THE aftermath of two events has underscored the dire need for more transparency in the power sector.

One is the noise created around the Nandipur project, and the second is the annual report of Nepra, the power regulator.

The Nandipur project was supposed to undergo a comprehensive and impartial probe; but according to the latest reports, the government has not been able to find anyone willing to head a committee inquiring into the matter.

A separate inquiry committee initiated by Nepra has also been questioned by the head of the project itself, while a private-sector auditor has refused to conduct a technical audit, saying its expertise lies only in financial matters.

Also read: Nepra sticks to report on power sector deficiencies

So we have a situation where the project is now undergoing two separate financial audits, one by the Auditor General of Pakistan and the other by a private-sector company — however, no technical parameters will be scrutinised.

Nepra’s annual report, on the other hand, raised important technical issues in the power sector, including overbilling through time-of-use meters, which are used by a very small number of consumers in any event, as well as questions regarding the choice of power plant to operate given the variable levels of their efficiency.

The water and power ministry has questioned Nepra’s capacity to draw the conclusions it has in the annual report. As if to underline the ministry’s objections, Nepra has reportedly refused to undertake a technical audit of a number of power plants. It says that it does not have the mandate to perform such an exercise.

The ministry, in a separate request, had asked the regulator to undertake an energy cost audit of various power producers to determine which ones were operating at their stated level of efficiency, and therefore what adjustments might be necessary to their tariffs.

The all-round failure of independent bodies, whether government, semi-government, independently constituted inquiry commissions or private-sector companies, to probe various issues in the country’s power generation shows the sheer opacity under which the entire power sector operates.

Transparency is needed in every area of the sector, from technical audits of generation to transmission and distribution issues, to billing and recoveries, so that a reliable picture can be built of the state of affairs within the sector.

But regrettably, given the present circumstances, the events of the past few weeks show that such a picture is totally absent today.

The power sector is far too large an entity to be centrally controlled by a couple of ministers and the bureaucracy.

It needs institutional reforms that create the right incentives to maximise efficiency and minimise costs.

Strengthening the regulator and increasing the role of private-sector professionals in the running of the sector as a whole are crucial ingredients of such a reform effort, but sadly, they appear to be a distant dream at the moment.

Published in Dawn, October 7th , 2015

On a mobile phone? Get the Dawn Mobile App: Apple Store | Google Play