Wednesday, May 3, 2017
Business Recorder editorial May 3, 2017
CCI meeting The Council of Common Interests (CCI) met on May 2 after a gap of four months since its last meeting in December 2016. After the 18th Amendment, the CCI is supposed to meet every three months. Hopefully, all the stakeholders will work towards meeting that constitutional requirement. The meeting, chaired by Prime Minister Nawaz Sharif, had all four chief ministers in attendance. Although the chief ministers of Sindh and Khyber Pakhtunkhwa met the prime minister separately before the CCI session to express their reservations about water, power and gas projects, this issue was not taken up in the CCI, which decided to settle only contentious outstanding agenda items rather than fresh problems. The decisions arrived at by the CCI reflected this choice. First and foremost, some major amendments were agreed in the Generation, Transmission and Distribution of Electric Power Act 1997 (known as the NEPRA Act). NEPRA was stripped of its power to independently determine electricity tariffs. In future, NEPRA will have to follow the government’s directions in determining tariffs. An “independent panel” would be formed that could challenge NEPRA’s decisions. Reportedly, the changes were not shared with NEPRA before the CCI meeting, although a NEPRA team had been invited to present a “State of Industry Report” but that could not be taken up. Chief Minister Punjab Shahbaz Sharif criticized the regulator for inefficiency, which had hampered private sector investment. He said his government had been recently able to bring down the solar power tariff to less than six cents per unit, a role that should have been played by NEPRA. Chief Minister Sindh Murad Ali Shah also criticised NEPRA for creating irritants for renewable energy and pushing the Thar coal projects. To cut NEPRA’s regulatory powers, another amendment has been made to Section 31(4) of the Act, freeing the federal government from being bound to seek review of any determination within 15 days, failing which the determination was deemed to have been notified automatically. A new clause in the Act empowers the federal government to impose a surcharge on any consumer category, to be collected by the power distribution companies. The government can use such surcharge for “discharging public service obligations” (a very broad term). This clause is intended to address challenges arising out of judicial intervention against three surcharges for debt servicing, tariff equalisation, etc, surcharges that constitute virtual taxation without proper authorization or representation. It was agreed in principle that the provinces would have their own power regulatory bodies instead of a national regulator since electricity is a provincial subject under the Federal Legislative List-II. Chief Minister Sindh Murad Ali Shah gave up his demand for full federal financing of the Rs 177 billion flood protection plan as advocated by his predecessor Qaim Ali Shah after the three other provinces sided with the Centre for sharing the burden 50-50. The plan had been thrice deferred by the CCI in the past because of such financing disputes. The CCI unanimously decided to punish the corrupt elements responsible for the messed up Kachhi Canal project, heard the prime minister dilate on the sorry track record of delays and inefficiencies in project management, deferred the higher education regime issue till the provinces had discussed it with Planning Minister Ahsan Iqbal, discussed LNG import, the ongoing census and the threat to water needs and food security emanating from climate change. Even this brief perusal of the deliberations of the CCI proves the efficacy and importance of the institution. This is even more critical at a time when the 2013 elections have thrown up a fractured mandate, with the PML-N in power at the Centre and in Punjab, in a coalition government in Balochistan, and with the PPP and PTI in power in Sindh and Khyber Pakhtunkhwa respectively. The CCI is clearly the platform intended for, and able to, mediate differences and conflict amongst the provinces and between the provinces and the Centre. All stakeholders, in recognition of this role, must ensure the CCI meets according to its constitutionally laid down interval of three months. Many of the old, and some new, issues that are on the national agenda lend themselves to positive resolution in the CCI.