Tackling energy governance

It has been no secret that at the root of most problems in the state machinery of Pakistan is a redundant and inefficient governance system. The problem is especially true in the case of the energy sector where a disjointed government structure hosts competing objectives. This leads to duplication of similar interests and a shameful waste of resources. 

All the years of crippling energy shortages point out that it really does not matter how many mega-watts are added to the system, or even if the transmission network is overhauled in its entirety. The crux of the matter is that unless governance is tackled, circular debt will never disappear. Neither will there be any sustainable economic and financial viability of the power sector in the long run. 

How can there be when there are more than 20 departments responsible for energy governance? All of them have duplicity of objectives which are reflected in the Terms of Reference (ToRs). More often than not, there are two departments working on the same job separately at the provincial and federal levels. Inter-ministerial co-ordination is non-existent in many cases with decisions taken from a narrow lens without the required input from the relevant stakeholders. 

Even though at the time of previous elections there was unanimous support amongst political parties for a unified Ministry of Energy, the present government remembered it at the time when its PM was disqualified and its term almost over. But still better late than never! 

The creation of the new Ministry of Energy by PM Khaqan Abbasi aims to “remove firewalls between the petroleum and power sectors”. But this is only the first step in trying to fix the mess that is the energy sector. 

According to Dr Viqar Ahmed at the Sustainable Development Poilcy Institute, all those departments whose objectives are now obsolete should be merged or disbanded. He also believes that the regulators, OGRA and NEPRA should be merged. This consolidation and elimination of redundant departments will allow not only transaction costs to come down but also improve regulatory efficiency. 

The roadmap should also include improving the coordination between the federal and provincial energy departments. Mr. Viqar notes that the draft report of the team working on Civil service reforms maintains it is difficult for non-technical persons to run such a large energy sector. Therefore if the government is intent on managing the sector in the long run a technical cadre of energy management should be introduced in the civil service. 

Ideally though government intervention should be brought to a minimum but that is not on the horizon yet. There have been no efforts to privatise the DISCOs while the government’s footprint on the generation side is getting increasingly large. One can only hope that with the advent of the new MoE, the recommendations highlighted above are also given due and urgent consideration. 

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