TALK is cheap. Can electricity also be? The government has recently announced that Pakistan will benefit from the lowest electricity tariff in this geographical neighbourhood within the next few months.
Several measures have been and are being taken towards this end, the most prominent among which is the cancellation and renegotiation of old contracts with IPPs, appointments of fresh, ‘non-political’ boards to run power companies, and anti-theft campaigns to nab miscreants and defaulters.
The spiralling circular debt seems to have been arrested and even modestly reversed, and losses posted by distribution companies have shrunk in the first five months of the ongoing fiscal year. These are, undoubtedly, good signs. However, fixing the country’s messy power woes sustainably requires an iron will and an ability to walk the tightrope while making tough decisions.
The government has been under pressure from certain quarters to push for an extension to the deadline to cut gas supply to captive power plants by the end of January, agreed to with the IMF under the conditions of its bailout programme for Pakistan. The government had previously consented to the measure but then realised it would create new problems for connected stakeholders.
Be that as it may, Islamabad’s inability to show consistency and adhere to agreed terms creates doubts regarding its capacity for long-term reforms. Every time it changes its stance, the government signals that, firstly, it is not confident about its policies, and, secondly, its decisions are not engineered to deliver long-term solutions. This lack of consistency is also what encourages lobbyists and special interest groups to continue attempting to derail reforms that affect their interests.
The promise of the cheapest electricity tariff in the region is a welcome one, especially for Pakistan’s inflation-weary masses. However, if it is to be achieved, the government will need to stay the course, make bitter choices, and take responsibility for its decisions.
Published in Dawn, January 18th, 2025
