BR Research

Power reforms wounded by governments inefficiencies

Published September 16, 2010 Updated September 16, 2010 12:00am

In Pakistan, crisis has been the most consistently used word in the last two decades. Power crisis leads the list; be it the one emanating from political power grabbing or the power sector crisis. Interestingly, both have a thing in common: inconsistency.
The latest blow to the slightest hopes of betterment in the power sector woes of the country has come with the recently issued Asian Development Banks report on the completion of technical assessment.
The ADB, which also happens to be Pakistans largest development partner in the power sector, started a reform programme focused on improving and institutionalizing Pakistans power sector back in 2008 with a million dollars allocated for the initial assessment.
After more than two years of painstaking work, all that the ADB could achieve was painful delays, non-implementation of specific rules, non-serious attitude from the government authorities and a visible lack of focus - all of which naturally led the ADB to declare the exercise as fruitless and less efficient.
The primary motive of ADBs reform programme was to decouple the power-purchasing functions from the domain of transmission services. The aim was to achieve transparency, market focus and private sector investments as the existing central body, the National Transmission and Despatch Company (NTDC), already had enough on its plate to deal with.
What rocked the reform plan was the continuous chop and change in key government positions and shuffling of important members, which prevented the train from running smoothly. Moreover, the consulting team for technical assistance failed to incorporate the sector realities and prevailing market conditions, which put the proceeding on the wrong path.
The governments lack of focus on reforming the ailing power sector can be gauged from the fact that the ADB consulting team was not even provided with office space to undertake the task which requires frequent interaction with clients. Even technical assistance was mired by personality clashes between the consulting team leader and the executing agency - the ego clash didn prove conducive for the already slow progress.
The most important conclusion drawn by the ADB is that the government lacks political will in implementing the reforms. The report has highlighted the point that there is a need to address the structural and fiscal constraints in the system which have been the pinnacle of the problem. The ADBs recommendations, therefore, make sense as technical assistance should not be the first step in overhauling Pakistans power sector.
Whats worrying is that the ADB has given up hopes of technical reforms in the current scenario. The government needs to learn form this exercise and show the will to fix the problems which range from line losses to poor billing collection units. For this to happen, a team of thorough professionals has to be selected purely on merit, without any major shuffling for a considerable period. But that of course requires a mammoth-like will.