Early this month the Special Committee of the Cabinet on power matters received a detailed briefing from a team of auditors about their report on the issue of over-billing of electricity charges to the consumers. The committee is headed by Finance Minister Ishaq Dar and includes the Minister of Water & Power, Minister for Petroleum and others. The committee also reviewed implementation of cabinet decision regarding adjustment of excess billing.
The Prime Minister is reported to have rejected the interim audit on over-billing. The report of the audit has not been made public. It is understandably the Finance Ministry from where the issue of over-billing appears to have sprang from. The Finance Ministry is, of course, not the cause of it but being at the tail end has to face the consequences. MoF is checkmated by the unmanageable and uncontrollable circular debt and by IMF to decease the subsidy to the power sector through increase in tariffs. Somebody has to pay for the way out and as always it is the public. But this time the modus operandi attempted was different.
Over the last one year, the power tariffs have been increased many times and the government would have had no hesitation to once again increase the tariffs. But after the dharnas of PAT and PTI and its wider acceptance specially by the lower and middle class segment of the population, the business of government is no longer business as usual. Political dynamics have undergone a dramatic change. The government is on a back foot and as a consequence of which it considered increase of power tariff as a major political debacle.
Presumably, in their misguided wisdom the government considered that they would make good the difference through overbilling which by and large may go largely unnoticed. But they appear to be unaware of the reality, that, the people, specially at lower ranks, have no longer the capacity to pay even the actual bills leaving aside the inflated ones. This move of the govt backfired amid massive protests by the public. The issue was well picked up by the opposition and escalated at the ongoing jalsas being held from city to city. The govt opted to backtrack and announced an inquiry into over-billing with an assurance to make good the extra charged in subsequent bills.
The government is reported to be working to identify the causes of over-billing. If it is really a genuine effort then the government must in all sincerity make public and transparent the Term of Reference (TOR) for the said audit to identify the real causes.
Apparently, the main causes which compel the government to opt for over-billing is (1) To make good the payments required to be made to the IPP (2) To cover up the shortfalls on account of power theft and non-payment of bills by the public sector agencies and provinces (3) Consequential losses on account of nepotism, corruption and in-efficiency at all levels in the governance of power sector. All the answers for over-billing will be found if these three sectors are genuinely audited. The good citizens are basically being netted to pay for the others and the inefficiency of the system. This large segment of society therefore has the right to demand a transparent audit and facts made public.
To start with, the government must get audited the conduct of the Independent Power Producers (IPPs) with a focused TOR aimed to make transparent the fuel oil supply chain as its costs are paid by the govt as pass through, the power off-take from the IPPs on the national grid, the idle capacity paid by the government to the IPPs and similar key factors.
The conduct of the responsible government entities and functionaries must be audited to make transparent the reasons for the non-collection of revenue (receivables) which is over 40% of the total revenue. Why should the good citizens pay for the ones who do not pay?
The government must get audited the governance prevalent in the power sector. Many of the key power sector organisations are without a permanent Chief Executive since years. The government attempted to transfer the role of the professionals responsible to manage power sector to bureaucrats, advisor to the PM and the ministers. This rare combination of governance of the power sector with all great heads put together has not worked. It has been reported that Nargis Sethi former federal secretary water and power with all her skills has not been able to deliver and turn around the power sector. Her successor Younus Dagha has now been entrusted with the key responsibility to lead the power sector. The fate is expected to be no different.
Last Sunday, for the third time, since the present government came to govern, large advertisement have been once again been published in daily newspapers inviting application for the positions of the Managing Director/CEO of Power Sector entities including CEO for NTDC the backbone of the sector. The first advertisement was published as soon as this govt took over control and independent HR consults were hired to select the best professionals truly on merit, which took the consultants more than six months of hard work to complete the assignment and make categorical recommendations to the govt. However, as expected the government opted not to act upon the recommendations and the process of appointments on merit was aborted. In the process millions of taxpayers' money got wasted on advertisements and payments to HR consultants. The business as usual prevailed the consequence of which is apparent from the ground realities like massive loadshedding, circular debt, massive receivables, higher tariffs and now over-billing.
Somewhat similar process of appointments is being attempted once again, which is expected to take few months to conclude. By this time half of the tenure of the govt will be over. This time it is managed directly by the Ministry of Water & Power, Islamabad.
The government must realise that the present power tariffs are beyond the paying capacity of even the middle class segment of the population. Today electricity is the major cost for our industry and businesses. Lots of production and businesses are being closed due to high electricity costs.
Moreover, on top of unaffordable tariffs, with over-billing the public at large feels even more cheated and may be tempted to reciprocate and do likewise - a trend, which the government must prevent at all costs. By and large the people of Pakistan want to honestly pay their electricity bills. The government must take care of these responsible citizens and desist from burdening them to cover up for the deficiencies of the others and the deficiencies of the government itself. This will no longer work and will incur political consequences for the government in power.
(The writer is Chairman Avant Ventures and former President OICCI & ABB- Asea Brown Boverie)