Focus: Privatisation of electricity is against the public interest

Abstract

INTERNATIONAL union rights Page 13 Volume 22 Issue 2 2015 Privatisation of electricity is against the public interest T he present Government of Pakistan has announced plans to privatise 37 public enterprises at the behest of the World Bank, including Electricity, Railways, Port Trusts, Civil Aviation, Oil and Gas, PIA, National Bank and other public enterprises. The working class of Pakistan has been making a concerted struggle by holding protest rallies and marches to impress upon the present Government the need for Social Dialogue with the trade unions, since the workers are essential stakeholders, instead of going ahead with a privatisation of public utilities while unilaterally ignoring the public interest. The Electricity system in Pakistan is run by State owned companies - General, Transmission and Distribution – which provide electricity to more than 22 million industrial, agricultural, commercial, and domestic consumers all over the country. The trade union representatives of electricity workers, namely the All Pakistan Water and Power Development Authority (WAPDA) Hydro Electric Workers’ Union, which has more than 140,000 members across Generation, Transmission, and Distribution, as well as Water Dams, have been urging the Government to accept that the proposed privatisation would be against the public interest since the privatisation of electricity in the Rawalpindi and Multan metropolitan areas and major cities failed miserably because those companies were not ready to provide electricity to consumer areas - even those in urban areas – that were not profitable to them. Therefore, the Federal Government had to take over those companies in the public interest, following the persistent demand of the general public. Reluctantly, the WAPDA public utility was able to supply electricity to all of the cities and also to more than half a million villages in the rural areas. The privatisation of Karachi Electricity Supply Company (KESC) has also failed miserably. The KESC, despite receiving electricity from the national grid of WAPDA, at a rate of 650 mw daily, at very cheap rates, has neither raised a generation of its own thermal power houses nor has it built any new power house to overcome load shedding – as was required under its agreement with the Government. The company has also been receiving a subsidy of millions of rupees from the Government every year. Despite receiving electricity at reduced rates from the national grid – and a subsidy from the Government – the company has not reduced the rate of electricity. The trade union representatives have been urging the Government that administrative reforms should be introduced in the electricity sector in order to overcome its mismanagement. But the Government has handed control of electricity from WAPDA to 15 companies, whose administration has been handed out to private members of the Board of Directors appointed on a political basis. There has not been any investment in these companies . These political appointees are responsible for the mismanagement. The trade unions have demanded that the Government should review this structure because it has not only raised mismanagement but has also raised administrative costs as the electricity system has been divided into 15 companies with huge numbers of officials whereas companies all over the world are being amalgamated and merged to reduce administrative costs. The experience of private independent power thermal generation has also proven to be a failure, because thermal power station are being run by furnace oil. The private thermal stations have raised the cost of electricity compared to thermal power stations in the public sector. The revenue of State owned distribution companies is being eaten away by these private thermal power houses and rental power houses. Had the Government invested in building new power stations in the public sector the high cost of electricity and load shedding would have been averted. The workers have also highlighted that cheaper electricity is a basic need for the development of national industries, agriculture and commerce. Therefore, the Government, instead of following the conditionalities of the World Bank and IMF, should place the matter before the national Parliament and the Senate of Pakistan to discuss all of the pros and cons in the public interest. All Pakistan WAPDA Hydro Electric Workers’ Union has been observing protest days and holding rallies all over the country. More than twenty thousand workers gathered...