Growth linked to cheap energy

LAHORE:Cheap energy and financing are two key components for the economic growth of the country. Appointment of experts with vested and conflict of interests while ignoring the fit and proper criteria in the name of power sector reforms increased the energy cost which resulted in increase in cost of doing business.

The concept of Boards in the energy sector was introduced to improve the working of the power sector by formulation of policies which improve the efficiencies and bringing down power generation and distribution cost was marred with the appointment of non-practitioner and political interest appointees.

This has increased the cost of the distribution companies (DISCOS), rather to reduce the energy cost of the consumers. These views were expressed by the experts, including former federal secretary power division Irfan Ali, Pepco former MD Tahir Basharat Cheema, LCCI President Mian Nauman Kabir on a discussion organised by Lahore Chamber of Commerce and Industry and Lahore Economic Journalist Association (LEJA) on “Energy Sector Reforms - Increase in Cost of doing Business”, here Thursday.

LCCI president Mian Nauman Kabir pointed out that the government ends the stakeholders’ representation on the DISCOS as previously the business community representatives were also on the Lesco Board. However, now the government did not give them representation on Boards.

He said the cheap energy and soft loans were two key components for the economic growth of the country. If the government ensure these two components nothing can stop the country from progress. He stressed the need of improving the energy mix by focusing towards the renewable cheaper and environment friendly energy generation.

Irfan Ali speaking on the occasion said that during the last three years the appointees in these Boards in the name of reforms managed to increase their meeting attending fee to three times which increased the expenses of the DISCOS.

The privatisation of power sector is impossible in the uniform tariff existence. Tahir Basharat Cheema suggested establishment of Power Sector Advisory Committee similar like Economic Advisory Committee (EAC) with a task of policy-making and advice on the sector to the government. There are issues in the IPPs contract, while the government is not financing the sector while the sector is asked to run on its own. So once the project is completed on investors’ money, or with loans then the cost of the energy increased. Cheema pointed out that overall default money of the power sector is Rs1.6 trillion out of which Rs one trillion is due on private sector and Rs600 billion on the public sector.

Responding to a question about political appointments in the Board, including the Chairman of the NTDC Naveed Ismail, Cheema revealed that the Securities & Exchange Commission of Pakistan (SECP) had made a fit and proper criterion for board members appointments, and which should be strictly followed.