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September 10, 2018

Similar strategies


September 10, 2018

After the conclusion of last week’s meeting of the Economic Coordination Committee (ECC), the PTI government said that addressing issues in the power sector would be a priority. However, the approach once again appears to be a process of mix and match, rather than coherence. The decisions taken in the ECC meeting included raising the power tariff, auditing the power sector, introducing pre-paid electricity meters, a special committee for K-Electric and the promise of a plan to solve the circular debt issue. So far, this sounds much like the former PML-N government. The promise appears to be one of replacing bad corporate managers with good corporate managers. The tenor of such decisions is ridden by the belief that the PTI cabinet is made up of the latter. But perhaps the case of K-Electric, for whom a separate committee will be created, should make them question this distinction. Corporate control has not drastically improved the performance of former public-sector enterprises in Pakistan. The promise of legal action against those responsible for the Rs1.14 trillion in circular debt is another mistaken priority. The focus should be on solving the problem, which has little to do with corrupt practices.

The need to chart out a different path is important to solving the issues in the power sector. Take the issue of installing prepaid electricity meters. How could this be the first concrete decision to ‘reform’ the power sector? The PTI promised to move the earth and moon to reform the economy but the first thing that comes to mind is meters? There have been numerous experiments in changing meters, usually involving big loans from international donors. Only recently, the PML-N government wisely decided not to take another loan to install a new type of meters across Pakistan. This is how useless debt is accumulated in the power sector. Meters are the last node in the power sector, with current meter technology more than sufficient to bill electricity consumers the right amount. The change is not promised to address the issue of DISCOs overbilling customers. It is designed to make sure no one who doesn’t pay for electricity consumes it. If this is necessary, it can be done without installing new meters. The decision to audit the power sector is good, but a full audit takes years, not months. The decisions on reform will have to be made without this in place. The PTI government is showing that it means business, but one would hope that it does not repeat strategies that have been tried before – and failed.

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