THE annual report of the power sector regulator makes for grim reading. Despite the voluble and celebratory rhetoric we hear from the government about the benefits that are about to flow from all the new projects being implemented in the sector, the regulator is warning that whatever progress we see is accompanied by equally regressive steps. “Governance of public-sector entities is a major cause of concern”, the report says, pointing out that the absence of any substantial improvement could “defeat the overall objectives of the government to lower the costs of energy mix and to provide least expensive electricity to the common man”. This has been a common refrain of power sector experts for many years now. The problems that afflict the sector go beyond raw megawatts and are not going to be fixed by commissioning a few projects and adding more capacity to the system. A wider set of reforms is required, particularly in the area of pricing, but also to bring greater efficiency to the overall system. This can only be done by strengthening the regulator and reducing the role of government dictation in the functioning of the overall system.

Such progress requires well-thought-out reforms in the power sector. A step in that direction was taken during the second PML-N government in the late 1990s when Nepra was created and enabling legislation for privatisation was passed and the unbundling of Wapda began. But then, it all stopped, and the focus shifted largely to a projects-based approach. Today, plans are being considered to dismantle the regulator, and centralise further control in the hands of the government, where the failure to manage the country’s growing power requirements originated. “Any backtracking from the reform process would be disastrous” warns the report in its most strident sentence, pointing out that 75pc of the power sector is still controlled by the water and power ministry, and further centralisation of powers within it would mean “reinforcing the failure”. The authors of the report are correct to point out that the steps being contemplated are “disastrous” and that they take the entire enterprise in the wrong direction. The power sector needs a strong regulator to safeguard the public interest against the rent-seeking private interests that are circling it, as well as a revenue-thirsty government. Around the world such reforms have succeeded in bringing down the price of electricity. Pakistan cannot be an exception.

Published in Dawn, June 29th, 2017