DECISIONS made in the dead of night seldom speak of clean intentions.
In the short interlude when the country was without a prime minister, a series of appointments have been made in key posts in the power sector that require approval from the highest executive office. We are therefore left a little puzzled as to what these appointments mean.
The appointments include chief executive officers of at least three large distribution companies. Dead-of-night postings included the renewal of Sarfaraz Sial as CEO of Lahore Electric Supply Company, of Tariq Sadozai as CEO of Peshawar Electric Supply Company, serving all of Khyber Pakhtunkhwa and Mir Moosa Bahar as CEO of Sukkur Electric Power Company, serving Sukkur and upper Sindh.
In addition, to these postings, a spat developed between now former MD Pakistan Electric Power Company, one Rasul Khan Mehsud, and the newly inducted minister of water and power, the other Chaudhry of Gujrat, Ahmed Mukhtar.
The newly minted minister sacked the MD as his first exercise of ministerial powers, but the MD refused to relinquish his powers, until Tuesday’s cabinet meeting forced his hand.
Who exactly made these appointments is not known. Were the boards of these utilities part of the decision? In the case of Lesco, for instance, the board approved the posting after it had already been notified by the ministry and I strongly suspect they did so only to keep things amicable and not push a confrontation, since Mr Sial has reached the age of superannuation and has retired from service and only continues to serve in his position due to an extension granted, fittingly enough, in the dead of night.
All the reports in the papers about these developments are quick to point out the politics that lurk just beneath the surface. Regarding Mr Sadozai’s appointment, for instance, Dawn adds that it was made “…reportedly on the recommendation of JUI-F chief Maulana Fazlur Rehman…” and goes on to mention that the appointment was made on the same day as the new prime minister was elected.
Regarding the appointment of Mr Bahar in Sukkur, the report says it was “on the desire of a minister from Sindh” quoting a source in the water and power ministry. Mr Mehsud, the MD of Pepco, and Mr Durrani, the Chairman of Wapda, are both said to have “strong political backing of the Khyber Pakhtunkhwa government”.
Did the government try to buy the good maulana’s vote for their PM candidate in exchange for putting the maulana’s own man in charge of the distribution company that serves all of Khyber Pakhtunwa? If so, then you can get some idea of how important the post of CEO of a major power distribution company really is.
The power bureaucracy is the country’s biggest and oldest white elephant. In terms of the number of people it employs it is the largest single public-sector bureaucracy there is. In terms of the clout that its senior officers wield it is possibly the most powerful section of the civilian government after the police. There is little surprise that almost every appointment in its Byzantine offices is permeated with politics.
A superintending engineer of one circle can — if he knows how to play his cards right and if he can command the loyalty of his line men and bill collectors and executive engineers and operations and ‘customer services’ minions (and many can do all this) — make or break the fortunes of many an aspiring MPA and MNA.
For some perspective, look at how much the DISCOs (distribution companies) spend under what they call ‘provision for bad debts’, which are basically uncollected bills that are converted into loans and then written off. For Sepco, in fiscal year ended 2011 the amount under this head was Rs2.1bn, on total sales volume of less than Rs6bn.
For Pesco, the projected amount for the same period was Rs1.9bn. These are huge numbers, and the number of people that these figures entitle to free electricity must be very large. By Nepra (National Electric Power Regulatory Authority) rules, this must be less than two per cent of total sales.
I suppose it’s natural to expect some level of politicisation in the matter of allocating scarce electricity, but the symbiosis that exists between the political elites of this country and the power bureaucracy is an important obstacle to addressing the power crisis.
I’m becoming more and more convinced that far more than a technical or fiscal problem, the power crisis engulfing our country in fact grows out of this symbiotic relationship between the power bureaucracy and the political elites.
There was a time back in the 1990s when a similar state of affairs existed in the country’s financial sector, dominated by the big banks.
Many of us remember what it was like to go to the branch of a public-sector bank and try to get the simplest task performed. But more than that, the politicised allocation of credit coupled with the supreme power of the labour unions in these organisations, bestowed upon them a similar power and symbiotic relationship with political rulers.
Many of today’s fortunes have their beginnings in a ‘soft loan’ availed from a public bank during those years.
It was only in the second Nawaz Sharif government that the hammer came down hard on both these bureaucracies — the army was sent into Wapda and the banks were handed over to powerful boards and independent CEOs. The power bureaucracy survived, but the banks are now in private hands.
It’s high time to learn from this history. It’s high time to repeat for the power sector what was successfully done with the public-sector banks: hand the power companies over to strong and independent boards, empower them to appoint CEOs of their own choice, and give these CEOs hiring and firing power. Then kick back and watch the fun.
*The writer is a Karachi-based journalist covering business and economic policy.
By Khurram Husain*
28 June 2012