2 The Silences of Development Discourse in Pakistani Power Planning, 1955-‐2011 25
2.3 A Fixed Repertoire of Actions 42
2.3.4 Structural Change 60
Power sector reform initiatives have introduced several major structural changes in an attempt to change the processes and outcomes of the power sector. These initiatives have typically been backed by international donors and multilateral lenders, with – at best –
mixed success. In this section I will examine the National Electric Power Regulatory
Authority (NEPRA) established in 1997, and the recent initiatives to create an autonomous Central Power Purchasing Authority.
NEPRA, like any regulatory authority, can only fulfill its role with the right staff with relevant expertise. The NEPRA Act of 199737 states that the chairman “shall be an eminent professional of known integrity and competence with at least twenty years of related experience in law, business, engineering, finance, accounting, economics, or the electric utility business.” To recruit such a person when the post was last vacated in September 2007, NEPRA placed an advertisement in Pakistani newspapers for which it received 72 applications to the post of chairman by October 20 2007. 38 A shortlist of 17 applicants was interviewed by a committee headed by the secretary of the Cabinet division, and the committee sent its recommendation to caretaker Prime Minister Soomro39 for approval on
January 18 2008. The committee’s recommendations were returned without decision on February 14th. The next day – three days before parliamentary elections which would lead to a new Prime Minister being installed – the caretaker Prime Minister appointed his
Principal Secretary Khalid Saeed to the post of NEPRA Chairman, but also had him retain his then post of Principal Secretary to the Prime Minister. Saeed had not applied for the
position of NEPRA Chairman and cannot be considered to have 20 years of related
37 An Act to provide for the regulation of generation, transmission and distribution of electric power. The
Gazette of Pakistan, Extraordinary. December 16 1997.
38 “Khalid Saeed retained as Nepra Chairman,” Aaj News, January 7 2009
Available at: http://www.aaj.tv/2009/01/khalid-‐saeed-‐retained-‐as-‐nepra-‐chairman/
39 Parliament had been dissolved prior to the 2008 elections originally scheduled for January 8 2008, but
delayed to February 18 2008 due to the assassination of Benazir Bhutto.
experience. On February 26th 2008, the Pakistan Senate passed a near-‐unanimous
resolution against Saeed’s appointment, noting his lack of qualifications, occupation of two government posts simultaneously (which is unconstitutional), and describing the process as “against accepted norms.”40 Saeed resigned from his post as Principal Secretary to the Prime Minister some four hours before the senate resolution against him was moved, but retained his new post as NEPRA Chairman.41 Despite the senate resolution, a petition before the Lahore High Court challenging his appointment,42 and reaching retirement age, Khalid Saeed stayed in his post as Chairman NEPRA. Moreover, an amendment to the NEPRA act on August 12 2011 added “and public administration” to the list of fields in which NEPRA chairmen can have had their requisite 20 years of experience. Not only was the
appointment process circumvented to appoint an unqualified candidate in 2008, but now administrators with no relevant experience can legally head NEPRA. The post of NEPRA chairman is now primed as a ripe cherry for retiring bureaucrats wanting to stay on the government payroll beyond their retirement. The lesson is not just that the newly formed regulatory agency was subverted by existing power structures, but also that media
attention, a senate resolution, and continued involvement by international donors in electricity reform could not stop it from happening.
40 “Senate resolve against appointment of Khalid Saeed as Chairman NEPRA,” Associated Press of Pakistan,
February 26 2008.
Available at: http://app.com.pk/en_/index.php?option=com_content&task=view&id=29955
41“PS to Soomro quits as Senate passes resolution,” The News, February 27 2008.
42 “Appointment of Nepra chief challenged in LHC,” OnePakistan News, 11 February 2010
Available at: http://www.onepakistan.com/news/national/32834-‐Appointment-‐Nepra-‐chief-‐challenged-‐ LHC.html
The pattern of ineffective reform through structural change is present in the
proposed separation and operational autonomy of the Central Power Purchasing Authority from the National Transmission Dispatch Company in the Power Sector Reform Program. The Central Power Purchasing Authority represents a crucial link in the finances of the power sector because it is the aggregation point for most of the Rs. 700 billion ($9 billion) which flows through the power sector.43 The distribution companies buy power through the Central Power Purchasing Authority, which manages all payments to the private and public sector power producers.
The establishment of an independent Central Power Purchasing Authority is viewed by the Asian Development Bank as a step towards competitive market conditions in the Pakistani power sector. The Asian Development Bank provided a $950,000 loan for technical assistance (i.e. advisory services, mostly from international consultants) to the Ministry of Water and Power for the Establishment and Commencement of Operations for the Central Power Purchasing Agency (Asian Development Bank 2009) in order “to achieve
transparency, market focus and private sector investments.” The technical assistance was deemed “partly successful,” and in describing the outcome the completion report observes that:
“While the consultants submitted the deliverables within agreed time frames, the weak capacity of [the Ministry of Water and Power] and political will of the [the Ministry of Water and Power] stalled the full establishment and operations of the CPPA”
43 Payments to the 16 Independent Power producers inducted under the 1994 policy do not go through the
Central Power Purchasing Authority and are handled by a specialized unit of the Water and Power Development Authority called the WAPDA Private Power Organization.
This assessment reveals three powerful shortcomings of the loan and the thinking behind it. First, the paper output of such a project – no matter the expertise behind it – is of little to no use on its own. Second, the use of the term political will, and the project’s distance from what the Ministry of Water and Power was willing and able to do, both call into question whether the project was ever appropriate. Third, the completion report notes the setback, but sees an “opportunity to further extend assistance to strengthen regulatory arm of the sector.” The Asian Development Bank is willing to send more money after bad in providing further technical assistance and would continue to offer technical assistance without engaging with the absence of political will. Unless political will is considered in anticipation of a project’s problems the concept is reduced to a deus ex machina.
The outlook for the Central Power Purchasing Agency is very poor. With the help of USAID contractors, the Ministry of Water and Power advertised the post of Managing Director of the Central Power Purchasing Authority in the Dawn newspaper in 2010 and prepared a shortlist of candidates. The main qualifications were experience with large commercial contracts and private sector finance experience. The final selection from the shortlist is to be made by a Cabinet committee with whom the decision has been pending since mid-‐2011. In the meantime, the Minister of Water and Power directed the
appointment of an acting Managing Director who was the former CEO of the Hyderabad distribution company serving the Minister’s home province of Sindh. All transparency and due process in the appointment has been bypassed in this appointment to a crucial position whose function is to ensure transparency in the handling of billions of dollars. International
donors and multilateral lenders carefully designing this institutional reform have failed to out-‐maneuver the local actors.