New doubts

Published May 18, 2012

LAST week’s decision to release Rs7bn to address the liquidity issues of the power sector is what can be expected when decision-making at the highest levels of government is either paralysed or following a different game plan altogether. For some perspective, consider this. The amount that is owed to Pakistan State Oil by the power sector for furnace oil deliveries has touched Rs180bn, and is climbing. The amount owed by the government to the IPPs for electricity generated is reportedly in excess of Rs200bn. And the amount that the Pakistan Electric Power Company claims it is owed in outstanding bills is larger than Rs350bn. Where does a disbursement of Rs7bn stand next to numbers such as these? It has now become an old pattern. The government refuses to acknowledge the country’s power crisis in anything other than words. The payment issues in the power sector continue to touch monstrous proportions. The power deficit, which had touched an annual peak of 3,500MW when the government came into power, has today ballooned to cross 7,500MW, more than double where it was at the start of this government’s tenure.

The speed at which the power crisis is turning into a national catastrophe is alarming. The steps that are required to undo this slide are widely known. The report of a group of experts that was prepared in 2009 has been gathering dust since then, while the highest levels of government debate nonsensical proposals to build more control centres. Meanwhile, small disbursements that are barely enough to avert a potentially catastrophic sovereign default are released on an ad hoc basis to keep the enterprise going on a day-to-day basis.

Government inaction on the question of the power crisis, especially in the run-up to a general election, now inspires a whole new line of questioning. For instance, is it possible that the government in fact wants to perpetuate this state of affairs in the power sector rather than resolve it? This may sound far-fetched to some but the very fact that questions casting doubts on the government’s intentions are gaining ground in the run-up to the next general election shows the level to which our policy dialogue has degenerated. It is little more than a squabbling mêlée of the most narrowly construed vested interests. When the government throws Rs7bn at a trillion-rupee problem, it is enough to make one wonder whether the rulers want to keep the larger problem around for reasons that are too dark to contemplate. And that is no gratuitous pun.

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