The Power Sector has failed the country since more than the last two decades. It all started with the mantra that WAPDA, as an integrated power utility, had failed and that only some new scheme could improve things.
Along, came the World Bank to rescue and then gave the country both the IPPs and the PSCEs (DISCOs, NTDC and the GENCOs) as a gift. Both, unfortunately, have been the proverbial Trojan horses and now the emerging Power Sector has become an existential threat for the country. Unfortunately, all promises by successive governments to effect correction have come to a naught.
The present architecture of the Power Sector is very simple. WAPDA is out with it looking after its water wing and plans to harness the water ways.
The Ministry of Energy (MoE) through its Power Division and a lack lustre policy holds the reins of the sector. Power regulator NEPRA hopes to regulate, but remains subservient to many constraints.
The wayward DISCOs with their non-professional Board of Directors (BODs) have all joined to short-change the poor Pakistani customers. None in-coming government has ever thought of correcting the situation or changing the present architecture.
However, the main issue has been the totally un-suitable Board of Directors that are basically running the show and not just the show, but assuring that everything goes down the drain.
The Securities and Exchange Commission of Pakistan (SECP) has authored reams upon reams of instructions as to how the Boards have to be formulated. Unfortunately, all of these remain away from the powers that be– specifically the MoE, and each time a new Board is formulated it breaks all earlier records and we end up with even weaker dispensations. With each change of the Boards, the working of the DISCO immediately goes down.
At present, the situation has reached its nadir – nothing can go wrong beyond this level. So much is the rot that now BODs all of the DISCO are fully staffed by mid-level politicos having no nexus with or knowledge about the sector. The one or two professionals on the boards do not change anything.
Either they acquiesce or are brow beaten to submit to will of the majority. The question that begs an answer is, as to why the clear-cut requirements of nominating the Boards – specially, for highly technical/engineering-oriented entities like the DISCOs/NTDC and the GENCOs, are ignored by the same governments that promise to correct the misgovernance. The other issue is as to why such shenanigans are allowed to continue.
Going into the details, it has to be understood that basically now the BODs are the WAPDA of yore and the CEO of a DISCO is in-charge of everything else. In other words, in case the BODs are below par then the DISCO becomes directionless and if the Boards are political in essence, then the situation aggravates as is the situation at the moment. In fact, any political – specially non-professional ingress – is poison for the DISCO.
Furthermore, this onslaught pushes the professionals to the wall as the political content is more interested in using the political economy of the DISCOs than any effort to assure discipline in operations and specifically to assure 100% recovery or any banishment of the culture of theft and illegal abstraction of electricity –which is rife at the moment.
Proof lies in the opposition by the politicos to the most recent federal government’s push to stem theft and stealing in the DISCOs through mass transfers of officers and staff accused of being either lacklustre or in connivance with the negative elements.
SECP, in its earlier notifications, requires full consideration of the requirements while finalizing the Boards. The same in detail as gazetted by the GoP vide registration No. M-302/L-7646 dated February 02, 2023, further avers as under regarding the criteria for the Directors is:
has the skills, knowledge and experience to assist the state-owned enterprise achieve its primary and other objectives;
is a businessman of repute or a recognized professional with relevant sectoral experience;
is not disqualified to act as a director stipulated in this Act or any other law applicable to the functioning of a state-owned enterprise;
does not suffer from a conflict of interest; this includes political office holders whether or not in a legislative role.
The SECP categorically restricts the selection of the independent Directors of the Board to professionals alone and automatically it is understood that these would be the relevant or sectoral professionals. Consequently, nomination of someone not understanding this requirement has to be a mindless one and surely on account of non-understanding as to what professionalism means or stands for. One thing is for sure that in all probability the gentlemen responsible for such nominations are at a loss to comprehend the requirements.
The least could be their bowing to outside pressure to nominate wrong persons, etc. Further explaining the issue, the question is as to why the Boards do not conform to the strict and clear-cut prerequisites. It could only be because of blatant disregard of the law by whoever is tasked or empowered to select the Boards or it could also be the incompetence around us.
This is all the more so because all governments profess merit as the driving force for their decisions and also proclaim that they would soon correct everything and then nothing happens.
Another serious issue is that even analysts, academics, trade bodies, the chambers and the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) – all remain mum and mute while accepting the above nominations.
Herein the concept of the Power Sector Advisory Council (PSAC) comes in. This council has to be set up on the immediate basis with the top experts being the necessary part.
The basic principles have to be formulated by it where after the MoE can take up the implementation thereof. The Power Policy – less of a policy and more of the “save DISCOs scheme”, too has to be redone with help from the PSAC at the earliest.
However, all of the existing BoDs need to be immediately disbanded and formed again while keeping the clear-cut requirements in view. This probably, is the only way the Power Sector could start operating.
Copyright Business Recorder, 2023
Comments
Comments are closed.