No action against political appointees

Besides LESCO, PDM govt appointed MPs’ relatives on two other DISCOs

ISLAMABAD:

The caretaker government seems to be unwilling to take action against the people appointed on the board of directors of power distribution companies (DISCOs) on political grounds, though it has initiated an anti-power theft campaign to curb the wastage of electricity and rein in the soaring circular debt.

The ailing power sector’s circular debt is increasing without any significant check whereas consumers are receiving inflated electricity bills. This stems from the inefficiency of DISCOs and their inability to tackle electricity stealing.

In addition, the close associates of political parties enjoy perks and privileges by sitting on the board of directors of DISCOs. They are also said to be manipulating power supply schemes in a bid to woo voters in the upcoming general elections.

Apart from the board of Lahore Electric Supply Company (Lesco), the close relatives of the parliamentarians belonging to the Pakistan Peoples Party (PPP) and the Pakistan Muslim League-Nawaz (PML-N) had been placed by the previous Pakistan Democratic Movement (PDM) government on the boards of two other companies.

Read Legal czars urge CJ to steer country off cliff

The board of directors should comprise independent members who are required to give vital input for policymaking in an effort to bring improvement and promote efficiency in the affairs of state-owned companies.

DISCOs have already contributed a lot to the mounting circular debt, which amounts to Rs2.3 trillion owing to rampant power theft and other losses.

Earlier, it was reported that the PDM government, led by the PML-N, had placed in Lesco board such directors that were either active workers of the PML-N or sons of National Assembly lawmakers and Punjab Assembly members.

Interestingly, the Lesco board chairman is an active member of the PML-N and is running political campaigns.

Now, it has surfaced that either close relatives of parliamentarians or their cronies were also appointed on the boards of Faisalabad Electric Supply Company (Fesco) and Hyderabad Electric Supply Company (Hesco).

Muhammad Tahseen Alvi was appointed chairman of the Fesco board by the PDM government. He is said to be an active member of the PML-N and a close associate of a former federal minister from the Faisalabad constituency.

Another board member is the secretary of the Wapda housing society. This is a conflict of interest as housing societies are preferred in the provision of electricity infrastructure by the utility companies.

Read more SC issues proposed cause list for Oct

In the case of Hesco too, the close associates of the PML-N and PPP high-ups have been found dominating the board of directors.

These appointments are a conflict of interest as the directors belonging to political parties may manipulate a company’s affairs in favour of launching politically motivated electricity schemes in their constituencies.

Previously, the members of the Pakistan Tehreek-e-Insaf (PTI)-led government had been looking for ways to secure positions on the boards of state-run companies.

However, they were hindered by the existing legislation that prevented parliamentarians from serving as directors on company boards. Despite efforts, the PTI government could not succeed in amending the law to achieve its objectives.

Later, the PDM government found an unconventional way of exerting its influence over the Lesco board. Parliamentarians of the PML-N and PPP managed to place their sons and close relatives on the boards of directors.

These appointments have raised significant concerns about transparency as the board members are likely to use their influence over the companies’ administrative matters and push for electricity supply projects in their constituencies.

Sources point out that Lesco’s ageing power distribution infrastructure frequently leads to transformer failures. Additionally, it appears all new transformers are being installed in the constituencies of politically connected board members.

Experts have expressed their dismay at these practices as they have not observed such nepotism in the past, where independent directors typically came from families with political background.

They have emphasised the importance of appointing independent directors based on their professional expertise, particularly because DISCOs are already grappling with high losses due to inefficiency and electricity theft.

One expert noted that the appointments made for political reasons could further erode the performance of those companies.

Meanwhile, many consumers are finding it nearly impossible to cope with excessively high electricity bills, primarily driven by increased capacity charges.

The power-sector regulator has recently raised concerns about the performance of chief executive officers of DISCOs, who appear to have less knowledge of how much electricity can be procured from power producers. This has resulted in DISCOs procuring less electricity, leading to higher capacity payments, a situation they failed to justify during a public hearing.

Published in The Express Tribune, September 24^th, 2023.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.