Boston, MA -- (ReleaseWire) -- 03/05/2014 -- Since the release of the Pakistani government's new five-year energy plan on July 21 2013, small improvements in the sector have been made. The government succeeded in reviving progress on projects such as the Nandipur power project, which could signal some marginal easing in the country's persistent power shortages. That said, the government's decision to subsidise the tariff rate hikes put in place by the National Power Electric Regulatory Authority (NEPRA) suggests that improvements will remain limited (given the ever-growing financial burdens) until the government finds sufficient political will to make its energy policy sustainable.
Although the new government promised to usher in changes to the current myriad of problems, progress, while present, has been slow like its predecessors. Corruption and complicated bureaucracy continue to hamper the business environment, discouraging foreign investment, while provincial and federal governments seem to be losing the fight against the 'entitlement' mindset that many citizens have, which often leads to unpaid bills and electricity theft. Even with the government's plan to privatise, either partially all fully, 31 state enterprises we believe this will only provide a temporary relief to the ongoing problem of circular debt that continues to cripple the country. We maintain that the government must push to end power subsidies and raise taxes to put the country and sector back on the path of growth. Otherwise, we expect current improvements to fade away, as the financial burden of the sector will ultimately cripple the government.
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Even though the government has shown much determination in its latest five-year energy policy, improvements have yet to trickle down to improve the power situation. Load-shedding across the country remains high. The weak power sector continues to arrest the country's economic development, as power outages weigh on productivity while transmission losses and electricity theft often result in more expensive electricity for businesses.
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