Investment by Fatimah Group in Transmission and Distribution (T&D) needs to be welcomed. Grant of licence by National Electric Power Regulatory Authority (Nepra) for construction and owning the transmission facility is undoubtedly a landmark event.
In hindsight, the government should have first privatised T&D instead of generation – as was done in Latin America – as T&D is much more difficult to operate and it involves billing and collection on time with greater accuracy and precision. However, we have wasted valuable time in first unbundling of Wapda and creating the eight T&D companies which have contributed to a very large extent to the notorious circular debt which is hampering economic development.
Prime Minister Nawaz Sharif’s government is focusing on electric power field as he knows that this will be the touchstone on which the future election will depend on. Two successive governments – PML(Q) and PPP – have lost elections for their failure to provide electricity to consumers with regularity and also the economy continues to suffer badly. By not merging the two ministries, i.e., Water and Power with Petroleum and Natural Resources, PML-N has added to its difficulties and also reneged on its promise it made to the electorate in its election manifesto.
Not only does the government required to bridge power supply-demand gap, it is also needed to attract investments towards upgrading the T&D system, avoiding frequent power breakdowns and minimizing transmission losses. And, above all else provide electricity at affordable prices to consumers.
The prices of furnace fuel oil have come down by more than half. But the monthly increase in circular debt does not commensurate with this. This goes to show that all is not well in the Discos and governmental plans to privatise three of them within this financial year; the process needs to be expedited.
The Regional Distribution Companies (Discos) would indeed be unhappy with competition from other private sector entities. Let them compete. Efficiency and competition will lower the electricity tariff for delivery.
Pakistan’s energy problems dominate policy attention but the results on the ground are not forthcoming as yet. All that has happened that there may have been a reduction in daily loadshedding.
But some of this improvement has been countered with added frequency of breakdowns due to overloading of the system. Line losses have only come down, albeit marginally. Recoveries of power bills on time is still an acute problem. Restructuring of Gencos and Discos has not resulted in reduction of circular debt. Theft continues.
We seem to take decisions on ad hoc basis instead of having a credible power policy which needs to be in place – for a number of years – without revision. Characterized by nepotism priority list continues to change, causing industrial shutdown leading to reduction in economic output.
Private sector is putting up power plants; however, it is unable to market the generated electricity because regional Discos – owned and operated by the government – are not willing to give up their monopoly on T&D.
It is still not clear what the future holds because provinces and the federal government are not on the same page. Blame-game needs to end. The social contract between the people and those in authority needs to be adhered to with a view to avoiding fissiparous tendencies.
Nepra as the apex regulator needs to end the monopoly of Discos and fix charges on a backbone and hub model so that enhanced power can reach destinations for the benefit of all.