Reform or rhetoric?

EDITORIAL: That it took this long to inject merit and transparency into Pakistan’s power sector is itself an indictment of decades of mismanagement.

Still, Prime Minister Shehbaz Sharif’s approval of the revised Indicative Generation Capacity Expansion Plan (IGCEP 2025–35) is a welcome departure from the rent-seeking, politically motivated decision-making that has long defined electricity planning in the country. By scrapping 7,967 megawatts of high-cost projects and rescheduling others, the government claims savings of USD 17 billion — a figure that underscores just how much waste was built into the old model.

For years, the power sector has operated as a parallel economy — driven less by national interest and more by vested ones. The plan’s pivot away from expensive, imported fuels and towards domestic and renewable sources is both logical and long overdue. It should never have required a crisis to realise that relying on costly generation while locking the state into capacity payments and sovereign guarantees was unsustainable. Yet that is precisely the legacy this reform effort must now overcome.

On paper, the changes are sound. By cutting the original 14,984MW generation expansion target in half, and prioritising 7,987MW of projects based on local resources — hydro, wind, solar, and nuclear — the IGCEP marks a clear shift toward affordability, efficiency, and long-term sustainability. The commitment to ending the single-buyer model, eliminating capacity charges, and opening the door to competitive bidding are all necessary steps toward a functioning electricity market.

But these steps should have been taken a decade ago. For too long, power projects were awarded on a cost-plus basis with little regard for actual need or affordability, producing a glut of idle capacity and rising tariffs for consumers. That culture of inefficiency and impunity was not a design flaw — it was the system. One can only hope that this latest attempt at reform does more than tinker at the margins.

Also worth noting is the exclusion of K-Electric’s renewable energy proposals from the IGCEP. While officials have justified the move by pointing to available alternatives like Thar coal and nuclear power near KE’s system, it remains to be seen whether this exclusion will serve consumer interests in Karachi or simply reinforce old fault lines between the utility and federal planners. KE’s instruction to set up its own time-line to access the National Grid might make technical sense, but it also reflects a persistent inability to integrate planning across jurisdictions.

That the plan was revised only after a groundswell of concern — triggered by falling demand, surging net metering, and a growing stockpile of underutilised capacity — should serve as a cautionary tale. Officials now admit that previous iterations of the IGCEP were laden with projects that lacked even basic financial progress or construction benchmarks. That nearly 15,000MW of such “committed” capacity has now been either cut or rescheduled only confirms how deeply flawed the planning process was.

This is where the government’s real test lies. Replacing megawatts is easy; replacing the culture that enabled poor planning and contractual exploitation is not. Corruption, inefficiency, and bureaucratic inertia continue to grease palms all the way to the top. If these reforms are to yield lasting benefits, they must be accompanied by structural discipline — regulatory clarity, professional independence, and a willingness to prosecute those who looted the sector under previous regimes.

In the end, consumers want affordable, reliable power. Producers want clear rules and predictable returns. And the country needs a power sector that supports, not stifles, economic growth. The IGCEP 2025–35 offers a framework to move in that direction. Better late than never, so to speak. But if the same old habits resurface under a new cover, we may not get another chance to fix what’s broken.

Copyright Business Recorder, 2025