THE government has decided to terminate a long-term programme to instal smart meters that can automate the process of meter readings at the last minute, but the more interesting part of the story actually lies in the reasons being given for the decision. Energy Minister Awais Leghari tells us that the entire business of billing and meter readings is so riddled with rackets that no distribution company will be able to properly oversee the installation and smooth operation of the new meters that were to be installed on 30pc of the connections in two distribution companies in the first phase of a project financed through an ADB loan. This is a common problem, and the minister is right in feeling that the rackets will be too much of an obstacle for the new technology to do its work, leaving the distribution companies with nothing but loans to repay.

But we are all entitled to ask why this thought occurred to the government at the last minute, when the loan that had been under negotiation since 2012 was about to kick off. And more importantly, if the rackets are indeed as deep and wide as the minister says, and he is probably right in this assessment, what exactly is the game plan to improve the billing and recovery machinery of the distribution companies? Adding more generation capacity to this system only makes it more urgent to rectify billing and recoveries, because otherwise the increased number of units sent out in the future would add to the circular debt, potentially leading to forced shutdowns. The minister says privatisation is the better answer, and the government would prefer to let the future investor handle the problem. Now if only we had a clear pathway to that goal, we might have reason to believe that the structural problems underlying the power sector are getting the attention they deserve.

Published in Dawn, February 16th, 2018