Nepra, PPIB row over tariff: investment in power sector compromised!

Investment in the power sector has been compromised following the differences that cropped up on tariff issues between National Electric Power Regulatory Authority (Nepra) and Private Power Infrastructure Board (PPIB), it is learnt. Sources said that roles and responsibilities of the two organisations are well-defined but not adhered to and, consequently, investors are reluctant to invest in the power sector.
Nepra is slow in determining generation tariff for the private sector routinely exceeding the time limit set by itself for the process, which increases the cost to investors. As per risk analysis, the government was advised to redefine the roles of PPIB and Nepra, with the line of authority made clear and strictly followed.
The government was also advised to rationalise the quality of human resources and quantum needs of PPIB and Nepra as harmony and co-ordination between these institutions is critical to attracting investment in power sector. The resistance within the bureaucracy could be a possible hurdle in any move to redefine the roles of PPIB and Nepra.
However, redefining and enforcing lines of responsibility would clip excess power of the regulator acquired slowly over time. The time required for tariff approval must be reduced and strict adherence to the standard timeline must be meticulously adhered to.
Foreign investors are willing to invest in banking, telecom and IT sectors, but have shied away from the power sector due to sector specific policy, regulations, liquidity and operational issues. This has compromised the ability of the government to attract investment for implementation of Vision 2020 for power sector. The energy crisis is a major challenge Pakistan is facing for the last few years which is negatively impacting on the socio-political as well as economy of the country.
The country has therefore not been able to exploit considerable local resources to meet the growing demand for electricity. Pakistan has estimated coal reserves of 185 billion tons with a hydropower potential of over 20,000 MW, but the investment continues to be a major challenge.