rs50 billion (nearly $1 billion) and the rot would surely be accomplished by more tariff increases. In view of these facts the proclamation that losses of the public sector have reduced during the last three years is inherently incorrect- latest concern of the WB that the current FY’s deficit would adversely pressurize the overall budgetary deficit of the country bears testimony to the above statement.

Further insight into the horrendous situation reveals that mega projects like GBHPP- where one day delay translates into a loss of $1 million to the nation, are now delayed by as much as two and a half years. Delay in decision making specially in up- gradation of Wapda’s TOG Network, award of imperative contracts, BMR of Wapda’s own thermal power plant and such like activities has caused the nation another Rs100 billion loss during the last three years. In addition, the premature de-linking of Distribution Companies (DISCO’s) from Wapda’s HQs before the Brigs Chief Executives could attain the required proficiency needed to manage the operations there has resulted in no positive change and all earlier practices continue.

As such the effort to change the management undertaken during October 98, have come to a naught. As the Brig Chief Executives, are not under any check and nor any technical scrutiny takes place, have adopted imperial lifestyles. Had the MDs/GMs of WAPDA’s cadre been allowed to keep an eye on the DISCOs, the results due to healthy amalgam of the Army’s discipline and WAPDA cadre’s technical expertise could have been different. Here even a casual look at the DISCO HQ’s would reveal the imperial styles and the huge fleets of vehicles parked there. Wapda’s sub-division- as the show window, however, remains the same shoddy place it was. Actually the unbridled and unchecked operations have resulted in more inefficiency and nothing else. The breakdown in employee morale is another story.

Wapda’s present aboutturn and meek resolve to write off as much as 50 per cent of over-due receivables, is in itself, an admission of defeat to improve upon the results. Similar is the situation in the ambit of customer care. The already over burdened customers are being subjected to levy of detection bills, poor level of supply and frequent breakdowns. According to WAPDA’s own reports, the disruptions/breakdowns during 2001-02 were more by 25 per cent in comparison to the same for 1998-99. Keeping these hard facts in view, the purported work propagated to be done during the last three years is not visible.

The question which haunts everyone remains as to why such an inefficient and ineffective, to the least, management is allowed to continue. Professionals—specially having requisite experience in the power sector bemoan the fast relegation of this sector and the negative effect it has on the country. We, however, can only come up with one answer which would be the fact that the present management, being in direct access to the CE was able to have its way through and nothing more. It is also noted that the Chairman WAPDA keeps on blaming the GOP, the PSO and the IPPs for Wapda’s losses and the ever increasing electricity rates.

As to why the various ministries also kept mute is another facet that needs study. Similar is the case with NEPRA, which with each increase in tariff rate allowed would require definite targets to be met but would accept more petitions without compliance of the earlier prerequisites from WAPDA and the KESC. Although the correct awareness would come from the ministries and NEPRA itself, one can only surmise that these institutions were not allowed to place any check on Wapda or the KESC ostensibly because the Army traditionally wishes to operate without any check.

Probably, this became the reason for NEPRA’s Chairman to resign some months ago. This situation may be appropriate and surely a requirement in case of military operations but has contributed towards huge losses here. It is hoped~that the newly elected PM would require the relevant ministries to ensure that the utilities start functioning once again and that too in a responsive manner. Ways and means too would heave to be adopted to ensure against figure/data fudging etc. More over, as once decided by the President too, the finance ministry also needs to be re-activated to look after financial interests of the country. Similarly, the Planing Commission— once the author of five-year plans would need to assert itself instead of corporations like Wapda conjuring their own blind visions.

It is pertinent to state that, of late, the World Bank and even the IMF have agreed that anymore raise in power tariff would be counter-productive, but they are in a quandary on the basis of the continued loss-making operations of both, Wapda and the KESC for the last four years, as to how these utilities would not burden the country’s budget anymore. Actually the present management most bleak and damning contribution to the whole scenario to the making up of a false opinion by the WB, IMF and even the GOP - and to some extent the general public that these utilities cannot become profitable in wake of the levy of GST, the huge petroleum development levy leading to expensive fuel oil and PPA’s binding purchase of 60 per cent produce prom the IPPs. As the utilities operated without any check, there has been no one to question the most inefficient and corrupt operations in place with a negative price tag and drag of up to Rs50-75 billion per year.

Coming back to the last presidential speech, once again we see that the resolution of the IPP crisis has been considered as a feather in Wapda’s cap. It too is a fact that the ministry of water and power and the PPIB had a different approach altogether in the case and experts still consider the eventual resolution as a near sellout. It is also a fact that it was only the mindless prolongation of the issue that eventually lead to the finance minister’s intervention and resolution of Hubco’s case with very little benefit to the nation. Strangely, not even the illegal amendments I and II to the original PPA could be washed away.The PPIB and the ministry have their opinions in this regards which would one day or the other come to light.

Whatever be, it remains a fact that lack of cogent checks leads to inefficiency and corruption and in case it is not so then at the least it does leads to skewed working. WAPDA and DISC remain good examples of this dictum/philosophy.The inordinate delay in completion of projects of natural importance during the last four years—prime example being the Ghazi Brotha Hydro Power Project (GBHPP) also provide an insight into the things. Actually penny wise and pound foolish seemed to be the catchword of the present management.

Actually they have been simply unable to comprehend the magnitude of things. The utilities were beyond their grasp and with no check at hand, the results couldn’t have been anything else.

If the GOP had wanted Wapda and the KESC to improve, it would have been much better to adopt other methods—and in case army management was considered a must, it too could have been taken up in a much better manner. Unfortunately, the last four years have been a wastage—a missed opportunity and again a blot on the fair name of the army.

The answer now lies in Wapda and the KESC being managed professionally and honestly— with a strong political backing. However, the new government would have to move fast; specially when it wishes to effect reduction in electricity rates— an achievable goal provided the required ways and means are adopted at once.

The writer is a former Member (Power) Wapda