Robbing the electricity consumers

Immediately after the democratically elected PPP government was formed, the electricity crisis surfaced in the country; gradually, it assumed an alarming dimension. Within three years, the crisis has blown up to the extent that our industry has almost crippled, domestic life has become miserable and people have resorted to rioting. It was after the riots in Faisalabad and Gujranwala that the government announced to end loadshedding. Despite this, electricity outages continue. Reportedly, according to experts, the crisis was initiated deliberately by vested interests in the PPP government to pave the way for Rental Power Projects (RPPs). There are allegations of large-scale financial mismanagement and corruption in the setting up of the projects. Since the cases are already in the apex court of Pakistan, they cannot be discussed here. Anyway, the government under the shadow of the crisis, real or fake, has been systematically increasing electricity tariffs. It is estimated that since the PPP government took office, electricity prices have gone up almost 200 percent. The last increase of more than Rs3 per unit was announced in October this year. The government cites financial losses and IMF conditions to justify these price hikes. More so, it has, unfortunately, not come up with feasible plans to offset electricity shortfalls, improve management of power production and distribution, and curb losses and reform billing procedures. Added to this, the Electricity Supply Companies (ESCs) have come up with a 'novel idea to increase revenues. They have started installing new 3-phase 4-wire whole current (TOD/TOU) static energy meters in residential areas. But it is not known, if they are being installed at commercial and industrial locations. These Chinese made computerised meters are programmed to record electricity consumption in two modes; from 6pm to 10pm, the electric consumption will be recorded at twice the rate i.e. for every one unit consumed, the meter will record two units, while consumption during the remaining 20 hours will be recorded at normal rate. It means that consumption during the four hours will be charged at double tariffs. Domestic electricity consumption is priced at a tier-based formula: The first 100 units are billed at Rs4.54 per unit; next 100 units cost Rs6.86 per unit; next 200 units at Rs10.65 per unit; and consumption beyond 400 units is charged at Rs13.29 per unit. These rates have been taken from the bills issued by the Islamabad Electric Supply Company (IESCO). In this context, the double recording of electricity consumption will put a consumer in high-tariff category, making him liable to pay more than what he actually owes to the power supplier. Worst, the change over of meters is taking place without any announcement by the Water and Power Development Authority (WAPDA) or any of its subsidiary ESCs. The extra revenue generated by these power supply organisations, considering the number of households using electricity in the country, will run into billions of rupees; how will they spend this colossal amount no one knows. There is a fear that this amount might be floundered in corrupt ways. However, it is not possible to initiate a scheme like this without taking the concerned Ministry into confidence. Also, it is strange that the PPP government did not find it appropriate to discuss the matter in Parliament, despite its claims of representing the poor masses of Pakistan. There is a dire need to take it to the highest forum for deliberation so that appropriate relief measures can be adopted for the masses. Historically speaking, when WAPDA was established in the Ayub era, there was a need for such an organisation. Ayub Khan, despite being a military dictator, had a nationalistic outlook and vision. He was the architect of the First Five-Year Development Plan. He had realised that development is a capital-intensive activity, but the country lacked the much needed financial resources for it. So, he established the Pakistan Industrial Development Corporation (PIDC) for industrial development; this institution established a number of industrial units with public funding that were later sold off to the private sector. Though some quarters allege that favouritism played a part in the sale of these units, but they are still operating profitably. Likewise, WAPDA was established as a result of the Indus Basin Waters Treaty (1960) with India. The treaty concluded under the World Bank required Pakistan to build water reservoirs and feeder canal network in the country. This work was of gigantic nature and needed colossal financial resources that the private sector could not muster, so the Authority was setup. It has, undoubtedly, done a marvellous job of building dams, canals and power generation plants. But along the way, it has grown into a highly politicised public sector organisation. Its size and strength has grown to almost an unmanageable level. Had this institution sold off its power generation activity to the private sector on the lines of the PIDC, the power crisis that we are facing today might have been averted. All over the capitalistic world, power generation and distribution is a private enterprise. In Pakistan, too, this activity was in the hands of the private sector before WAPDA came into existence the Rawalpindi Electric Supply Company was such an enterprise in the early 60s. It seems that WAPDA at that time could not stand competition and took over all private power generation facilities. But now the situation has changed altogether. The government ready to install the RPPs for power generation in the country; in addition, there are other private power generation facilities. This amply demonstrates that power generation is beyond WAPDAs capacity. Yet, the benefits of competition in the power sector do not reach the consumers because the Authority holds the monopoly over the distribution of electricity and also has the power to manipulate tariffs and control electricity supply at will. Being a public sector organisation, it falls under political pressures from the present government to intimidate political opponents; the Punjab government brings up such charges off and on. In the event of losses, the domestic, commercial and industrial consumers have no legal recourse available to them, since the it is a government organisation. Electricity generation and distribution should be privatised on regional basis. Pakistan should invite foreign power generation companies to establish power plants and set up distribution networks. They should be free to establish coal-fired, nuclear or hydroelectricity power stations, depending upon the resources available in the desired region. These companies should be allowed to price their product and bill their consumers according to market forces; this will generate competition that will benefit the consumers. The private power suppliers will not indulge in underhand activities to enhance their revenue; in case the consumers suffer a loss due to electricity failures or fluctuations, they will retain the right to take these companies to the court for the compensation of loss suffered. The political managers should seriously think in this direction. The Authority should shed its monopoly over the power sector; if it wants to retain the existing facilities, it should be allowed to enter the competitive electricity market. However, there is a possibility that the private power suppliers may not rob the consumers in an underhand fashion like the ESCs are doing by installing new meters that will log consumption at double rates. The writer is a retired brigadier and political analyst. Email: arjerral639@hotmail.com