Payment to IPPs
THE government has finally paid the first tranche of the outstanding bills of 20 independent power producers out of the 46 generation companies with whom it had signed revised power purchase agreements months ago to secure future tariff concessions. The SAPM Power took to Twitter on Friday to announce that this represented the government’s firm resolve to settle the issue of the power sector’s circular debt once and for all. In all, the government has paid Rs89.2bn to the 20 IPPs or 40pc of their unpaid bills of Rs225bn. The first payment to the rest of the IPPs is being withheld owing to various reasons, including inquiries launched by NAB against power companies set up under the 2002 power policy for allegedly making excess profits of around Rs54bn. The disputed excess profits constitute just above 13pc of the total unpaid bills of Rs403bn the government owes to the 46 IPPs. The government had agreed to pay these bills in two instalments within six months of the revision in their PPAs as part of its plan to liquidate the power sector’s growing circular debt that has already topped the Rs2.3tr mark.
The government decision to withhold payment defies all logic since the revised PPAs with the 2002 IPPs provided for independent arbitration under the Arbitration Submission Agreement option on alleged excess profits for an amicable resolution of the dispute. The decision of the accountability watchdog to target particular IPPs is also surprising since the profit earned by the IPPs, according to Nepra, “would be higher or lower than the return on equity allowed to them” because of such factors as operational efficiencies, cost-saving measures, better project management, etc. NAB intervention in purely technical issues is uncalled for since the regulator had already started investigating allegations of excess profits. Pakistan has a very poor track record of honouring commitments made to investors, and has suffered immensely on this count. Consider the example of Reko Diq where an international arbitration tribunal slapped a fine of nearly $6bn on Pakistan for revoking the agreement with Australian mining giant TTC, damaging the country’s credibility in the eyes of foreign investors. In order to avoid further damage, the government needs to tell NAB authorities to back off, and implement the agreements with the IPPs unless it wants to sour ties further with investors. The sooner the matter is closed the better for foreign investment in the country.
Drastic vaccine step
THE Sindh government’s decision to make Covid-19 vaccinations mandatory and to block the salaries of government employees who are not inoculated is indeed a drastic measure, as admitted by the province’s chief minister himself. The announcement has come as the country battles the third wave of the coronavirus with a vaccination rollout which this far has covered 3.7m individuals with one dose.
While the Sindh government has good reasons to fear a scenario in which vaccine hesitancy leads to a continuing threat from Covid-19 and lethal variants, the order to make it compulsory and to tie it to incomes needs to be re-examined.
In many countries, though SOPs such as mask-wearing and distancing are compulsory, vaccination itself is largely still voluntary. In the United States, for instance, officials are going all out to incentivise citizens to get a jab but are staying away from making vaccines compulsory so as not to overstep when it comes to individual liberty. In Ohio, the governor has announced a weekly $1m prize draw that only vaccinated citizens can enter. In Maryland, state employees are paid $100 if they get both doses. In New York, those who get vaccinated will receive a seven-day Metro card and even tickets to a baseball game. The idea behind these incentives is to encourage people to get vaccinated voluntarily — an exercise that builds trust between citizens and the state.
In Pakistan, where citizen trust in public institutions is generally low, a coercive policy threatens to further undermine public trust confidence. This could have consequences for adherence to important public health measures. For vaccine sceptics, a mandatory vaccine order will fuel resentment and may be viewed as a form of state oppression.
The Analytical Angle: Vaccine hesitancy in Pakistan is growing. Here’s how it can be tackled
Though the government could justify such measures in the interest of public health and safety due to the unprecedented nature of the threat, there are several other steps it can take to encourage people to get vaccinated voluntarily. This exercise will be contingent on building trust, educating citizens and giving incentives to persuade vaccine sceptics.
Though the Sindh government’s early signalling when it came to Covid-19 prevention and SOPs was exemplary, the PPP’s participation in mass PDM rallies was totally at odds with scientific advice and gave the wrong message to the population. The party needs to do better and act as a role model for citizens so that trust can be gained. A door-to-door awareness campaign is also critical, as is messaging from public figures and government officials. Conspiracy theories must be battled in all public spaces through ads, mainstream media and even mosque sermons.
Fear and mistrust can be overcome to some extent through awareness, incentives and trust-building measures. Penalties and punishments for vaccine refusals should really be a last resort. More importantly, the government must ensure there are enough free vaccines for those who want them.
Traces of Bollywood
LAST week, the Khyber Pakhtunkhwa Directorate of Archaeology & Museums finally took possession, after much back and forth, of the ancestral homes in old Peshawar of Bollywood legends Raj Kapoor and Dilip Kumar. On Tuesday, the city deputy commissioner issued a notification of the transfer of ownership of the properties to the relevant provincial department under the colonial-era compulsory property acquisition law. It had been announced months ago that the locations would be restored and reopened as museums. The sites have over the years suffered grievous damage.
The news must have been met with mixed reactions. Pakistan’s officialdom has always displayed a penchant for flaunting the country’s richly woven tapestry of cultural heritage. On the ground, however, it is fairly uncommon to see this lofty rhetoric translated into action. Things might be inching forward, though. The PTI government has laid particular emphasis on tourism as one of the tools in the country’s arsenal of ‘soft power’. The KP government’s promises in terms of the Bollywood stars’ ancestral residences follows on other headliners such as the excavation some months ago of a Buddhist site in the area, and the opening of Peshawar’s Sethi Haveli as a museum. True, grave problems and systemic inefficiencies remain, such as artefact theft and the failure to protect sites against defacement by an under-educated public. Still, one hopes that in the case of the Kapoor and Kumar havelis, legal tangles and officialdom’s inadequacies are not allowed to stymie worthy projects. Other provinces must step up their efforts too; sites deserving of protection and display adorn the entire country. The Radio Pakistan building in Karachi is one worthy of mention because Sindh is in particular lagging behind in showcasing its ample heritage. The upper parts of the country have fared slightly better. For Pakistan to cement its place amongst thoughtful, civilised nations, documenting and preserving its history is vital. The importance of areas of endeavour such as archaeology and heritage preservation must never be underestimated.