Another failed power grid privatisation

This Dawn Editorial explains why the KESC, which supplies the city of Karachi's electricity, should not have been privatised. We've seen all this before, all over the world - the mantra that government is inefficient, whereas the private sector poses a magical property that can turn those government enterprises around.

Why KESC’s privatisation was bound to fail

. . . It is grave folly to create a private-sector monopoly seemingly answerable to no one. If the logistics of the power sector did not permit breaking up KESC into independent units, then the utility should have been left in government hands.

Without any competitors, KESC could get away with anything — and it did. Little was done to increase generation capacity or check transmission and distribution losses which, according to KESC, stood at over 32 per cent in July-December 2008. Generation was reduced to a fraction of the installed capacity as poorly maintained units frequently broke down. The company’s management was appalling and its technical base weak. As a result, prolonged spells of loadshedding inflicted untold misery on homes, businesses and industrial units alike. Billions were lost as production routinely came to a standstill. Not surprisingly, power riots broke out in Karachi on a number of occasions. . .

I'm not sure that I agree with the editorial's conclusion - that the privatisation should not be reversed under present circumstances - but the first point is sound: it isn't state control that creates inefficiency. It's monopoly.