THAT the energy sector is in a deep mess and is pulling down the moribund national economy further is a reality. Decades of mismanagement of the power sector, rampant corruption, theft, bad policies and lack of investment in the distribution network have made electricity unaffordable for the vast majority and brought this crucial area of national life to the brink of collapse. Those who can afford it are rapidly moving away from the national grid to shield themselves from exorbitant power prices. Inefficient and energy-dependent businesses are groaning under bloated bills as the government dismantles its generous subsidy regime for industry under the IMF deal. Successive governments have promised to focus on and tackle the issues plaguing the energy sector — the power industry in particular — but none has ever made a concerted effort at wide-ranging reform.
Unhinged by the uproar created by the wealthy textile lobby against IPPs, the Shehbaz Sharif administration now appears to be moving in different directions to assuage the pain being felt by the urban middle-class consumers of electricity as well as industry. Besides forming a task force on power sector reforms and co-opting ‘technocrats’, officials are going on about multiple solutions to reduce the electricity prices. These include but are not limited to the privatisation of public energy companies, investments in the oil and gas exploration sector, retiring old, inefficient plants, reducing the return on equity for government-owned plants, replacing imported coal with Thar lignite, and incentives for inducing higher electricity demand, especially during the winter months. The solutions to the power problem are aplenty and in front of us. Some are long-term and others can be executed over several months for relatively early relief. If it is at all serious, the government would do well to engage IPP owners and experts rather than hiring charlatans who will only complicate the issues by making it difficult for investors, instead of earnestly trying to solve the problem.
Published in Dawn, August 7th, 2024
