Panel discussion: Working out sustainable solutions to the energy crisis

Speakers call for improving perceptions about Pakistan to attract investment in energy sector.


News Desk December 20, 2012



Though factors impeding investment in Pakistan’s energy sector are numerous, it is imperative that perceptions about the country are changed in order to attract investment in the sector.


This was the gist of a panel discussion on “Enabling Energy Investment in Pakistan” held at the Institute of Policy Studies in Islamabad on Wednesday. Foreign investors, government officials, lawyers and professionals from the energy sector took part in the discussion, trying to work out solutions to the energy crisis.

Among the panellists were Abdul Rahim, former member National Electric Power Regulatory Authority (NEPRA); Naveed Ismail, the chief executive officer of Genco Holding Company; Muhammad Arif, president of Petroleum Lawyers Association and Zaigham Rizvi, consultant at World Bank. Mirza Hamid Hassan, chairman IPS Steering Committee on Energy presided over the session.

Underlining the significance of energy supply, participants noted that the Supreme Court in its landmark judgment on Rental Power Plants termed reliable energy supply as one of the fundamental rights of the citizens. However, they maintained that excluding Karachi, all cities across the country are functioning on just over 8,500 megawatts of electricity per day.

They maintained that energy policies, like other national policies, are driven by short-term political interests and change in policies of the previous government is “almost mandatory” for every incumbent government, without taking into consideration the strengths and weaknesses of the previous policy.  To further aggravate the problems, even these faulty and inappropriate policies are not put into practice.

The participants observed that widespread corruption, absence of fair practices and bureaucratic obscurities are playing a “visible role” in expelling existing investment companies from the country and keeping prospective investors at bay.

They quoted various examples during the course of discussion, wherein foreign investors were aggrieved by decisions that were politically motivated, but they had no forum where they could raise their grievances. They also observed that foreign investors who bring jobs and prosperity and are highly valued in other countries are met with scepticism by policy and opinion makers, who accused them of fleecing money out of the country.

Foreign

Participants highlighted that laws and institutional framework too seem lacking, adding that laws that were enacted before partition are still in place with minor adjustments.

The recent 18th Constitutional Amendment has made things more ambiguous and the difference of interpretations by the federal and provincial governments has hampered the oil and gas exploration activity for months and no move has been made to bring clarity to the policy, they said. Risk perception for investments is not assessed from the point of view of an investor and policies are not adapted accordingly, they added.

Moving towards the solutions, participants suggested that the government should craft its national energy policy with consultation and contributions of all stakeholders. The security situation and perception about the country has to be improved and corruption has to be checked, they said. Moreover, national energy objectives have to be spelled out clearly and objectively and short-term, medium-term and long-term strategies have to be chalked out.

Participants also suggested that utility management services, including those for energy, should not have much government interference. The government should act only as a fair judge between producers, distributors and consumers of energy, they said.

They also maintained that while hydro and nuclear energies are seen as the long-term solutions for domestic energy needs, investors should be encouraged to take up coal-based energy production, which offers a viable medium-term solution to the energy crisis.

Published in The Express Tribune, December 20th, 2012.

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