Energy Exchange

THAT the energy sector is in a deep mess and is pulling down the moribund national economy further is a reality. Decades of mismanagement of the power sector, rampant corruption, theft, bad policies and lack of investment in the distribution network have made electricity unaffordable for the vast majority and brought this crucial area of national life to the brink of collapse. Those who can afford it are rapidly moving away from the national grid to shield themselves from exorbitant power prices. Inefficient and energy-dependent businesses are groaning under bloated bills as the government dismantles its generous subsidy regime for industry under the IMF deal.The Shehbaz Sharif administration now seems to be moving in different directions to ease the pain being felt by the urban middle-class consumers of electricity as well as industry. Aside from forming a task force on power sector reforms and co-opting ‘technocrats,’ officials are rhapsodizing about multiple ways to reduce the electricity prices. Successive governments have pledged to focus on and tackle the issues plaguing the energy sector, the power industry in particular, but none have ever made a concerted effort at comprehensive reform.These include, but are not restricted to, the privatization of state-owned energy companies, investments in the oil and gas exploration industry, the retirement of outdated, inefficient plants, the reduction of government-owned plant returns on equity, the substitution of Thar lignite for imported coal, and incentives designed to increase demand for electricity, particularly in the winter. There are several and readily available solutions to the electricity issue. While some are extremely early in providing assistance, others can be implemented over a period of several months. If this is a real problem, the government should work with IPP owners and specialists instead of appointing quacks who will simply make things more complicated by making things harder for investors, rather than genuinely attempting to find a solution.