A plan for power

The government is finally willing to work on an action plan to solve the power crisis at the institutional level.

After delaying for several months – some would say decades – the government is finally willing to work on a credible action plan to solve the chronic power crisis at the institutional level. The plan being proposed involves at least some short-term pain for consumers in the form of significantly higher electricity bills. However, if it results in a more functional energy sector that is able to attract the requisite levels of investment and provide uninterrupted power, it may all be worth it. The plan was initiated largely because of a push by multilateral financial institutions such as the World Bank and international donors seem keen on forcing the government to finally do the right thing. There is the usual populist squeamishness about taking dictation from foreigners. We feel, however, that given the government’s inability to get itself to do what is necessary, a little push from abroad is not entirely out of line.

There are, however, legitimate concerns about the government’s implementation capabilities. Eliminating unsustainable subsidies is a fine idea so long as it is coupled with more effective bill collection, something the government has been an abject failure at to date. The result is that uncollected bills keep rocketing higher, forcing the few honest citizens to pay for the many thieves and crooks. And then, of course, there are those to whom no bills can be presented because they steal outright from the transmission lines. The government sorely lacks the ability to make people do what they must. The problem of thievery has plagued the power sector for ages. We would venture a guess that the time for politely knocking on doors and saying please and thank you has past. The government has, in theory, a monopoly on the use of force; it should utilise that capability to make people pay for what they use. Otherwise, no tariff hike will be enough to stop the bleeding of red ink in the power sector.

Published in The Express Tribune, October 10^th, 2010.