By Engineer Musa Arshad
Despite possessing the sixth-largest nuclear arsenal globally, with approximately 160 warheads, Pakistan’s energy sector is plagued by inefficiencies that have far-reaching consequences. The country’s reliance on international aid to sustain its power sector is a stark contrast to its nuclear capabilities, which position Pakistan as a significant player on the international stage. The statistics are alarming: 40% of Pakistan’s population lives in poverty, largely due to the energy sector’s inefficiencies. Rather than addressing the root causes of these issues, stakeholders seem to be perpetuating the problems for personal financial gain. The prevailing approach of adding new power plants to the national grid, without ensuring transparency and accountability, is akin to pouring more water into a leaking bucket—a short-sighted solution that fails to address the underlying issues.
A lingering myth suggests that in the waning years of the Soviet Union, the Central Intelligence Agency (CIA) allegedly devised a plan to infiltrate and manipulate the USSR’s leadership structure. According to this narrative, the CIA aimed to install incompetent officials in key positions, thereby exacerbating the Soviet Union’s internal weaknesses and hastening its downfall.
While the veracity of this claim remains uncertain, one thing is clear: the Soviet Union’s sudden and catastrophic collapse on January 1, 1991, was, in part, attributable to the ineptitude of its highest-ranking officials. Despite boasting the largest landmass and an arsenal of tens of thousands of nuclear weapons, the Soviet Union’s sphere of influence crumbled, leaving in its wake a power vacuum and a legacy of instability.
Pakistan’s energy sector is plagued by a decades-long history of corruption and inefficiency, eerily reminiscent of the Soviet Union’s downfall. Over the past thirty years, officials and ministers have been appointed to key positions in the Planning Commission, Ministry of Power, Ministry of Petroleum, and regulatory bodies like OGRA and NEPRA, not based on merit, but through manipulation, maneuvering, and political bribery.
The consequences of this corruption are staggering. The energy sector is beset by circular debt, with no accountability in sight. The regulatory bodies, particularly OGRA and NEPRA, have been instrumental in creating this debt, which has crippled the power and oil & gas sectors. The lack of transparency and accountability has led to rampant corruption, with officials and politicians exploiting the system for personal gain.
Pakistan is not devoid of energy resources. The Thar coal reserves, estimated at 175 billion tons, remain largely untapped due to poor planning, mismanagement, and environmental concerns that are ignored elsewhere in the world. The Indus River system provides an incredible opportunity for hydroelectric power, yet bureaucratic inefficiency and corruption have prevented the construction of large-scale dams. Similarly, solar and wind energy projects remain stagnant due to red tape and a lack of incentives for engineers and entrepreneurs.
The real tragedy is not the absence of energy—it is the absence of foresight, planning, and investment in the right fields. Countries like China, India, and even Bangladesh have moved towards diverse energy solutions, while Pakistan continues to import expensive oil and struggle with outdated power plants that fail to meet modern energy demands.
In 2011, the US government established energy excellence centers at the National University of Sciences and Technology (NUST) and the Engineering University Peshawar. The primary objective of these centers was to serve as a think-tank for planning and capacity building of all energy-related institutions, including ministries and regulators. To achieve this goal, the US government invested in training faculty members at the University of Arizona.
However, after 14 years, these centers have failed to deliver on their promise. Despite the significant investment, they have not produced any practical policy briefs or a roadmap to revamp Pakistan’s energy sector. This lack of progress is a stark reminder of the challenges that hinder meaningful reform in the country.
The story of these energy excellence centers takes a darker turn when one considers the fate of their executive directors. Rather than fulfilling their mandate, these individuals exploited their positions for personal gain, accumulating wealth and becoming millionaires. This egregious abuse of power and resources is a tragic indictment of the systemic failures that plague Pakistan’s institutions.
The tale of Pakistan’s energy excellence centers serves as a cautionary example of how even well-intentioned initiatives can be derailed by incompetence and corruption. This story may be a valuable case study for global business schools, highlighting the importance of accountability, transparency, and effective governance in ensuring the success of development projects.
The government of Pakistan’s response to the executive directors’ actions is shocking. Despite their questionable track record, one of them was promoted to the prestigious position of Vice-Chancellor, while the other was appointed as a member of the Science and Technology sector at the Planning Commission. This raises serious concerns about the government’s priorities and its commitment to accountability and transparency.
The corruption in Pakistan’s energy sector is legendary. Political elites, bureaucrats, the NEPRA, CPPA, and the officials of the Ministry of Power made a nexus. This nexus is the main cause of corruption, but the role of the Planning Commission of Pakistan can be ignored. The imported coal power projects that made Pakistan a global begging bowl were the brainchild of the Planning Commission. Yet besides having numerous accountability institutions, one was punished or recovered the looted money.
The Case of LNG import and four LNG–fired power plants is becoming an economic burden but the NAB, initially arrested the culprits but failed to recover the looted money and all accused were freed from the courts, because of weak The cases framed deliberately by the NAB.
The worst role played by the national power regulator NEPRA. The regulator approved the Power plants are deliberately kept inefficient, forcing the government to import expensive energy and allowing middlemen to profit. Private power companies (IPPs) receive subsidies, but instead of investing in modern technology, they inflate bills, cut corners, and exploit the public. Corrupt contracts with foreign companies result in deliberate overpricing, meaning the common citizen pays more for electricity than in neighboring countries.
Through political maneuvering and monopolies, the NEPRA, OGRA and Ministries continue to exploit the energy crisis for profit, while the ordinary citizen suffers from load-shedding, price hikes, and stagnant economic growth.
Now for a couple of months, the GOP has been trying to renegotiate the power purchase agreements with IPPs that mostly already expired. Though PM regularly announces his success electricity consumers receive the bills almost at the same rate. Why is failure GOP, the team leader of the power sector reform again a person who was sacked by the supreme court of Pakistan from SSCP in the year 2013? In the power reform committee, the members are NPRA, CPPA, and officials of the Ministry of Power. The same actors who plunged Pakistan into the global begging bowl
For months, the GOP has been attempting to renegotiate power purchase agreements with Independent Power Producers (IPPs) that have largely expired. Despite the Prime Minister’s claims of success, electricity consumers haven’t seen significant changes in their bills. This raises questions about the GOP’s approach to power sector reform, particularly with a team leader who was previously sacked by the Supreme Court of Pakistan in 2013.
The power reform committee’s composition is also concerning, with members from NPRA, CPPA, and the Ministry of Power – the same entities that contributed to Pakistan’s energy crisis. Their involvement undermines the reform efforts, as they may prioritize their interests over the nation’s needs.
Renegotiating power purchase agreements is a step in the right direction, as seen in the government’s discussions with IPPs to reduce circular debt. However, the presence of the same actors NEPRA, CPPA, and officials of ministry Power will take another 100 years to reform this sector
Ensuring complete transparency in Pakistan’s energy sector is crucial for eliminating the “leaks” that benefit select stakeholders at the expense of the broader population. This can only be achieved by a true leader who is genuinely honest and committed to promoting accountability and transparency. This is possible only by replacing the corrupt mafia in the energy sector by transforming it into AI. I am on it. But who will decide only a leader with integrity can make a significant difference by Fostering a Culture of Transparency, which involves being open and honest about the organization’s activities and performance.
Engineer Musa Arshad is a contributing research fellow at CRSS
Writer can be contacted at musa.arshad.pakistan@gmail.com