Islamabad: Bad governance, mismanagement, inapt decision makers and incompetent workforce hired against merit in the power sector were the main reasons for the declining state of affairs in electricity sector in the country.
Speakers at a round-table on ‘Power Sector Reforms: Current Situation, Future Outlook and Road to Sustainability’ organized at Institute of Policy Studies, Islamabad, called for governance reforms at the generation as well as distribution side to improve efficiency of the power sector.
“The main issue is investment in the power sector as the investors are more worried about their returns if the governance issues are not resolved,” Abdul Rahim Khan, former member Nepra said, chairing the session.
The speakers also criticized the government over the RPP issue and said that mismanaged affairs by the government have scared the power sector investors away from the country.
“Giving permissions to the furnace oil based RPPs to operate under the RRP policy was itself a major flaw in the policy as any fastest oil based plant would take at least one and a half year to two years to start operations,” Mr Khan said, adding, “The fast track policy for the rental plants was suitable only for gas operated units.”
To improve the power sector he said, the government interference has to be reduced to a minimum and the electricity regulator Nepra should be made a more independent and autonomous agency.
“Unfortunately the respective governments have been using electricity as a political tool and not much has been done to eradicate the root causes of distortions in this sector,” he added.
Salahuddin Rifai, former General Manager National Transmission and Distribution Centre (NTDC) blamed the bureaucracy and the political agenda of successive regimes for mismanagement in power sector.
“In 1994 the average cost of installing one MW capacity is $1 million in Pakistan whereas it was around $300,000 in Bangladesh,” Mr Rafai said adding that corruption was difficult to prove in the country but things are visible, he added.
Referring to the USAID’s programme for improving the capacity of Wapda’s generation plants (GENCO) he said that the project needed a separate dollar account for each GENCO, which was approved in principle by the federal government, however despite the lapse of more than two years the central bank and the finance ministry has not given formal permission to open up the foreign currency accounts due to which the much needed aid has not been received.
It was highlighted that as a nation Pakistanis have spent around $4bn on the import of more than three million generators in the last four years and to add to the inflationary impact the cost of operating these generators was also very high due to increase in oil and gas prices.
He also informed that the total receivables of Pepco were estimated around Rs375bn.
Participating in the discussion Khalid Javed, founding managing director of PPRA said that as per his calculations around $30bn was needed to mitigate the current energy crisis.
DG-IPS Khalid Rahman said that generating $30 billion for revamping the whole system was not a large amount if local and foreign investors were involved and the trust deficit in the governance system especially in the power sector itself was removed.
“Without improving governance issue the structural problems cannot be resolved,” Mr Rahman concluded.
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