IN a string of similar court actions, the Islamabad High Court has now told the government that shifting the regulators under their respective line ministries is an action that requires wider approvals and cannot be undertaken simply through an executive notification. The order is not going to have any impact since the shifting of the regulators had not yet begun due to two similar orders issued by the Peshawar and Lahore high courts earlier in February. So with the latest order, the notification to move five key regulators to their respective line ministries now stands struck down thrice. Few notifications have suffered such comprehensive defeat in the courts. The government should take note of the fact that unilateral actions of this sort that can have wide ranging impact if implemented, ought to be undertaken with consensus and wider public awareness about their intentions and the objectives that they are supposed to serve. One is reminded of the hastily issued notification that sought to change PIA’s corporate structure, which also sparked a destructive series of consequences leading ultimately to a humiliating withdrawal of the order.

With the power sector in the midst of a massive expansion and investment spurt, the importance of transparency in key decisions becomes even more important. There are far too many decisions of a technical nature strongly impacting the rights of the consumer that have to be taken during the course of this process. Matters that may sound mundane, such as what costs to allow as pass-through items and which ones must be borne by the project sponsor, can end up shifting the burden of inefficiency and misgovernance of the power sector onto the consumer. The oil and gas sector has similarly seen a big push to pass the cost of ‘unaccounted for gas’ onto consumers. The temptation to slowly and steadily transform the power and natural gas system into a surrogate revenue apparatus, through a series of incremental steps whose financial impact can add up to hundreds of billions of rupees annually, must be resisted at every forum.

The power sector needs to undergo far-reaching reform in the next few years to be able to absorb the volume of investment that is coming into it. Most importantly, this reform must touch on pricing, and allow a greater role for market forces to set power prices rather than relying on the outmoded methodology of upfront and cost-plus pricing being followed currently. In order to undertake this reform, the government needs to ensure that the wider roadmap being followed is publicly communicated. This will prevent suspicions from engulfing every move. But if these reforms are pursued in the dark, with a small number of people in the know, then we can expect to see more notifications suffer the same fate as this one. 

Published in Dawn, March 29th, 2017