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Caretaker energy setup

M Asif

As the country braces for an interim government to oversee the forthcoming elections, it’s crucial to have a robust and broad-mandated caretaker energy setup. Pakistani obviously has a number of serious issues on hand: a depleted economy, energy crisis, political and institutional instability, poor law and order situation and war on terror. When it comes to the wellbeing of the masses, our current energy crisis is arguably the most important issue.

The energy crisis is undermining the whole socio-economic fabric of the society. Its consequent impact on daily life like disfigured daily routines and sleepless nights is deteriorating people’s physical and mental health.

Issues like reduced income, increasing inflation, erratic changes in social values and deteriorating law and order situation are also closely linked to the energy crisis. The relentless continuation and expansion of the energy crisis suggests that those at the helm of affairs have taken it as a pretty normal phenomenon – an utterly inhumane approach.

Nowhere else in the world – not even in other developing countries – are people facing such disgraceful humiliation and deterioration in the quality of their lives.

So why is a meaningful caretaker energy setup imperative? First and most importantly, it will help in avoiding further deterioration of the energy sector over the next few months until the newly elected government takes office.

The crisis is deepening with each passing day and there is no strategy or roadmap in place to control it. In a business-as-usual scenario, the issues of circular debt, electricity and gas shortfalls, electricity and gas thefts, and discontinuity in supplies of transportation fuels are all exacerbating as the clock ticks.

At least this increase in problems can be stopped by addressing some fundamental governance issues like system leaks and malpractices. Estimates, for example, suggest that the collective value of electricity and gas stolen every day is nearly half a billion rupees. The recovery of default bills is another issue, while the trend of defaulting is on a rise.

Public sector power companies are estimated to have over Rs200 billion in terms of receivable bills on their balance sheets. In this, the culprits include federal and provincial government departments and other national institutions.

Utility companies are also being heavily undermined by large scale unnecessary and politically motivated appointments at all levels – from the clerical to the executive. The performance and profitability of these energy sector organisations can be significantly enhanced by pragmatic downsizing.

A significant cushion, therefore, can be developed by tackling these issues. To do this, however, the caretaker set up must show commitment as well as muscles.

The proposed caretaker setup is also important in order to establish where Pakistan stands in terms of its energy crisis. It is vital to determine the real nature and intensity of problems and their realistic and optimum solutions.

Throughout its tenure the present government has complained about the problems of circular debt and load-shedding left over by the previous regime. True, the present lot inherited these issues, but they have only further aggravated them.

As per reported figures, in the present government’s tenure the maximum shortfall on a summer day has jumped from over 4000MW to over 8000MW, circular debt has increased from around Rs200 billion to over Rs500 billion and electricity tariff has doubled.

The gas crisis has cropped up to become at least as severe as the electricity crisis, and transportation fuel has not only become almost 50 percent more expensive but also scarce.

Despite the above quoted figures, there is a great deal of ambiguity about the precise nature and intensity of issues. Utilisation of the installed power generation capacity, for example, is an issue of great ambiguity.

The present government, probably assuming the installed capacity to be quite insufficient, orchestrated the notorious rental power program. On the other hand, there are views that the installed capacity was not as insufficient as depicted by Raja Pervaiz Ashraf and others and that the intensity of load shedding was tactically manipulated to justify the rental power plants. The issue of circular debt needs to be carefully investigated, not only in terms of its origin and fallout but also in terms of transparency.

There have also been reservations about the transparency of large scale (billions of rupees) payments in terms of circular debt. When it comes to handling the energy crisis, the present office bearers have earned a reputation of great untrustworthiness.

Given their disgraceful performance over the last four and half years hardly any of their statistics and balance sheets can be trusted. Interestingly, former president Pervez Musharraf and his team still blame the current regime for the issue of circular debt, though independent experts believe otherwise.

It is, therefore, vital to have an independent, vigorous and reliable account of our energy problems so that the future government is clear about the issues on hand and does not take a shift blame strategy as the present lot has done.

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