Mian Zahid urges govt to focus on administrative reforms

KARACHI: The Chairman of National Business Group Pakistan, the President of the Pakistan Businessmen and Intellectuals Forum, the President of All Karachi Industrial Alliance, the Chairman of the FPCCI Advisory Board, Mian Zahid Hussain urged the government to focus on administrative reforms instead of price hikes.

He identified electricity theft, line losses, and a poorly maintained transmission system as the root causes of circular debt. Without addressing these issues, no financial plan can succeed. If left unresolved, the reliance on bank loans will continue to increase the public’s burden. This outcome is neither rational nor acceptable.

He opposed that electricity distribution companies be granted greater autonomy while ensuring rigorous performance oversight to help them meet their operational targets.

He highlighted the potential of increasing investment in the power sector through public-private partnerships, especially in renewable energy projects. Such investments could not only enhance power generation but also reduce dependence on imported fuel, offering a promising future for the sector.

He called for transparency and accountability in all reform initiatives, emphasizing that these are crucial to prevent vested interests from sabotaging progress and to ensure the integrity of the reform process.

Finally, he urged the government to reduce electricity tariffs instead of raising them and to lower the cost to nine cents per unit. This, he argued, is essential to boost Pakistan’s exports; without it, eliminating the $ 28 billion trade deficit will be impossible. A balanced, fair, and sustainable energy policy, he concluded, is the only way to end circular debt, stabilize the economy, and ensure public welfare.

He said that government’s recent steps to eliminate circular debt in the power sector are laudable. He emphasized that circular debt, a term used to describe the vicious cycle of unpaid bills and loans within the power sector, has posed a persistent threat to the economy, industry, and public for several decades. Mian Zahid noted that circular debt not only weakens the financial capacity of power generation companies but also undermines the efficiency of the transmission and distribution system. This, in turn, discourages investment in the power sector and hampers the continuity of electricity generation.

He noted that government measures, such as borrowing from banks to settle outstanding dues, curbing electricity theft, and initiating action against defaulters, are indicators of long-overdue reforms. These measures must be sustained and implemented effectively to achieve lasting impact. He emphasized that resolving the financial challenges of the power sector is crucial to ensuring cost stability in electricity and providing affordable energy to industries. However, he warned that making the public bear the brunt of these efforts, such as through increased electricity bills, is neither just nor practical.

Mian Zahid criticized the strategy of repeatedly increasing tariffs as a weak and short-sighted approach that negatively impacts both ordinary consumers and the business community while further inflating industrial costs.

Copyright Business Recorder, 2025