THE rowdy behaviour of participants at a hearing organised by power-sector regulator Nepra to seek public opinion on its proposal to end K-Electric’s monopoly over the distribution of electricity among the residents of Karachi took the focus off the real issue: how to resolve the city’s power woes in a sustainable manner. Instead, the verbal clash that ensued between two groups of political and civil society activists led the Nepra chief to first suspend the proceedings and then adjourn the hearing for a later date in Islamabad. Unfortunately, the choice of venue will not make it possible for Karachi residents who want to discuss the pros and cons of KE’s monopoly to contribute to the discussion. There is no doubt that emotions against the country’s only privatised distribution company are running high because of the days-long blackout in many parts of the city during the recent torrential rains. Public anger against the utility is totally understandable. Yet the issue needs a dispassionate and informed discussion so that a solution can be found.
Until recently, KE was praised by many for improving service delivery and ending blackouts in many areas. The company has invested significant sums to increase its own generation and improve its distribution network and reduce outages since privatisation. But it is also true that the dilapidated electricity distribution network still requires large investments to remedy the problems. KE claims its planned infrastructure investment will end blackouts in 95pc of the city by 2023, when its monopoly status expires. There is a caveat though in the shape of timely approvals of projects by the government and other agencies. Indeed, there’s no alternative to market competition when it comes to improving service delivery. But we are still far from developing a framework to have a competitive retail electricity market. Until that stage arrives, the regulator would do well to ensure that KE executes its infrastructure development investments on a fast-track basis, and that it is held accountable if it fails to make good on its commitments.
Published in Dawn, September 23rd, 2020