Power industry calls for release of vital reports

Say it is crucial for decision-making, including impending privatisation of DISCOs

Photo: Reuters/File

ISLAMABAD:

Frustration is growing among power industry stakeholders due to significant delays in the release of crucial reports by the power regulator, which are essential for informed decision-making. In particular, the absence of timely data is hindering the effective functioning of the sector.

The World Bank’s “Public Expenditure Review” report has emphasised the urgent need for computerised mechanisms that can generate timely and aggregated data on State-Owned Enterprises (SOEs). This is seen as vital for fast-tracking critical decision-making processes, including the impending privatisation of XWDISCOs.

The World Bank has actively advocated for the divestment of SOE shares on the stock market as a practical solution for a phased privatisation of these entities. To potential shareholders, transparent Annual Reports of XWDISCOs that provide insights into their financial health are crucial for evaluating these companies as investment opportunities. Unfortunately, these reports often face significant delays in publication, even if the information may be available privately.

Moreover, the much-anticipated “State of the Industry” report on the power sector has also experienced delays in its annual publication, leaving policymakers and researchers awaiting its critical insights.

Experts in the power sector emphasise that this report is invaluable, offering a detailed overview of Pakistan’s power sector. It covers a wide range of essential aspects, including operational performance and the financial impact of issues such as low recovery rates, increased transmission and distribution losses, grid overloading, and numerous other challenges. For researchers, this document serves as the cornerstone for evidence-based policymaking.

Read Loss-making DISCOs struggle to avoid privatisation

Experts say access to information is the initial step in constructing comprehensive policies based on solid data. However, the absence of data sharing and information flow between various governing bodies, policy research organisations, educational institutions, and industry circles poses a significant challenge, especially as Pakistan’s economy grapples with stagnation and recovery efforts.

The World Bank has recommended the establishment of a central database under the Ministry of Finance, designed to showcase performance-based data, portfolio-level insights, and entity exposure information.

Over the past three years, the circular debt in the energy sector has surged to unsustainable levels, necessitating annual increases in government-set electricity prices to cope with this challenge. Rising inflation is affecting the ability of many consumers to pay their electricity bills and has reportedly led to increased incidents of theft.

Read more Power companies crack down on electricity theft

While the publication of such reports is a legal requirement under the Regulation of Generation, Transmission, and Distribution of Electric Power Act, 1997, the current situation reveals a time lag and lack of synergy between government institutions. The recent “Pakistan Public Expenditure Review 2023” report by the World Bank has highlighted the shortcomings of the Ministry of Finance and line ministries in maintaining updated data essential for evidence-based analysis and decision-making.

“These delays undermine the timeliness of interventions, with a significant impact on areas such as tax revenue shortfalls. The inability to establish back-end linkages between revenue collection authorities and banking databases hinders the finance division from accurately accounting for and assessing policy inputs required for sustained economic growth,” say officials.

Many experts view the current conditions as an ideal opportunity to establish a governance system where data plays a pivotal role in advancing Pakistan’s knowledge-based economy. The lack of available information affects the quality of policy research and the formulation of effective strategies.

Published in The Express Tribune, November 4th, 2023.

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