Summer is not an easy time in this part of the world. Sweltering heat doesn’t make it any easier for the people, and then there is power shortage. One can write pages and pages over the issue and still it won’t be enough to justify either the people’s anguish and dismay or the incompetence of the government in tackling a problem that has lingered on for over six years now, crippling industry, business and pretty much every aspect of our national life. Now things seem to have taken a new turn, that too for the worse, with country’s premier oil supply organisation’s creditworthiness being questioned.

The Deutsche Bank has written a letter to PSO over a default on an L/C, implying that the latter is losing its credibility in the financial market. That means unless payments are made promptly, the PSO might not be in a position to secure oil supply from international markets. The problem that has assumed gigantic proportions now is really an accumulated effect of various failed management policies in the field. With PSO not being able to provide fuel supply to power stations, power shortage would go nowhere but up. The main cause for this issue is an ever growing monster of circular debt. Then there are line losses, power thefts due to mismanagement, non-payment of charges by most FATA consumers, failure on the part of government departments and establishments to pay charges and subsidies on electricity. The fact that we usually have a big government, bureaucracy, armed services and other VIP areas that get totally free or highly discounted electricity, doesn’t help matters either. In other words, problems at both the generation and distribution sides have grown out of hand and need immediate solution.

The first thing to do is to ensure a proper coordination between the ministries of finance and water and power so that funds can be issued to PSO to import fuel. With Pakistan Electric Power Company, the intermediary that serves as a middleman between the power generation and power distribution companies, paying only 13 percent of what it owes, and the rest being paid by the finance minister, this coordination becomes even more important. Then there is the need to solve more complex issues of mismanagement in recovery of outstanding dues to various categories of consumers, and finding ways to enhance power generation capacity, considering that the peak of summer is still two months away, every megawatt of power generated would be needed, or else the government should prepare itself to brave a wave of angry and violent protests. The bright side is that the caretaker government has recently appointed an advisor finance, who is considered to be a competent economist, and one could expect him to take immediate action before things take a turn and plunge the country into darkness.

- See more at: http://www.pakistantoday.com.pk/2013....WZMM5woO.dpuf