Reviewing: Looking back … since the future is too dark

Despite promises, energy sector remains in shambles.

KARACHI:

A year after the elections, the government is still struggling to curb the energy crisis. This is a problem which could have found an easy solution, if the government had set its targets and eradicated the governance crisis in the power sector. 

In a meeting attended by the prime minister of Pakistan, the issue of load-shedding was discussed. This meeting was attended by a number of prominent ministers, civil servants and managers. Such meetings are a norm now and are supplemented by constant interventions of the minister of state for water and power.

These discussions, however, fail to change the dire state of the country’s energy sector. Load-shedding is on the rise, line losses are estimated to be hovering around 30% – perhaps the highest in the world.

Circular debt has resurfaced and arrangements are being made to fund IPPs. Public outrage is on the rise and to pacify protests the government has diverted gas supply from fertiliser plants and CNG outlets to power plants.

The collective indulgence of the premier, ministers, advisers and special assistants in attempting to do the micro management of the energy sector is a testimony to the fact that the power sector administration and governance structure has collapsed.

The prime reason behind the failing structure of the energy sector is a lack of governance and the government has failed to recognise this.

Currently, public sector organisations run without any proper leadership. Under the governance   of civil service officers who have largely failed to manage the energy sector.

Upon assuming power, the government took the much publicised initiative of seeking talent through open competition. Much work was done, but eventually all efforts turned futile.

A short-term solution to the problem would have been that line losses and the depleted capacity of the existing power plants be restored on a fast-track basis. Additionally, an aggressive policy should be pursued for the rapid construction of the planned power plants. Through this, at least 2,000 MW could be added on the grid.

The sustainable turnaround of the power sector demands massive re-organisation of the public enterprises.

The government has a strong will to resolve the energy crisis and is concerned about the political consequences. However, they appear to be at loss on how to solve their current predicament.

The issue is not what needs to be done; the issue is how to do it. The government does not possess a well structured plan and is struggling to cope with this pressure.

The lead role and responsibility to resolve the energy crisis appears to have been taken over by a team of ministers while the professionals are tied down. The energy management responsibility must shift from public leaders to professionals.

One single factor that contributed in the revolution of KESC (now K-Electric) is the early recognition of the importance of human resource and the influx of modern technology. The professionals implemented the road map set by the investors and, as a result, load-shedding riots in Karachi have reached a minimum level.

The nation is suffering a productivity loss of over $14 billion per year on account of load-shedding. It is worth to invest in building the HR strength in public enterprises and enforce technology in order to increase the power productivity of the country.

Even if the government is considering privatising the power sector– which is highly desirable –these investments will substantially enhance the net-worth of the utility companies. The biggest mistake is made when the government stops to invest in the sectors it intends to privatise.

The writer is a Resident Director at EMR Energy Management Resource Group and  former Country President Asea Brown Boverie

Published in The Express Tribune, May 19^th, 2014.

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