Dawn Editorial 31 August 2019

Gas sector reforms

THE government has taken some bold decisions in the recently announced reforms of the gas sector, though some crucial gaps still remain. Two of the steps announced by the Special Assistant to the Prime Minister Nadeem Babar are the elimination of the role of the government in future contracts for setting up LNG terminals, and the offer made to the industry to pay half of their outstanding amounts due under the Gas Infrastructure Development Cess in return for a sharp discount on the remaining amount. Aside from this, there is a great deal of emphasis on reforms related to “ease of doing business” to cut down the number of approvals and other red tape required to invest in the oil and gas sector. The thrust of the reforms is to generate investor interest and unclog the payments pipeline in the matter of the GIDC, where outstanding dues have crossed Rs400bn and become the subject of a grinding dispute between private power producers and the government.
Now we will wait to see how the power sector responds to the government’s offer, especially with the IPPs. If there is uptake on the offer regarding the GIDC payments, it will be a good start, since the matter has already gone into extended litigation. But this solution could be short-lived. Next, it will be important to note how much interest the five global companies that have been cleared to build the next LNG terminal show in the new framework announced by Mr Babar. The government is no longer offering any sovereign guarantees, capacity charges or off-take commitments for future LNG terminals, and operators have been told to arrange their own buyers, as well as third-party access to pipeline capacity. If interest in the proposition is weak, we will know that Pakistan’s LNG markets still have a lot of growing to do before the sector can stand on its own feet.
Missing in all this is any mention of price reform, especially for domestic gas. The growing role of LNG in Pakistan’s economy is forcing some pricing reform of its own, but until a more comprehensive shift towards greater market based pricing of the precious resource is not brought about, the true potential of private sector investment in the gas sector will not be unlocked. Granted this is likely to make gas more expensive, reflecting its true cost rather than a subsidised one. But without this price reform, easing the path of approvals for new investors, and facilitating one-off settlements of outstanding payments, will have limited and short-lived impact. The gas sector is in the midst of a critical transition as LNG imports grow, and it is important that the government’s hand is not being driven by the force of circumstance when navigating the new terrain it has entered.


Awards for judges

SHOULD the judiciary be incentivised in terms of the quantum of cases decided or the quality of justice dispensed? That is the question. It recently emerged that presiding officers from 24 out of the 167 model criminal trial courts in the country are to receive awards from Chief Justice Asif Saeed Khosa for disposing of the highest numbers of cases before them. Altogether, according to the official data, the MCTCs decided 4,897 cases of murder and 7,687 of narcotics since they were established in April. A total of 55,619 witnesses were examined during the course of the trials. Among the awardees is the presiding officer of the Charsadda MCTC who decided 185 murder and narcotics cases and the Islamabad-West MCTC that disposed of 69 murder cases. Some women judges have also made the list.
There is no doubt the country’s justice system needs a shot in the arm. The shoddy, leaden-footed workings of the courts make a mockery of justice and often exacerbate the anguish of litigants. From the outset of his tenure, Justice Khosa had made it clear that one of his principal objectives as the country’s top judge was to tackle the interminable delays between the institution of cases and their final disposal. To this end, he announced the setting up of MCTCs in every district, headed by judges who would conduct expeditious trials without adjournments. However, presenting awards to the presiding officers who have closed the most number of cases in these courts could inadvertently distort how the concept of justice is viewed. Certainly, procedural delays are a huge problem and must be addressed. They increase the costs for litigants; encourage corruption, especially at the lower court level; contribute to the over-crowding of prisons; expose under-trial prisoners, who may be behind bars for minor offences, to the sordid influence of hardened criminals, etc. In other words, such delays are the root cause of many of the issues that plague the system. But there is another, equally pernicious, aspect to this scenario. As the outcome of many court proceedings has illustrated, substandard investigations defeat the ends of justice in several ways. At times, they result in perpetrators of serious crimes going free, if they are apprehended at all; at others, they lead to innocent people being convicted, even sent to the gallows. While fair-minded, hardworking judges must be appreciated, justice should be about substance rather than form.

Apocalypse now

WE live in precarious times. Volatile, changing climate spells disaster for human civilisation, and the threat is not in some distant future. It can be felt presently, right now, all around the world, with glaciers melting at a rapid speed, sea levels increasing, and rising ocean temperatures and acidification. Earlier this month, Iceland residents held a funeral for the first glacier they lost to global warming. Scientists estimate that the small island nation will lose all its glaciers in the next 200 years. While most scientific reports have highlighted human-caused destruction of the mighty oceans in the past several years, the recent draft of a 900-page report on the world’s oceans and cryosphere by the UN’s Intergovernmental Panel on Climate Change warns of the threat posed by the oceans to human life. Their predictions for the future are near apocalyptic.
Unless current levels of carbon emission are brought under control, the world will steadily witness the loss of delicate ecosystems and fish supply, a source of sustenance and income already threatened by overfishing and plastic pollution. There will be a “hundred-fold or more increase” in the devastation caused by powerful superstorms; and rising sea levels will lead to the displacement of millions of people, causing a massive refugee crisis. One glaring example of how countries are adapting to the havoc posed by climate change is in Indonesia, which is shifting its capital from Jakarta — sinking by up to 6.7 inches a year — to the Borneo island. The relocation will cost the country a massive $33bn. With all these obvious changes and warnings, it should be clear that the world economies cannot continue to operate the way they have since the turn of the century. Yet some of the most powerful world leaders continue to remain in denial, as witnessed in Brazil after the devastating Amazon fire. And the president of the biggest global greenhouse gas emitter on the planet, the US, says he will not jeopardise “wealth” for “dreams”.


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