Acute energy shortages: Committee fails to come up with concrete solution

Published: September 8, 2011
SUBSIDY: Rs240b is the amount the
committee says should
be disbursed before any
meaningful reforms. DESIGN: SAMAD SIDDIQUI

SUBSIDY: Rs240b is the amount the committee says should be disbursed before any meaningful reforms. DESIGN: SAMAD SIDDIQUI


The Cabinet Committee on Energy Crisis, with its members huddled behind closed doors, has failed to come up with a tangible solution to the crippling energy shortage in the country even though one month has passed since its constitution.

The best it has been able to come up with is the old, unimplemented strategy which places stress on disbursing Rs240 billion in subsidy to resolve the circular debt issue, before the initiation of any meaningful reforms.

The special cabinet panel that the premier constituted in early August to find a tangible solution to the energy crisis met here on Wednesday. Sources said the panel could not even firm up recommendations for its meeting with Prime Minister Yousaf Raza Gilani today (Thursday).

The panel’s inability to come up with “out-of-the-box solutions to the crisis” gives weight to widespread rumours echoing in the corridors of power since the constitution of the committee that it will be naive to expect a tangible solution from an internally divided group. The media has reported internal differences between Water and Power Minister Naveed Qamar and Finance Minister Dr Abdul Hafeez Shaikh.

The prime minister had constituted the committee after receiving a number of complaints about the conduct of the water and power ministry. Qamar was not willing to sit under Shaikh on this particular issue and saw the move as an attempt to keep him under check.

Shaikh heads the panel with Naveed Qamar, Petroleum Minister Dr Asim Hussain, Planning Commission Deputy Chairman Dr Nadeemul Haque and State Bank Acting Governor Dr Yaseen Anwar as members.

“Nothing is final as yet and the committee will have a couple of more meetings to prepare a final set of recommendations,” said Finance Minister Dr Abdul Hafeez Shaikh in a terse comment.

Sources said the committee discussed the option of injecting Rs240 billion into the system to retire outstanding subsidies in two equal tranches. However, this proposal could not be firmed up after Finance Secretary Dr Waqar Masood highlighted implications of such a big amount on the budget.

His stance was close to the position taken by the finance ministry, which had been pressing the government to initiate reforms before giving any such amount, as despite releasing Rs900 billion in subsidies over the past three years the power sector had not been able to stand on its feet.

A participant of the meeting said the finance ministry may ultimately have to release the amount, because of the premier’s direction to give Rs25 billion up to September 15 and fears that a delay in payments would completely choke the system.

Sources said the panel would apprise the premier of “working progress” and present an interim report. The thrust of the interim report is that the government should initiate meaningful reforms without compromising on political grounds, increase power tariffs, control line losses, improve bill collection and empower the power sector regulator – the National Electric Power Regulatory Authority (Nepra).

The government has so many times taken up these recommendations, forwarded by its own policymakers, international lending agencies and energy experts. However, it has failed to fully implement these.

“Nepra has to learn how to behave like a regulator,” said one of the participants. He said if there were no progress in improving bill collection and tackling line losses, it would also be the fault of the regulator that remained scot-free in the past.

Nepra apprised the committee about power consumers. According to its numbers, 47 per cent electricity is consumed by domestic consumers, 27 per cent by industrial consumers, 16 per cent by agriculture consumers and 7 per cent by commercial users.

Published in The Express Tribune, September 8th,  2011.

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Reader Comments (1)

  • Meekal Ahmed
    Sep 8, 2011 - 8:21PM

    The inability of this committee to chart out a credible plan of action is actually a little frightening.


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