Gerrymandering and the poor Discos

Come rain or storm, the political animal will never leave the chance to reap the best out of the economy of any sector. This pursuit is evident in treatment being meted out to the poor DISCOs and that too without understanding the issues and the fact that government itself is the problem. In other words, the government’s relationship with the PSCEs (Power Sector Corporatized Entities) and specifically with the DISCOs has to undergo a paradigm change or at least a shift is in order.

And what are the issues that beset the Discos and as to why these utilities are unable to serve their clientele. These are very simple and surely in the know of all who matter. On the other hand, as nothing changes it could only be apathy and nothing else. That the wheel keeps on being invented every now and then, proves the poverty of those who matter.

Dwelling on the pathetic situation around us, we see that DISCOs face the wrath of a lackluster policy crafted by the generalist (who had been tasked for it) and helped by the USAID people then embedded in the power ministry. The policy, unfortunately, does not have any legs to stand upon and also lacks support from other stakeholders.

Similarly, the allied plans are juvenile to say the least. The main purpose of the policy and the plan is to sustain the present unsustainable operations of the power sector and nothing else. Only lip service is made to assure provision of global grid cover for the Country.

Thereafter, the governance remains with the generalist at the MOE (ministry of energy), while management has been doled out to the politically infested Disco BoDs. All of the CEOs – retained for operational management, are temps or unsuitable at all for their positions.

HRM and HRD are unknown quantities – leading to inapt HR and over 60,000 unfilled vacancies at the operational level, while DISCO HQs are extremely top heavy. No O&M study has ever been contemplated – all in all, a recipe that will never be palatable and nor ever deliver.

From the above, it is concluded that the government is the issue, while failing writ in huge swaths of the country further inhibits proper operations of the power sector in general and the DISCOs in particular. The proof remains in the recent national campaign to curb illegal abstraction (theft and stealing) of energy, which remained tepid with the recovery of only Rs 71.00 billion in 54 days of the activity.

It started without any warnings to those who indulge in this nefarious theft and then ended without any proclamation that all of the wrongdoing had been curbed or that the campaign would soon start again etc. Many utility employees were injured in the campaign while all of the thousand of instituted FIRs are still in their initial process, with no convictions at all. So much for the writ of the state.

It was in this context that thrice in the past an effort has been made to somehow spare the federal government/GoP of its onerous burden of managing DISCOs and to then fund its losses. The smart advisors advocated hand-over of these hemorrhaging entities to the un-suspecting provinces, whereafter the PPP (Power Purchase Price) invoices of the CPPA(G) would be automatically deducted at the federal level – thus all would be well, and the federal government would be saved from any loss.

During such parlays in 2012, KPK offered to take over operations provided the then 3600MW Tarbela HPP too (it has since been added by1500 MW while another 1500 MW is in the offing) would be added as dowry. Punjab, headed by a very sagacious CS wanted the GoP to firstly transfer the five DISCOs in its geographical territory free from any encumbrance and that a specific amount would be paid to the province for the next 5-10 years whereby, the decrepit infrastructure (on account of the mismanagement by the Centre) could be brought to the required international standards.

Sindh, at the juncture was bereft of its black gold and extremely cheap Thar fueled electricity, simply abstained from taking-up any responsibility for the perpetually loss-making Discos in its territory. Baluchistan was just a bystander and thus did not make any offer – for or against the Centre’s offer.

The second such offer during 2013-18 was a non-starter and plans to the effect remained on paper alone. In fact, better sense prevailed and so-called reforms were taken up without any feathers being ruffled. The third such effort was scuttled by the SIFC (special investment facilitation council), when it was decided to implement the Turkish model of giving the DISCOs on long-term concessions.

Before this most correct decision, the Federal Government through the Power Division went into parlays with the provinces. In this case too, Sindh was far ahead of others and had hired a transaction advisor to draft the scheme for transfer of the two DISCOs operating in its territorial jurisdiction viz. HESCO and SEPCO provided the federation vowed to maintain the uniform tariff for the next 10 years.

On the other hand, it was said that by a decade or so Sindh will have enough extremely cheap Thar Coal-fired power generation and that the province then could have the most affordable power tariff for its population. Punjab, as usual was late and gleefully contemplated taking-over the five DISCOs in its geographical area. Instead of engaging professional help, its energy department seemed to contemplate as to what could be gained from the transfer. KPK and Balochistan stood their ground as was their stance in the first of such parlays.

Thereafter better sense prevailed and the SIFC, surely weighing all pros and cons, decided to correct course and then take up effort for the possible long-term concessions. Concurrently, the PC (Privatisation Commission) tasked to enhance growth and productivity of the Country’s economy through active participation and by harnessing the private sector as its engine of growth, has been working on the same issue. The Commission too favoured the long-term concession’s model.

Come the new government and surely a business-friendly Prime Minister who instead of remaining on course, has ordered some committee to work once more to transfer the DISCOs to the provinces. As the Federal Government has been unable to counter the issues besetting the Discos, it is simply preposterous to think that the provinces would deliver.

On the other hand, as even the Cabinet had not been notified, hence this direction could not have been any considered opinion or even a page out of the earlier Pakistan Muslim League-Nawaz’s (PML-N’s) manifestos – which talked about privatization in a big manner.

Although this time, the manifesto is silent, but privately everyone agrees that privatization is indeed the solution for the Power Sector. The change in the mindset could be just a kneejerk reaction to some alarm raised by a close confidant or pressure from concerned political circles to keep the Discos under control

The solution now is to stay away from any other solution and let long-term concession(s) in line with the successful Turkish model save the Power Sector from any politically motivated vandalism. The quicker Discos are given to qualified entities, the less would be the loss for the Country and the people.

However, it is of extreme importance that the process of giving the concessions has to be extremely transparent so as to assure induction of the best of the best – with the needed financial depth and the expertise that matches the levels set by the best international practices. Actually, all experimentation or re-inventions of the wheel have to be shunned. In this case, due professionalism is the requirement instead of any whimsical decisions.

Copyright Business Recorder, 2024