Change in Balochistan

THE change of governors in Balochistan has come about in the usual hush-hush manner. No formal announcement about General Abdul Quadir’s successor had been made till Saturday morning, but the new man, former federal minister for labour, Mr Owais Ghani, is reported to have confirmed his appointment. It is not known why Gen Quadir was shown the door. There was speculation that the MMA, which is in coalition with the PML-Q in the province, wanted the change, but the alliance’s deputy parliamentary leader in the National Assembly has denied this. Indeed, Hafiz Hussain Ahmad has said the MMA is actually more interested in the removal of the governor of the Frontier province. The MMA leader has also criticized Mr Ghani’s appointment, describing him as a governor “imported” into Balochistan, although the new incumbent’s family is believed to have its roots in the province.

Interestingly, the prime minister himself belongs to Balochistan, but he has been singularly quiet about the gubernatorial change in his province, and it is not at all clear whether he was consulted about it and whether it had his blessings. There is just one indication that he may not have been totally out of the loop. This a statement he had made shortly after the foul and murderous July attack on a Quetta imambargah, when he had said administrative changes in the province were inevitable. Appointment of governors has been a presidential prerogative, but appointments are supposed to be made in consultation with the elected federal and provincial governments. This is among the contentious points which the opposition is seeking to tackle during its halting dialogue with the government on constitutional issues. The lack of consultation and transparency in such matters is just one of the many pernicious legacies of our years of dictatorial and authoritarian rule, and the present military-led government shows no sign of changing the script.

The important thing now is to see how the Balochistan government will interact with the new governor. Cooperation between the two is vital in a province that has recently seen an eruption of sectarian violence and tribal feuding. The governor, as a representative of the federation, is meant to serve as a coordinator between the centre and the provincial authorities. In the wake of the Quetta incident, there were many innuendoes that centrally-controlled intelligence agencies often acted on their own, and the province’s home minister had resigned on the grounds that he had been rendered powerless. The intelligence agencies owe a great deal of their autonomous power in Balochistan to the Afghan factor, but this should not mean bypassing the provincial government. Economically, too, the province would need to work closely with the central government in view particularly of the Gwadar and Saindak projects. Balochistan remains the country’s least developed province with an entrenched sardari system that often hampers economic and social progress. Balochistan’s late (1970) start as a full-fledged province means that the leap forward in terms of both social and economic development has to be that much bolder and more energetic. The centre and its nominee in the province have to help in this, not by usurping the powers of the provincial government or meddling in provincial affairs or by seeking to play off coalition partners against each other, but by providing the necessary funds and expertise.

What ails the KESC

THE new package announced by the KESC to make it somewhat easier for defaulters to clear their dues might help it recover the payment of some unpaid bills. These are known to run into millions. But the fact is that the financial losses which the KESC is incurring go much beyond these unpaid bills, which are only one manifestation of a wider problem of mismanagement and corruption. Other more serious issues are power theft, line losses, poor maintenance and inadequate supply.

Regrettably, it is the KESC’s failure to address these problems that has made frequent and prolonged power breakdowns and loadshedding a feature of life in Karachi. Its higher bosses insist that there is no corruption in the organization and they attribute their woes to the shortfall in power production. According to them, the city’s need is for 1900 MW when the KESC can supply only 1400 MW. But the fact is that the problem is deeper. Line losses are said to be nearly 40 per cent — the internationally accepted standard is 7-10 per cent — which if taken in hand would be enough to meet the power needs of the city. It is more important that the KESC undertake a massive programme of maintenance, renovation and servicing. Old conductors, dilapidated cables and wires should be replaced, and the transmission system spruced up.

Where will the funds come from? Some financial discipline and a crackdown on corruption and inefficiency within the agency will generate enough money to pay for maintenance work. In fact, at one time the KESC used to generate profits. The rates are revised upwards periodically even though the cost of production has gone down. According to estimates, the substitution of high-cost furnace oil by low-cost gas for power generators has saved the KESC billions. Removing kundas, which the utility claims to have done, should also have generated a saving. All this money should be channelled into repair and maintenance which by itself will have a positive impact on the power supply system.

Ship-breaking industry

THE frequent changes in the rate of taxes levied by the Central Board of Revenue on the ship-breaking industry has contributed to uncertainty and losses. In turn these have translated into near ruin for a once-thriving industry that provided cheap raw material to the steel industry, jobs to thousands, and millions of rupees to the government in revenue. According to statistics provided by the Pakistan Ship-Breakers’ Association, there was a 70 per cent drop in the tonnage of ships imported for ship-breaking in 2002-03 compared to the same period the previous year. In 2002-03, over 230,000 tons of old ships were brought into the country compared to over 770,000 tons in the preceding year.

The reason given for the steep drop in the number of ships is the frequent changes in the rate of sales tax at the import stage. Another issue the ship-breakers want addressed is the volatility in international prices of ship scrap, which, they say, must be taken into account by the CBR while fixing the rate of sales tax. The iron scrap taken from these used ships has been an important input for the steel industry for some decades now and helps keep domestic steel prices stable. By making the ship-breaking industry unviable, an added burden is placed on steel supply in the country. This could result in higher prices for steel products — an important component of the construction sector. It would make good economic sense for the government to keep the Gadani ship-breaking industry alive by addressing the issues raised by those who run it. The industry is located in an area where economic activity has been stagnant for several years now. It would be a shame if such an industry were allowed to wither away owing to government indifference and the CBR’s wrong taxation policies.