Daily Times

Even though our government doesn’t seem to be unaware of the importance of the power sector’s health, it’s still not willing to accord it the seriousness required to transform it into a viable contributor to our economy and people. Ironically, the government’shandling of the power sector issues makes one wonder if it’s not out to prove, deliberately or inadvertently, that it either does not grasp the criticality of this sector’s continuously worsening situationor is not willing to let go of the status quowhich threatens not just the health of this sector but that of the whole economy.

Our prime minister recently admitted that the rapidly worsening situation in the power sector concerns him so muchthat he often loses sleep over it. By all counts, hemust, as the power sector issues are rapidly growing into a menace which, if not handled timely and properly, could lead to this sector’s collapse. But concern should spring us into action, and not despair, but the actions his team has taken since his assuming office, do not measure-up to his strong desire to see these issues resolved.

Secure, reliable, affordable, and sustainable power supplies to modern society are what lifeblood is to human body. Power supply and delivery is one of the most critical, complex and capital-intensive of infrastructures for any country. It is important in its own right as it helps a country in providing basic amenities of life to its citizens and turning the wheel of its economy. It’s even more critical as it underpins the proper functioning of all the other, equally-critical, infrastructures.

In this writer’s view, there are five essentials for a viable, vibrant, and sustainable power supply and delivery business for any country: (i) aclear strategic vision at the top; (ii)a carefully-crafted action plan; (iii) a set of consistent policies and their stability over time; (iv) a flexible and responsive institutional structure; and (v)a competent team of professionals free from political meddling. It’s from the above prism that when one sees our government’s performance in the power sector in the past two-and-a-half years that it seems to have faltered on every single count.

The institutional structures of the power sector entities, with centralized planning and control, may have been appropriate for a vertically-integrated industry, but have lost their utility in the changed energy market

“A leader is one who knows the way, goes the way, and shows the way,” writes John Calvin Maxwell, the noted American thinker who has studied and written extensively on the key attributes of successful leaders. The country’s terminally sick and constantlybleeding power sector needed a clear strategic vision at the top and a strong belief and trust in that vision undeterred by resistance on the ground from bureaucracy, political opponents, and local or international vested interests. What we see in reality is a total lack of preparation and churning out of quick-fixes and Band-Aids—good prescriptions for headache but not for a patient suffering from cancer.

Vision without action is merely a dream. Closer to completing its thirdyear inoffice, the government is yet to announce its plan to fix the power sector maladies. The closer we came to seeing it was three or four month back when most TV channels announced that the prime minister was all set to unveil his government’s plan for the power sector reform in a speech to the nation. What we saw instead was his SAPM on Power resigning from his position. The hopes were raised again when a new SAPM took over and we kept hearing that a roadmap was in the offing (“Government’s roadmap to fix the power sector: belated but promising.” Daily Times: November 26, 2020). These were razed to ground again last week when we heard rumors of the new SAPM also quitting, thus bringing us back to square one.

On the policy front, the government has faltered too. “Consistency” of policies among major sectors of the economy and sub-sectors and their “stability” over time are two pre-requisites for materializing the strategic vision of a government as these help build investors’ confidence, reduces their risk perceptions,and ultimately translate into increased investment flows at reduced demanded returns on their investments.

Starting with the 1994 private power policy, Pakistan has seen a streak of policies, introduced at regular intervals by successive governments in their effort to attract private investment in power sector generation. Most of these policies failed to deliver their intended objectives, however, and have often led to serious unintended consequences such as excess capacity, suppressed demand, circular debt, shifting of businesses to other countries, and higher-than-normal electricity prices.

All we saw in the past two-and-a-half years is a bunch of piecemeal, fragmented, issue-specific, and lobbyist-driven initiatives which can hardly be called an integrated and cohesive national policy.When devising national policies, effort is always made to set a clear hierarchy among different policies, from top national policies down to local ones. It’s also ensured that the policy for a particular sector guides those in its subsectors. Our governmentfollowed a reverse order and issued sub-sector policies first (ARE Policy and EV Policy), then the draft of the National Electricity Policy, and is planning to issue a National Energy Policy soon.

Organizations are not static in time and often lose their effectiveness with the passage of time as the environment around them changes. Theinstitutional structures of the power sector entities, with centralized planning and control, may have been appropriate for a vertically-integrated industry, but have lost their utility in the changed energy market. These now need to become increasingly flexible, adaptable, and responsive to efficiently and effectively handle the new demands placed on them.

No meaningful institutional reform has been introduced so far and these entities are still being run in the same old ways from the top. Case study after case studyfrom power sector reformsintroduced over the past 3 decades from around the world clearly demonstrate that a key enabler to thesuccess of these reforms has been the availability or creation of reform-friendly institutional structures and capacity on the ground. Thus, we cannot expect space-age performance from a stone-age institutional setup.

Last but far from the least, the government needed to deploy a competent team of professionals in the various power sector entities, strictly selected on merit and their vision, capacity, and competence to materialize the government’s vision for the power sector and effective execution of its plan. No such step was taken by the government on such lines and power sector entities are still being run by ad hoc appointments, violating the merit, or in many cases, by completely disregarding the technical competency and past track record of the incumbents.

New demands in any field pose new challenges, and require new vision and improved approaches. The writing on the wall is clear and crisp. If we continue to run the power sector the same old ways which have led it into the present quagmire, we can rest assured that we are heading for disaster. We must change course and provide the fundamental improvement or the symptoms will continue. The reward of having a viable power sector will be countless when contrasted with the politically expedient and short-sighted gains. It’s for the government to decide.

The writer is a freelance consultant, specializing in sustainable energy and power system planning and development.