Starting with the 1994 private power policy, Pakistan has seen a streak of energy policies, introduced at regular intervals by successive governments in their bid to fuel the growing economy and serve the demands of the burgeoning population. Most of these policies, however, failed to deliver their intended outcomes during implementation. Often, these policies have also led to serious unintended consequences such as excess capacity, suppressed demand, piling up of circular debt, relocating of local businesses to other countries, and raising fuel and electricity prices beyond the reach of common citizens.
Multiple factors may have contributed to the failure or lackluster performance of these policies, but a critical and often neglected factor has been the lack of supportive institutional capacity on ground that was requisite for their efficient and effective performance. As new energy policies are currently in the offing, our policy makers must assess upfront the compatibility of our existing institutions with the new demands these policies will impose on them and ensure that people and systems there are sufficiently capable of performing their new roles and responsibilities.
Public sector policies, prior to their implementation, are generally filtered through a four-pronged evaluation criteria: (i) their effectiveness in achieving the intended objectives; (ii) their efficiency in delivering the designed benefits with respect to their implementation costs; (iii) their equity in distribution of costs and benefits across different stakeholders; and (iv) the feasibility and compatibility of existing institutions for their efficient and effective implementation.
It is difficult to comment whether the past energy policies, before their introduction, were screened through these lenses or not, but considerable evidence exists to suggest that the compatibility of the existing institutions with the demands of the new policies was either ignored or not given a serious consideration. Not infrequently, the capacity of public sector institutions entrusted with the implementation of the new policies proved inadequate, and often at odds with what was actually required for successful performance of these policies.
A policy appearing perfect on paper may also not perform well if the elements required for its implementation do not exist or are not provided
Deficiencies in the design of these policies and corrupt practices during their implementation are often cited as the two main reasons for their failure. There is arguably some truth to this viewpoint, but lack of compatibility of the existing institutions for effective implementation of the new policies has also been an important factor behind their failure or poor performance.
The past energy policies were designed, most of the time, without any active or meaningful participation of the implementing entities. Even after their enforcement, these entities were not properly communicated about the objectives of these policies and what exactly was expected of them during the implementation process. This led to not just a gap between what was being asked and what could actually be delivered but also to lack of ownership and motivation during the implementation stages.
Little or no consideration was given to availability of, or developing afresh, the requisite competencies, skills, and toolkits to equip the staff of the implementing entities for dealing with the complex new technical and legal issues that they had to grapple with in the new policy frameworks and environment. This placed them at a considerable disadvantage vis-à-vis other actors who came fully equipped with such expertise and skills. This led to signing of terms & conditions in the long-term agreements and contracts whose implications surfaced only much later.
On many occasions, the implementing agencies did voice their concerns with higher authorities and highlighted the dire need for training & development of their professional staff to equip them with the required skills and tools or for hiring new staff with the required skills. Such concerns and apprehensions were mostly brushed aside. The implementing entities could not manage these requirements at their own for lack of financial resources. No financial help was provided to them by the government agencies at the top that just kept pushing them for speedy implementation.
Oftentimes, the objectives and requirements of the new policies came in direct conflict with the interests of the implementing entities. No effort was made by the policy makers to remove such conflicts during design of the new policies or during the implementation phase even when these were brought to their notice. This mismatch in interests culminated in considerable friction during the implementation stages and seeking out of escape routes by these entities to delay or avoid implementation of new policies in true spirit.
The present government is currently seeking to introduce a number of reforms in the energy sector, in general, and the power sector, in particular. New policy initiatives and instruments are being considered to overcome the present crisis and reorganize the whole energy sector on sound and sustainable footings. It will be prudent for the government to exercise utmost care and diligence to avoid the mistakes that were made during the formulation and implementation of the previous policies.
There is also a compelling need to streamline, institutionalize, and formalize the whole policy formulation and implementation process in the country by making it open, transparent, and consultative, as this will enhance the prospects of their success. The government must screen every policy option from the four-pronged evaluation criteria referred to in the third paragraph above. Our policymakers must not ignore or overlook the 4th criterion, that is, the feasibility and compatibility of the existing institutions for effectively implementing the intended reforms and policy instruments.
Wherever gaps or incongruities are identified or suspected, it would be worth addressing them upfront to bridge and align them with new demands. With the increasing liberalization of the energy and power sectors, many of the transactions that were used to be managed informally among the different functions within the integrated institutional setup will now be shifted to the market or commercial contracts. It is critical that these agencies’ capabilities to develop, negotiate, and agree the terms & conditions of these contractual instruments with the private sector parties be sufficiently enhanced.
It may also be an investment worth its cost, if the government can develop a set of standardized model agreements and contracts and make these available as part of the respective new policies to ensure an even handed dealing for all the relevant parties and to minimize the risks of agreeing on any terms & conditions that unduly skew them in favor of any particular party.
Every time a new reform or policy is introduced, the relevant custodian agency of the policy should organize orientation workshops for the agencies that are to implement these policies to acquaint them with the purpose and objectives of the new policy and their expected roles and responsibilities in making it successful.
Wherever necessary, the relevant staff of these implementing entities should also be provided adequate education & training and toolkits that they will need to serve effectively in their new roles and responsibilities and, not to miss, also the funds that these agencies will need for the implementation of the new policies.
Just as a good sapling will not grow into a fruit-bearing tree in the absence of suitable ambience and proper nourishment, a policy appearing perfect on paper may also not perform well if the elements required for its implementation do not exist or are not provided. The government, therefore, must ensure that not only the new policies are sound conceptually but will also have in place the supportive institutional capacity requisite for their successful implementation.
The writer is a freelance consultant specializing in sustainable energy and power system planning and development