THE inauguration of a ship-mounted 232 MW rental power plant off the coast of Karachi is a good time to revisit what the government is doing about the electricity crisis. Unhappily, the answer still appears to be: not much. The story of the ship-mounted rental power plant itself captures all the contradictions and inadequacies in the government's plans. Even as the plant was being inaugurated there was uncertainty about who would be provided the electricity generated by it — KESC or Pepco via the national grid? — as well as uncertainty about how high the tariff for electricity gene- rated by the RPP would be. This is, to put it mildly, quite bizarre.

Every little while, Pakistanis are presented with some 'developments' in the power sector. Pepco is to be dissolved and the long-delayed power-sector restructuring is to be pushed forward — but then, on second thoughts, it isn't. The fabulous coal reserves in Thar are to be tapped by cutting-edge technology and enormous power plants — but then firm deadlines are elusive. At this stage, the only thing clear is that the government has few ideas about how to fix the power crisis in the long run. Early into its term, two measures were settled on (raising power tariffs and fast-tracking rental- and independent-power projects based on expensive, imported fuels) and little beyond that appears to have been achieved. In the meantime, the so-called 'circular debt' crisis has exploded. The government has already transferred Rs300bn of debt to a Power Holding Company, but another Rs125bn is expected to be added soon — indicating that little has been done to resolve the underlying problems causing circular debt to keep piling up.

By now, the problems in the power sector have multiplied. First, the circular debt issue will have to be resolved before the sector can be restructured and prepared for eventual privatisation — financially unviable entities do not attract private investment. Second, the problems in the generation, transmission and distribution sectors will have to be addressed in order to provide more electricity at more economical rates to consumers. Despite tariffs going up enormously in recent years, the government was only expected to eliminate subsidies on electricity by 2011 — a task which seems rather difficult in the current environment. Part of the problem appears to be that the 'true' cost of electricity (think of it as what electricity would cost if the sector was reasonably efficient and cut enormous losses) is out of reach because a combination of creaking infrastructure, poor management and bad fuel-mix choices act to keep pushing up costs. But none of that will change until the government gets serious about power-sector reform.