If the government had any doubts about the policies, especially using electricity tariffs to raise revenues, that the IMF sets such great store by, the 2023 State of Industry Report by the National Electricity and Power Regulatory Authority, makes for salutary and corrective reading. It has also asked the government to end cross-subsidies within the tariff, as well as the practice of revenue-based loadshedding. The latter, the report points out, penalizes the honest consumers in that area for no fault of theirs.. It does seems a return to colonial-era collective punishment, at a time when it was been ended by the abolition of the Frontier Crimes Regulations after the merger of the Federally Administered Tribal Areas into KP.
Perhaps most significant has been the finding that the tariff included supplementary elements like taxes, duties, fees and surcharges which substantially inflated the amount due, even though these were not integral to the core electricity charges. The federal government seems to have been caught out in a bit of laziness, for after some tentative steps, with electricity bills as well as with deducting income taxes on the basis of consumption, the floodgates seem to have opened, with electricity bills, which have to be paid, being seen as a convenient way of forcing consumers to shell out taxes. The IMF revenue targets have to be met, and this is the mechanism being used.
Perhaps the most interesting idea to come from the report is that of further breaking down the distribution supply companies, or DISCOs. At present there are 12 DISCOs in the WAPDA system, but only one, K-Electric, has been privatized. The others are up for sale, but seem to be getting no takers. The NEPRA Report seems to suggest breaking up these DISCOs even further, and to allow them to have separate tariffs. At present, there is a tariff differential subsidy within the tariff, because the government insists on having one tariff for all DISCOs. Ending this would not only mean that inefficient companies would no longer be subsidized by the efficient, but the path of privatization would be reopened. The report has come too soon before the February 9 election to let the caretakers take any action on it, but the incoming government should use it as a reference point for future action in an area where the proverbial ‘masterly inactivity’ simply will not do.
