Policies and plans are the outcomes of input process in any political system. Well-conceived public policies are the reflection of accurately assessed and articulated public demands. In recent times, energy policies have got primacy, and economic sufficiency has become synonymous to the energy sufficiency. Prevailing oil politics and subsequent strategic and political activity is the evidence of this very fact. As the growing industrialization has exhausted the energy resources, the competition for the availability of energy resources has become a valid point of global power politics.

The direction of energy policies in the developed and lesser-developed world is quite different.

The developed world is not only occupied with the creation of alternative energy base but also it is exerting for the reservation of conventional energy resources around the world while developing world is still struggling for the acquisition of workable and affordable energy mix. These nations can be called energy insecure nations. The position of their energy production reflects their economic growth and their position on Human Development Index. Gross National Income is the significant measuring unit of HDI. As far as GNI of Pakistan is concerned, it is going down significantly and not increasing as compared to its population and growing industrial demands. Apart from many other reasons the ongoing energy crisis can be presented as significant evidence of the very fact.

Energy sector cannot be revamped overnight. It needs proper assessment, vision, and strong planning. Unless a well thought out plan is put into execution on a suitable time, no benefit can be yielded. The decade of the 80s was such suitable time for Energy sector planning. At that time the construction of one mega water storage dam should have been initiated. A dam takes a considerable time for its feasibility, planning, and construction. World Bank had conducted a study in 1983 on the Kalabagh Dam project, and the panel was comprised of Mr. Pierre Londe (France), Dr. G. Lombardi (Switzerland), Dr. James l. Sherard, Mr. John Parmakian and Mr. John Lowe (USA) and Dr. Klaus W. John (Germany). These experts had consensus over the construction of mega storage dam for Pakistan. If there had been the same kind of agreement of the stakeholders, there would have been whole different energy scenario in Pakistan.

At that particular time, the Government offered a very feasible and favorable energy policy to the private sector. This was a policy turn from well-assessed hydropower to the thermal power generation by the private sector.

The government offered ‘Build, Own and Operate’, (famously called BOO), policy to the private sector for the energy generation. It was a public-private partnership (PPP) in the energy sector. There are various models of public-private partnerships, in the BOO model projects are made and run with the help of government, but they are not transferred to the government at any stage. In 1987 the GOP made this generous offer. The government established Private Sector Energy Fund, and USAID, World Bank, Governments of Italy, France and Nordic Investment Bank were called for funding. National Development Finance Corporation was established to monitor all financial matters on behalf of the government. All commercial securities were provided and guaranteed to the lenders. Private Power Cell was established to facilitate the entire process. HUBCO is the milestone of these policies.

Power policy of 1994 further enhanced these facilities and incentives. The investors were given Power Purchase Agreement, Fuel Supply Agreement, and a Bulk Power Tariff. These facilities were so lucrative that private investors took it as a golden investment opportunity. The policy, in future, proved to be a fatal trap that has affected the entire nation. The government took responsibility of the arrangement of fuel to these private sector power generation companies. The government, being the sole purchaser of their product, also guaranteed to purchase electricity at a fair price. These companies were permitted to consider their affordability while constructing their energy production units. Consequently, transmission and dispatch process from the production unit to the main power grid causes heavy losses to the government. Provision of long-distance transmission lines caused severe line losses too. Moreover, the government has taken on itself to balance the currency rates fluctuations. In 1995 Pakistani state offer private partnership in hydropower projects as well. New Bong Hydro Power Project is the only commissioned project in this regard. Before going further, it would be appropriate to deduce that these quick measures to cope with the rapidly emerging energy requirements turned out to be a massive liability for the government.

Power Policy of 2002 is the reflection of this very realization on the part of the state. All extraordinary incentives like Fuel Supply Agreement, liberty of site selection and upfront tariff, restrictions on fuel selection for the power generation and indexation of US CPI to equity were removed. Important to note is the fact that all these policies, in the decade of 90s, were devised through a democratic policy process under the provisions of the Constitution. While post-90s era has again seen the dictatorship oriented policy process where real public participation and consultation process is weak.

Under Prime Minister Mr. Shaukat Aziz, more privatization was preferred. It was decided to produce electricity by the source of crude oil imported from Saudi Arabia. Again, it was not a well-articulated and well-thought policy, which resulted in more dilapidated energy production scenario in the country. Unbundling of WAPDA was another drastic step taken by the same administration. Since 1958, WAPDA was the fulcrum of all energy production activities in the country. The decision of unbundling WAPDA was taken without devising equally effective alternatives. At a time when there was dire need of strong energy base for the industrial development, a well coherent and coordinated institution was disintegrated. The ill effects of this policy were felt severely when entire process of energy production, transmission and dispatch was disrupted. It created quite a chaotic situation, which dismantled the further growth of energy sector in the right direction.

Before the Energy Policy of 2010-13, a National Conference was called in Islamabad by PPP administration, where experts were called to discuss the energy issue and some workable solutions. This energy policy could not bear noticeable developments except government’s decision of nationalization of the energy sector, which could also not materialized. Until present, it is worth noticing that government is trying to establish micro power generation projects, which are not effectively coping up the growing social and economic needs.

Since the mid-80s till present, the energy department has remained short of one well thought out, long-term and workable energy policy. Such energy policy was needed that could reflect the resource index, environment and affordability factor collectively. Not only the energy resources are not yielded fully, but also there have been massive gaps on managerial front. On the political front, hydro-politics on both domestic and regional level is not tackled with vision and sagacity. If the suggestions of experts would have been taken under consideration and right policies would have been implemented on the right time, there would have been a changed energy scenario.


The Author is currently teaching at the University of Punjab.