THIS is with reference to the report ‘Experts see little hope for relief from heavy electricity bills’ (Aug 2), which quoted the experts as stressing that the government relied on revenue generated from the power sector, and pointing out that most independent power producers (IPPs) happened to have a nexus with ‘people in power’.

The ‘nexus’ part tells the real story because the government has other revenue-raising options as well. Moreover, for the consumers, while increased and lopsided taxation is an issue, the real, back-breaking burden is the payment against unutilised energy charges, commonly known as capacity charges.

On top of this, the condition requiring payment to the IPPs in dollars further exacerbates the problem in times of falling rupee value. Another problem, especially in the absence of effective audit of the IPPs, could be the near certainty of the overstatement of operating costs, as well as total investment in the project, thereby raising the return on investment (ROI) calculated as an agreed percentage on the project’s investment cost.

With the people behind the majority of IPPs being the ‘people in power’, it is not surprising that consumers are being warned not to seek renegotiation of the contracts as this would supposedly deter foreign investment, and may even entail heavy penalties owing to the sovereign guarantees that are in place.

With the national economy being what it is, the planned privatisation of state-owned enterprises, if conducted in the familiar style, may prove to be another money-spinner for the elite. After having their last fling, these fortune-hunters would fly off to their cosy nests abroad, leaving us to stew in our own juice, with nothing left even to sell, and burdened with mountains of debts comprising old, re-profiled and additional loans, with no capacity to pay, and no one willing to extend us a helping hand.

As for our leaders, even during times of such adversity, they are talking of laptop schemes, scooties and motorcycles for the young, and even want the Murree hill station beautified to make their summer abode more enjoyable. At the end of the spectrum are those who are struggling to keep at bay the crude idea of committing suicide because of seriously unbearable inflationary pressures.

Who will stop the rot? Who will rid the system plagued by parasites? Who will put the country on a path of recovery which could, in time, bring us some level of progress and prosperity? Anyone?

S.R.H. Hashmi
Karachi

Published in Dawn, August 15th, 2024