STRAIGHT TALK by Hafeez Khan
PDM’s threat has dissipated for now. Chances of their resurrection at the same level are slim and at least not until the end of the year. It is an opportunity for Prime Minister Imran Khan to play catch up and come out swinging. The onset of COVID for PM IK may have been a blessing in disguise. When one is battling day in and day out, the focus is on here and now and dealing with it. The ability to detach and strategize gets diminished.
Isolation provided time to reflect, and there is much to reflect on. Who knows better than PM IK about the weak links in his team? This was the opportunity to prioritize, set his agenda and announce targets for the balance of the term. I call it the 2nd awakening. He has gained first-hand experience of governing the ungovernable in the past two and a half years. He can pursue the designated tasks with the fervor required to put his stamp and take control of the stewardship relentlessly without fear or favor. If he could bench his mentor and cousin Majid Khan early in his cricketing career, 40 years on, why can’t he be ruthless for the greater good? He must start with booting out the deadwood in his team and inject fresh blood.
The process has started. Nadeem Babar’s unceremonious departure is a whiff of fresh air. He severely compromised and misled the cabinet with his silky tongue. He deserves an indictment. Hafeez Shaikh, despite his tremendous economic skills, could not sensitize himself to the needs of the common man. I would term it retired hurt.
But the “Elite’s Regulatory Capture” does not end there. My contemporaries would agree that we are no spring chickens, but PM IK is carrying fossils with him. Dr. Ishrat Hussain is way beyond his shelf life. He is tasked with the implementation of a major campaign promise; institutional reforms. Such a dynamic cause given to such a low energy person; he needs to be immediately replaced with an energetic, motivated and contemporary implementer.
Razaaq Dawood has “conflict of interest” written all over him. This slick, smooth, egoistic and self-serving occupant of the corridors of power is likely to be the greatest embarrassment for Government. He is not only benefitting personally but promoting corrupt elites’ interests whispering into PM IK’s ears surreptitiously. As the Czar of commerce, industry, production and investment, what has he delivered that could be touted as PTI’s achievement in 3 years? PM IK needs to get rid of him fast.
The biggest threat facing the nation is internal. It is the debt trap laid by PPP in the 90’s in the shape of IPPs. Pakistan has its rivers running through terrains ideally suited for dams to generate cheap electricity. But dams did not fit within an election cycle and they don’t feed schemes of self-serving corrupt politicians and their partners. Dams involve governments and institutional lenders who scrutinize projects thoroughly. As an alternative a scheme was hatched and planned perfectly to perpetuate the biggest fraud.
For the uninitiated, this is how the ponzi scheme of IPPs operated. Benazir and her team recognized that existing capacity of power generation in Pakistan was insufficient. They embarked on a mission with corrupt sponsors to build power plants in private sector based on oil. At that time plenty of power plants were available doted all over the newly dismantled USSR in the now independent republics. They had inherited the infrastructure but they lacked oil supplies and were strapped for cash; mostly ruled by greedy despots.
It was an ideal opp ortunity for a money-grab by the unscrupulous PPP leaders and corrupt elite. This massive fraud was carried out in two parts. First, the shut down power plants were purchased at scrap prices, given cosmetic uplifts and imported at extravagant prices. It inflated the sponsors’ equity and provided opportunity to defraud lenders while pocketing over-invoiced millions. Second, IPP entered into long term high tariff contracts with the Government courtesy of Zardari and co. through offshore companies. This structuring enabled local sponsors through their proxies to take on any regime that interferes with their hen laying the golden eggs in international courts.
This criminal enterprise was repeated multiple times by PPP in their regimes and relished by Nawaz Sharif in his three terms. Mostly tariffs were payable in dollars and pegged to the price of oil. The kicker that is hemorrhaging in a life-threatening way in this massive fraud is called “capacity” payments. It means the Government is obliged to pay for the full generating capacity of the power plant whether it produces electricity or not.
This unholy alliance of termites is devastating to the national interest. Major surgery is required and if necessary, amputation. The poor man cannot carry this burden. Out of the box solutions are required. Forensic audit should be conducted of all the errant IPPs. Based on results, full-fledged criminal prosecution should be commenced to bring the perpetuators to their knees. Alternately, legislation should be passed by all political parties co-operating in national interest to nationalize these rogues. Compensation can be paid in bonds payable in 30 years. PTI is into its 3rd year and the voters expect delivery in real terms.
Author’s note: The list of priorities and suggested solutions is quite extended. They would be covered in the articles to follow.
