Power sector reforms in pakistan
Nearly two decades ago, the government came to the late realisation that a power sector owned and operated by the state was inefficient and resulted in under-investment in power generation, transmission and distribution systems, leading to ‘loadshedding’. - APP Photo
Two and a half years since ascending to power, the political government in Islamabad still appears to have little idea about how to address the crisis in the power sector. True, many of the reasons for the crisis are structural and pre-date the present government, but the fact remains this administration inherited a mess that through inaction it has helped turn into an even bigger mess. A report in this paper yesterday suggests that at long last, the next step in the privatisation and deregulation of the power sector may finally be undertaken — though even at this point it is not clear which reforms will be pushed through and which will remain tied up in bureaucratic red tape.
Some history here is necessary. Nearly two decades ago, the government came to the late realisation that a power sector owned and operated by the state was inefficient and resulted in under-investment in power generation, transmission and distribution systems, leading to ‘loadshedding’. It took several more years before the creation of the Pakistan Electric Power Company (Pepco), which was tasked with splitting the thermal-power side of the vertically integrated behemoth Wapda into a dozen entities that were to be made ready for self-sufficiency and eventual privatisation.
Fast forward a dozen years, and now there is talk of disbanding Pepco itself — because of its failure to implement the tasks it was charged with and because it has, according to some officials, itself become a roadblock to reform and restructuring. Pepco officials hotly deny such charges, pointing out, with some degree of truth it must be said, that officials of the water and power ministry have frequently interfered in Pepco’s operations and have not allowed it a free hand, in all likelihood because were Pepco to succeed, the influence and power of the ministry, and Wapda too, would diminish. Bureaucratic and political turf wars are of course not unique to Pakistan but the difference here is that the power sector is on the verge of collapse. Plans to restructure the sector already exist. What’s needed is the political will to do so.
Fast forward a dozen years, and now there is talk of disbanding Pepco itself — because of its failure to implement the tasks it was charged with and because it has, according to some officials, itself become a roadblock to reform and restructuring. Pepco officials hotly deny such charges, pointing out, with some degree of truth it must be said, that officials of the water and power ministry have frequently interfered in Pepco’s operations and have not allowed it a free hand, in all likelihood because were Pepco to succeed, the influence and power of the ministry, and Wapda too, would diminish. Bureaucratic and political turf wars are of course not unique to Pakistan but the difference here is that the power sector is on the verge of collapse. Plans to restructure the sector already exist. What’s needed is the political will to do so.
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