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Formation of new power ministry

Updated August 06, 2017

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THE new prime minister has wasted no time in merging two vital ministries into a single Ministry of Energy, something that the PML-N had promised it would do in its election manifesto of 2013.

The water and power ministry has been bifurcated, and its power wing is now to be merged with the petroleum ministry. The idea is an old one, and builds on an earlier generation of reforms under which the mammoth Wapda was bifurcated into separate water and power wings almost a decade ago.

Since at least 2010, if not earlier, while the PPP government struggled with the power crisis, the proposal would be raised anew, always to be shelved. Even the PML-N promised to implement the idea, but strangely waited till the last year of its rule to actually implement it.

Technically, the idea is sound and all those who have advocated it or examined it have concluded that it can help streamline the functioning of the power sector by bringing fuel supply and other operational issues under unified supervision. But the timing and the speed at which the proposal has now been implemented suggest that priorities other than the smooth functioning of the power sector may be at play.

A clue is provided in the prime minister’s own words, where he said that the completion of ongoing projects was a crucial priority for him. With both ministries whose approvals are key to the speedy implementation of ongoing projects in the power sector now working directly under the new prime minister, as well as the latter’s retention of the Planning Commission portfolio — meaning his personal oversight of all matters related to CPEC — it appears that the commencement of commercial operations in all power projects will now be the government’s top priority.

The linchpin here is finance.

Without the required cash flows, the power sector can chug along for a brief period before sputtering to a halt. Streamlining the operations is fine, but the dividends that this can yield are ultimately constrained by the availability of financial resources.

Besides, aiming for the completion of the projects as a political strategy carries substantial technical risks as well as the potential for locking the sector into a high-cost growth path. The repeated technical outages being experienced at the new power plants recently inaugurated or started for test runs in southern Punjab make this clear.

The case of the Nandipur power plant stands as a supreme testimony to the waste and inefficiency that haste of this sort can lead to in power-sector projects.

The new prime minister has a tougher job than he might realise in ensuring that the projects he has to now hustle down the timeline to completion remain financially and technically viable at the end of the process. In addition, ensuring availability of fuel supply without depleting reserves will add to his challenges.

Published in Dawn, August 6th, 2017