The most recent public hearings at the National Tariff Commission, on the petition of a particular local manufacturer of soda ash for restoration of 20 per cent import duties, has brought the present prohibitive cost of utilities to the fore-front once again.

The commission chairman's assertion on the occasion that survival of Pakistani industry did not lie in tariff protection- again a direct contravention to the WTO, but depended on reduced cost of production which in turn, amongst many others variables mainly comprised of the present exorbitant cost of utilities.

Simply speaking, viability of the Pakistani industry clearly remains at the mercy of the cost of electricity, gas, water, telephone, etc. and impliedly on the profitability of Wapda, KESC, SSGC, SNGPL, the various WASAs and the PTCL.

The cost of cellular telephony too now makes up a major chunk of expenditure being faced by the entrepreneur. PTCL's new wireless loop line (WLL) system being setup at a staggering price tag of $500 million is another noose in the offing- propagated specially for the rural customers.

Although PTCL remains profitable, but experts put a Rs 15 to 20 billion price tag on its annual leakage in revenue- imagine thus the level of profits were these leak ages plugged and the effect the same would have on the cost of telephony in Pakistan.

Similar is the case of the seemingly profitable gas companies, where over 16 per cent of the line losses have been recorded. This figure is besides the quantum of losses on account of load-shedding, low-pressure and the low-energy level due to improper filtration, etc.

On the other hand, we see that the Utilities (many public sector enterprizes) are haemorrhaging badly and their combined losses as calculated and also interpolated thereafter by the IMF are going to reach the astronomical figure of Rs 550 billion by 2007. The IMF year of calculation starts from FY 1998-99, i.e. from Musharaf era, when a total of Rs 192.828 billion of losses had already occurred.

According to these calculations the last fiscal saw these losses balloon to a figure of Rs 400 billion or 10 per cent of the GDP or that the country saw an increase of more than Rs 200 billion under this head during the last four years. According to experts, this figure gives us the direct losses, while losses on account of governmental guarantees would be again in the vicinity of another Rs 250 billion or so.

The explicit contingent liabilities of the GOP, in addition to the losses of the PSEs, alone for the FY 2002-03 reached a whopping Rs 93 billion. On the other hand, the IMF recognizes that it's continued forceful reform agenda is being pursued vigorously, but maintains that there is no sufficient or wide spread appreciation by the public and the Pakistani policy makers of the extent to which the huge PSEs losses have contributed directly or indirectly to the building of public debt and the contingent liabilities. This is a most damning of the accusations and remains a thorn in the national psyche.

Was the GOP not alive to the situation. Did it just let the things be. We see that the losses and the mismanagement of the PSEs were indeed taken into consideration and an effort did ensue to correct the situation. The most important of the effort was the Nawaz government's handing over of Wapda and the KESC to the Army and the continued claims by the respective management thereafter of great success.

The fact that nothing of the sort happened with the losses multiplying at an exponential rate also needs to be taken note of. Mercifully PTCL, SNGPL, SSGC and the WASA were spared a quick solution to the problem- but these too do not stop contributing to the yearly losses.

Strangely, water losses in the cities are not even being quantified and remain at a much lower rung on the national priority of problems. The most necessary water meters and the easily checkable ferrules, etc. are nowhere to be seen.

We need to understand the dynamics of Utility Operations and practice, before we offer an answer to the problem and also hopefully a solution. We also need to understand as to whether managing Utilities is different from the management of other governmental organizations.

We would also try to comprehend the difference between any commercial organization/ entity and the Utility- be it in public control or in private hands. It also needs to be understood as to whether a totally different mindset is needed to work for a Utility or any type of thought process can do.

What are the Utilities? What role do these organizations play in our daily life and what exactly is expected by the people? Answers to these questions would further help us in understanding the management requirements of these PSEs.

Simply speaking, Utilities are our support systems and without these we cannot go about our daily life. These ubiquitous and usually unseen facilities have to be available at hand all the times and without any let or hindrance. We should be privy to these as a matter of right.

It is because of this very fact that absence or severance of even one of these be it water, gas, electricity or telephone results in chaos and a near crisis.

Out of this requirement of being available at all times leads us to the pre-requisite that a Utility manager- be that of the lowest rung or at the top level, should be able to give a sustained response day in and out and then be able to also improvise to cater for different situations.

What would these different situations be? Can any intelligent person comprehend and then be ready to face these. No. These situations are different at all times and can only be understood while- actually facing them. This pertains to the availability part of the Utilities.

As all situations are peculiar to the different Utilities, only a Utility man facing the various happenings can understand and also appreciate the same. It is only such a person who can thereafter improve upon the situation- all in the interest of the Utility customer.

Strangely, all situations are Utility specific and a water-man would not be able to stand for an electricity man. This leads us to conclude that the Utility manager has to be from the cadre and not from without. Once this basic point is agreed to, we can now move over to the other pre-requisites.

What kind of a Utility manager can be elevated to reach the upper echelons of that particular setup. This would be our next goal. He has to have relevant education, experience and the necessary insight into the evolution of the expertise.

If he is an electricity man, he should understand the evolution of power system in our country. Simultaneously, he should understand what is happening outside. He should also be able to comprehend the reasons for the difference in our setups and those abroad. In short he should understand the shortcomings that contribute to slowdown in local growth.

Besides technical understanding of the issues, he should have a deep insight into HRM & HRD issues. As the HR at his disposal would be mainly Utility specific, he should be able to improve upon the same.

Additionally, it would be appropriate if he is able to arrange the flow of relevant knowledge to his wards. Once all this is there and available, the Utility manager should be able to have an understanding of project management, procurement and contracting, negotiating and settling disputes.

What went wrong. Why are nearly all the utilities sinking. A little insight reveals that basically there have been ten problems. The first one is that the utilities were originally based on foreign models and these unfortunately were never home-grown.

These, thereafter, reached their epitomes in the 60s which was a time of fast-track development. By the end of the sixties, the basic structures of the Utilities reached their breaking point and probably that was the time when mid-course corrections and massive injection of funds were needed to cater for the growing needs of the public- added up immensely because of the then unprecedented shift of the population to the urban from the rural areas.

All this could have been taken care of, if new townships had emerged. As nearly nothing was ever done, the existing facilities had to bear the brunt and without the needed level of financial injection, the utilities grew haphazardly and then started bursting at the seams.

Because of this tightening-up of the financial spigot, technical imperatives got relegated and with it was paved the way for non-professional managements. Additionally, as administrative expenses could not be put on hold- rather had to increase, the utilities gained a negative and spend-thrift image which resulted in an even greater financial cut-off from the national ex-chequer.

This logically resulted in petrification of the utilities, a drought like condition and the lack of availability of state-of-art or latest techniques. It is because of this that visit to any of the utilities reveals archaic work conditions and a stultified atmosphere.

As this drought was the logical result of a non-professional approach, the ensuing losses were not accepted as any truth- leading to a stalemate which in turn stopped anyone from taking corrective action.

Additionally, there has been an interference from within the utilities and also from outside. Unruly unions and other pressure groups were enough to destroy the morale of the lower tiers, while political thrust took care of the top.

This all was then padded up by the posting of favourites to head the utilities, with merit giving way to nepotism and it has been down hill since then. An offshoot of posting of favourites has been the relegation of technical requirements to whims and non-technical solutions.

Thus with more growth in population, steady decline in public/governmental funding for the Utilities, stagnant way of doing things and implementation of non-technical solutions against the appropriate ones, the Utilities have now reached the nadir of their existence.

Along with these negatives has been the latest slogan of running the Utilities like commercial organizations which could earn more than what they would expend for their day to day running.

All this looked good on paper but could not translate profitably on the balance sheets. How could a totally depleted structure support the requirements of the day. By and by, the whole edifice imploded leading to the great losses listed in the preamble to this study.

Besides the above, the last five years saw a different kind of interference. The establishment decided to correct the things and that too in their way. This was through the extra departmental monitoring teams and the posting of un-connected men at the top; this also included setting up intelligence networks.

All this did lead to catching many a small time crook, but it also led to the complete demolishing of whatever was left of the PSEs. Wapda remains the best of the example where the loss level of 1998-99 quadrupled to a total of Rs 200 billion or so by the end of Fy 2002-03.

The very fact that private receivables of Rs 27 billion (at the end of October 2003) have now come down to as low as Rs 24 billion in just three months is example testimony to management problems which somewhat corrected after Mr. Zulifiqar Ali Khan's exit in early November 2003.

That the line losses too have come down during the last quarter or so is another indicator of the things and surely enough to understand that management remains the main problem.

Additionally, we also see human resource flexing its muscles in Wapda and once again gaining in initiative. The around-the-corner proposed reduction in electricity tariff is another feather in the present management's cap.

What thus is the solution to these sinking utilities, the exorbitant tariffs and the anti-customer styles of doing things. How can we ever ensure the utilities to be more responsive to the needs of the public.

Can the back-breaking losses ever stem? According to experts and what little inference we ferret out of the facts listed in the preceding paras, the first of the steps would be immediate posting of relevant professionals to head the utilities, the second would be to shake up the higher managements of these organizations whereby the professional could be correctly placed, priority setting up of HRM and HRD divisions- again to be headed by experts, the re-charting of career charts of the employees, setting up of related R&D division and a strong up-gradation and re-structuring plan.

As primarily the problem of the utilities, in addition to the various extraneous issues, remain it's depleted HR hence quick investments would have to be made in this area.

This can be done through complete re-vamping of the HR requirements by re-orienting the goals set forth for each utility and by formulating crash programmes to attain the needed level of expertise.

A high level of liaison would also have to be built with the engineering institutions of the country, whereby existing syllabi and curriculums would be improved, made more in line with the requirements and the now terminated programme of internships started anew.

This again is important because the non-technical and out-of-cadre managements have slowly weaned the utilities away from the educational institutions which supply basic technical resource.

All this is very important because improvement in the current level of expertise would not only benefit the persons concerned, but the utility too. These externalities have grown in modern times and now are directly linked to higher profits.

And such improvements are also needed to fully realize the potential of the technical resource and also give it a level of confidence, whereby it is able to influence change in processes and policies that affect the viability and dynamism of their respective organizations. The consequences of ignoring this important facet are also clear and surely not pretty.