Overhauling the system

We have all heard that the devil is in the detail. If we have to see the neglect of public services in Pakistan, we need to look into the cogs that turn the wheel.

For too long has Pakistan’s ruling elite neglected the nuts and bolts that run the systems. The mismanagement of the irrigation water system and high power transmission and distribution losses are two case studies presented in this article to illustrate the point.

Let’s look at the inefficient irrigation system first. The literature on Pakistan’s irrigation system issues (Ahmed and Gautam, 2013) informs us about high water losses. With an estimated loss of 61 percent of water provided at the head of water system; only 41 million acre-feet (MAF) out of total of 106 MAF irrigates the crops. The big chunks of these high losses are attributed to about 25 MAF losses in the watercourses and 17 MAF losses in the fields. Look at it another way: by only saving 12 MAF of wasted water, Pakistan would increase its GDP by almost one percent and agricultural GDP by 4.2 percent.

Pakistan’s irrigation system was restructured in the 1990s to turn management from the public irrigation departments to provincial authorities, area water boards, and farmers’ organisations. However, these reforms have not been able to fully deliver water use efficiency despite ‘supposed’ participation of users. According to the literature, it led to more rent-seeking and monopolisation of those at the head of water courses at the cost of tail-enders.

Now, let’s turn to power transmission and distribution losses. A reading of the power regulator, National Electric Power Regulatory Authority (Nepra)’s ‘State of Industry Report 2017’ is quite telling. First the positive outcome: Pakistan has added more than 7,000 MW to its transmission system since 2013. We also know that the bulk of hefty CPEC funding is directed towards power generation through more cost-effective sources.

After power generation and transmission, Pakistan has ten distribution companies (DISCOs) all over the country that provide electricity to end-users. According to the Nepra report, DISCOs’ overall losses were about 18 percent for 2016-17. For the sake of comparison with other developing countries (Bennmessaoud et al, 2013), even as far back as 2011, the distribution losses were 7 percent in a company of Andhra Pradesh (India), 8.8 percent for a company in Java, Jakarta (Indonesia) and 12.6 percent in Edenor, Buenos Aires (Argentina). Other developing countries of comparative size would be even better now. Losses have relatively come down for Pakistan over the years, yet they have not come down sufficiently.

The costs of poor performance in the electricity sector are high. According to one estimate, it has reduced GDP growth by 2 percent annually in the past many years and subsidies amounted to another additional 1.8 percent of GDP (World Bank, 2017). Moreover, due to lack of investment in the transmission and distribution system, there are capacity issues to handle the additional electricity produced that leads to the overloading of existing distribution system. Even the much-needed emphasis on energy conservation is not optimally implemented.

What has Pakistan’s ruling elite been doing to plug such massive water and power losses? A cursory look at the government’s policy documents is revealing. The last parliament passed the Regulation of Generation, Transmission and Distribution of Electric Power (Amendment) Act in 2018 to restructure the energy sector and overhaul Nepra’s role and responsibilities.

The government’s key Poverty Reduction Strategy Paper (PRSP) – II (2010) mentions water resource management, improvement in water distribution systems and “efficiency of electricity generation, transmission, distribution” in passing. There is some discussion on energy conservation and renewable energy sources. In the annual PRSP Progress Report for FY 2016-17, no progress is reported to plug the water and power system losses. In the Planning Commission Yearbook 2017-18, there is scant mention of some ongoing projects. It is obvious that there is no systematic plan to plug the high water and power system losses in these policy documents, other than some marginal mentions in a few places.

Both the water and power sectors directly provide a service to the people of this country. The inability of Pakistan’s ruling elite to plug the high losses in both these sectors has not only had an adverse impact on the economy but also on the people of this country both in terms of service provision and public welfare consequences. The poor farmers at the tail end of watercourses often do not have access to surface irrigation water. Farmers not only spend disproportionately more on diesel costs to pump precious groundwater but in certain areas this also leads to salinity and water logging. Similarly, high transmission and distribution losses lead to loss of public welfare.

One can conclude then that Pakistan’s ruling elite is not serious enough about overhauling the systems of public services. This could be due to the overall issue of political instability in the country. Democracy has often been disrupted in the country. Even when, there is seemingly de jure continuation of democracy, previous civilian governments have faced enough threats to their survival so as not to think long term about the cogs of the wheel. Political governments also go for big-ticket infrastructure and other such high visibility projects rather than dealing with the nitty-gritty of fixing systems.

Let’s hope there is enough political stability in the years to come so that our ruling elite can undertake the difficult task of overhauling the public service provision systems rather than sloganeering about new glitzy projects only.

The writer is a freelance contributor.