The power woes are nothing new. Every other day you hear of all kinds of circular debt figures – from Rs1.8 to Rs2.2 trillion. Whichever way you look at it, it is quite a hole. The government’s response, if it can be termed that, has been nothing close to the quantum of the problem at hand. This is not to say there has not been progress, but the progress, at most times, has revolved around revenue measures.
There is no denying the energy sector’s fiscal burden is getting out of hand, and there has to be a solution knitted around various revenue measures. The recent efforts to renegotiate the terms and conditions with the IPPs, CPEC projects and government owned power plants – are a step in the right direction, as that promises to set a good precedence for future reference tariffs.
What is often ignored and continues to be ignored is the technical side of affairs. The recently issued Performance Evaluation Report by the regulator highlights the issue and the gravity of the situation (read: The discos’ problem, published September 7,2020). The fact that the numbers have either worsened or stayed the same over five long years, during which time, various heavily funded reform programs were undertaken and completed, is nothing short of an indictment of the entire distribution system.
Another ignored area is the transmission sector. There has been some improvement in terms of laying out of new transmission lines, but the pace of progress has been painfully slow. The experts have often been critical of the neglect and have time and again stressed on simultaneous efforts to solve the problem.
Certain section of the media earlier quoted a report aimed at fixing the energy sector mess by a leading corporate, and it included a disturbing suggestion that expansion of the transmission infrastructure is not an imminent challenge and can be fixed later in a couple of years. This is exactly what has held the system back over the years. There is no such approach in correcting the mess that revolves around “taking one step at a time” and dealing with one issue before touching another.
Because the problem is complexed, it cannot possibly present an overly simplistic solution. The transmission sector is mired with all sorts of efficiency issues, capacity problems, faulty load calculations and so on. Suggesting dealing with it later, will only make the whole problem bigger and more complicated than it is. Here is hoping, the reform agenda, moves beyond pricing and pricing alone.