- State must make sure its writ runs
Though it seemed that federal Planning Minister Asad Umar`s word had no meaning, as his firm commitment at the weekend, that there would be no more unscheduled loadshedding in Karachi, proved useless, as Tuesday saw more episodes in the country’s largest metropolis of the light going. However, the government must now realize that it may no longer be that simple to give orders to an entity that has been privatized. K-Electric is now in private hands, and thus not obedient any more to the federal government, but to its shareholders.
However, one of the effects of privatization of an electricity distribution company should not be that an entire area is held hostage. It does not do much for optics that the major shareholder of K-Electric, Abraaj Group, has significant debts to pay back that it incurred on other transactions and the group’s founder Arif Naqvi, who is in jail in the UK, and fighting extradition to the USA is considered not only a close friend of Prime Minister Imran Khan but, as alleged by the PPP, also bankrolled the PTI’s election campaign. That K-Electric is up for sale and the Shanghai Electric Company renewed its interest two weeks back in buying Abraaj Group’s shares also raises questions about the timing of the ongoing electricity crisis. The sanctity of private property is not supposed to prevent such a transaction, but the inability of the government to prevent loadshedding in areas where losses are being incurred indicates that the writ of the state does not cover utilities after they have been privatized. The K-Electric example is being watched closely by all those interested in buying other distribution companies, as it is being noted how far it is possible for the government to order around a private company.
The privatisation was supposed to allow the bringing of private-sector management efficiencies to commercial enterprises. The realization that what was being provided was a social good, seems missing. The social good, in the shape of K-Electric poles and distribution networks, have also been used by cable operators and Internet Service Providers that the former keeps disconnecting. The government has little or no control over either side, both being in the private sector, and can seemingly do little more than what it has done so far to help them resolve the issue, which is to do nothing but wring its hands impotently when it is not issuing peremptory orders all know will be ignored.