THE recent flare-up in protests against overbilling in the power sector is yet another reminder that this sector needs greater transparency. In a nutshell, the government tried to reduce the amount being paid to subsidise the cost of electricity to end-consumers. In the last two fiscal years, the amount paid out in the form of power subsidies has been larger than the budgeted amount by 100pc. On top of this, the circular debt had risen to almost Rs500bn by the time the current government took office, further underscoring the scale of the losses being accumulated in the power sector.

The government bit the bullet in its early days by paying out the full amount under the circular debt in one go. Then it made a promise to reform the sector to ensure that it is able to pay its own bills from its recoveries. In the latest budget, it allocated Rs150bn for power subsidies, and made a solemn commitment that this amount would not be allowed to be exceeded, as it had been in the previous two fiscal years.

To meet this commitment, pressure was put on the Ministry of Water and Power to increase its recoveries. An increase in the power tariff was allowed up to 33pc in October, and the slabs into which various categories of consumers are divided were reformed. The power bureaucracy responded to the pressure by resorting to an old tactic — overbilling some categories of consumers in the hope of meeting the recovery targets that had been set for them. The overbilling on a presumptive basis, combined with the effects of the tariff hike and slab reform produced bills that were far in excess of what middle-class consumers were used to paying, thus creating the furore we see.

Now demands are being made for a comprehensive audit of the entire billing exercise to determine the scope and extent of this practice. Such an audit will accomplish little, since at best it will provide a one-time snapshot of the situation. Instead, what is needed is a disclosure template that mandates the power bureaucracy to regularly release a set of operational and financial data according to a preset cycle, much like the State Bank of Pakistan releases regular snapshots of various macroeconomic indicators, or the water bureaucracy releases information on inflows, outflows and water levels in the various hydro projects under its command.

Donor assistance can be sought to help develop this template, ownership of which should rest outside the power bureaucracy, perhaps with the regulator. Only when a series of data released under such a mechanism begins to accumulate, will a more accurate picture emerge of the kinds of abuses of discretionary powers that are creating the inefficiencies for which the country, and ultimately the end-consumer, has to pay so dearly.

Published in Dawn, September 27th , 2014