Accountability The Cornerstone of Good Governance Reality in Pakistan

Accountability in Pakistan: From Promises to Power Struggles, The Untold Story of Energy Sector Woes

Pakistan accountability, power sector corruption, IPP contracts, energy mismanagement, electricity tariffs, circular debt, governance reforms, and transparency in PPPs

https://mrpo.pk/democracies-on-decline/

Accountability: The Hilarious Tragedy of Calling for Justice in Pakistan

“Accountability” is one of those noble words everyone loves to say but few want to live by, the verbal equivalent of promising to start jogging every morning but never throwing out your comfy slippers. Wherever you look, be it the United States, the United Kingdom, or, let’s zoom in, Pakistan, this grand ideal is invoked, revered, and, more often than not, spectacularly dodged. But why does this beautiful ideal repeatedly hit a wall, particularly in Pakistan, where political slogans about rooting out corruption echo as reliably as the Monday morning blues?

What Is Accountability, Anyway?

In kindergarten terms, Accountability means owning up to your actions, especially if you mess up. Imagine your little brother breaking mom’s vase and, miraculously, confessing, even though he could’ve blamed the cat. Now, imagine Pakistan’s leaders being as honest. (Comic pause for effect.)

More formally, accountability refers to the process of answerability and responsibility that ensures individuals and institutions are held to ethical, legal, and social standards. In healthy societies, it keeps ministries in check, businesses ethical, and kids returning mom’s change after grocery shopping.

Accountability: The Cornerstone of Good Governance and Its Elusive Reality in Pakistan

Accountability is one of those words that sounds straightforward, like “please” or “thank you,” but turns out to be a lot harder in practice, especially in the context of running a country. At its core, accountability means answerability—you do something, you explain it, and you own up to the consequences. Imagine a classroom where every student has to present their homework and accept honest feedback. Now, imagine that’s the norm in politics and governance too.

Globally, accountability is the heartbeat of democracy, transparency, and fairness. It’s what ensures elected officials serve their citizens, that public money isn’t squandered in secret, and that ethical lines aren’t crossed or conveniently erased. Without it, power can mutate into unchecked authority, and trust dissolves.

Yet, in Pakistan, accountability feels like a perennial aspirational slogan, fiercely chanted in political rallies, but rarely fulfilled. Reports, commissions, campaigns, Pakistan has seen them all. But the “accountability show” often ends in scripted exits, forgotten dossiers, and institutionalised amnesia.

What’s going wrong? And what can the story of Pakistan’s energy sector—and particularly its Independent Power Producers (IPPs), tell us about the broader accountability crisis?

Why Does Accountability Fail in Pakistan?

Good question! The answer is a classic blend of tragedy and farce, worthy of its own Netflix drama.

• The Blame Game Is a National Sport

Instead of taking responsibility, politicians and bureaucrats have mastered the art of finger-pointing. It’s like watching professional dodgeball, except the balls are legal notices and media leaks.

• Institutions With Cracked Foundations

Independent institutions? In theory, lovely. In practice, you might as well believe in unicorns. Watchdog bodies, anti-corruption bureaus, and judicial commissions often have their strings pulled by powerful “handlers”. When the rulers themselves become the referees, you already know the outcome, don’t you?

• Selective Justice

This one’s a classic: one set of rules for friends, another for rivals. Accountability rarely bites the hand that feeds or funds it. Political vendetta masquerades as justice, while the real wolves in sheep’s clothing host press conferences about “transparency.”

• Loopholes, Legalese, and the Law’s Tortoise Pace

Pakistan’s legal system could outlast a Game of Thrones saga; cases drag on for decades, witnesses recant, and key evidence gets “lost.” If you’re rich, you can find a loophole; if you’re powerful, you can create one.

• Society Shrugs

Let’s be honest: public memory runs shorter than the battery on an old smartphone. Scandals make for great dinner table gossip, but after a week or two, most folks move on (unless, of course, there’s another cricket match).

The Pop Culture Take

Remember how in “House of Cards” Frank Underwood twisted every law for personal gain? Now, imagine every season rewritten in Islamabad, starring politicians, generals, and a supporting cast of revolving judges. The difference: In the Pakistani drama, the villains rarely get what’s coming.

The Accountability Machinery in Pakistan: Fault Lines and Failures

Pakistan’s accountability ecosystem is an elaborate mix of laws, investigative bodies, and regulatory commissions. The National Accountability Bureau (NAB), born out of the 1999 National Accountability Ordinance, is the flagship anti-corruption watchdog. Alongside NAB are the Federal Investigation Agency (FIA), provincial anti-corruption units, Public Accounts Committees, and auditors tasked with keeping government machinery in check.

On paper, these entities possess sweeping powers to pursue corrupt actors. But in reality, they juggle obstacles like political interference, selective justice, and institutional weaknesses. For every high-profile arrest, there are thousands of cases that stall or vanish quietly in court corridors.

Why? Because accountability in Pakistan is less about consistent justice and more about political theatre. When the powerful wield accountability tools as weapons against rivals and shields for allies, the machinery gets jammed.

Several factors undercut genuine accountability:

• Political Gamesmanship: Accountability is often a political chess piece rather than an impartial remedy,fired selectively to consolidate power or target foes.

• Weak Institutional Independence: Investigators and prosecutors operate under a cloud of pressure from politicians or powerful unelected actors.

• Judicial Bottlenecks: Overloaded courts and lax enforcement mean prosecutions drag on endlessly.

• Socioeconomic Apathy: Citizens burdened by daily struggles have limited bandwidth or trust to demand sustained accountability.

• Power Silos and Parallel Institutions: The civil vs. establishment power tussle creates alternate accountability spheres, with some fingers untouchable.

Together, these cracks create a governance culture where corruption is frequently tolerated and accountability is inconsistently applied.

Wheat & Sugar: The Export-Import Merry-Go-Round

Now, on to the culinary comedy. The wheat and sugar “drama” is a masterclass in bad governance and institutionalised cartels. Picture this: the government enthusiastically announce we have surplus wheat or sugar in stocks, exports wheat or sugar at one point, creating eventual shortages at home, subsequently claiming a shortage of these items, spiking prices, then rushes to import the same commodities at a premium (paid by taxpayers, naturally) in the same financial year. Investigations have detailed how a handful of politically linked families corner the market, manipulate prices, and secure subsidies, draining billions from the public treasury while living large

The Takeaway

Pakistan’s struggles with accountability in billion-dollar corruption cases are neither accidental nor rare globally, but the sheer frequency, scale, and impunity do set a rather sad benchmark. Other nations do compete, but in the regional championship for headline-grabbing, brazen corruption in energy and food chains, Pakistan remains a consistent top seed. The outcome? Overpriced power, empty pantries, and a population paying—sometimes with their very lives—for the reckless ambitions of a privileged few.

If there’s comfort, it’s this: at least no one in Pakistan sugarcoats the problem anymore. Now, whether anyone will actually fix it… Well, there’s always the next committee.

From Governance to Grid: Why Energy Sector Accountability Matters

The energy sector often reflects the state of national governance. Pakistan’s electricity crises, rolling blackouts, sky-high bills, and circular debt are symptoms of deeper maladies in management, accountability, and policy execution.

Enter the Independent Power Producers (IPPs), private entities meant to bolster electricity supply by investing their own capital. The idea was to attract private investment, boost generation capacity, and reduce load-shedding. Sounds promising, right?

Yet decades later, these IPP contracts have become emblematic of accountability failures, financial inefficiency, and corruption, with costs passed on to everyday consumers.

The IPP Saga: Contracts, Controversies, and Costly Consequences

The IPPs started gaining prominence in the 1990s under government policies aimed at privatising power generation. The government signed Power Purchase Agreements (PPAs) promising to buy electricity at fixed prices, often denominated in US dollars, guaranteeing handsome returns to IPPs, a standard business practice on paper.

But in Pakistan, the devil is in the details:

• Capacity Payments: Consumers pay capacity payments—amounts paid to IPPs for power availability, not actual electricity generated. This means bills cover power plants sitting idle. Today, capacity payments make up about 70% of consumer electricity bills.

• Take-or-Pay Clauses: Contracts oblige the government to pay for contracted capacity whether or not it’s consumed—putting consumers on the hook for unused power.

• Dollar-Linked Tariffs: With rupee volatility, dollar liabilities balloon, inflating tariffs.

• Opaque Negotiations: Contracts were often negotiated non-transparently, frequently without competitive bidding, enabling politically connected groups to secure overly generous deals.

• Excessive Profit Guarantees: Contracts guarantee very high returns (sometimes 17% or more), irrespective of performance or demand realities.

• Fuel Import Dependence: Many IPPs run on imported fuels, adding vulnerability to international price shocks, further amplifying consumer costs.

In short, these fossilised contracts and terms shift enormous risk and cost onto Pakistan’s public, burdening households already struggling with economic pressures.

Consequences Beyond the Bill: Circular Debt and Economic Drag

A direct fallout of these contracts is the notorious circular debt, a debt spiral created when utilities can’t collect payments from consumers or government agencies, but still owe IPPs. This unpaid amount piles up, eroding the power sector’s financial health. As of now, Pakistan’s circular debt stands at over Rs 5 trillion ($25+ billion).

The impact? Utility companies delay payments to IPPs, causing further financial and operational disarray. To plug gaps, tariffs rise, pressuring consumers further, creating a vicious cycle of debt and distrust.

Moreover, this financial chaos scares off much-needed investment, not just in energy but across sectors, compounding Pakistan’s growth challenges.

Accountability’s Missing Link: Why Are IPP Contracts So Difficult to Reform?

Despite public anger, governments have wrestled with reforming IPP contracts because:

• Powerful Stakeholders: Many contracts benefit politically connected businessmen or influential shareholders entwined with ruling elites.

• Opaque Contract Terms: Non-disclosure and vague clauses hinder renegotiation efforts.

• Institutional Weakness: Regulators and policymakers often lack the independence or technical expertise for tough reform.

• Short Political Horizons: Governments hesitate to bite the bullet, fearing economic disruption or political backlash.

• Limited Public Pressure: Although anger is widespread, coherent public demand for reform is sporadic and diffused.

Only during the tenure of former Prime Minister Imran Khan did Pakistan see a semblance of serious IPP contract renegotiation, including pay cuts and early contract termination in some cases. However, such efforts are exceptions and have yet to become systemic.

Lessons for Pakistan and Beyond: What Can Be Done?

Countries seeking to avoid the structural pitfalls experienced in Pakistan’s Independent Power Producers (IPP) model could learn from several key issues inherent in Pakistan’s approach that have severely hampered its energy sector:

• Capacity-Based Payments Instead of Output-Based
  Pakistan’s IPP contracts primarily involved capacity payments, meaning the government pays for the installed power capacity regardless of whether the electricity is generated and supplied. This results in paying for idle plants, driving up costs unnecessarily and straining government finances. Other countries should design contracts that link payments to actual performance and power delivery, encouraging operational efficiency.

• Dollar-Denominated Contracts Leading to Currency Risk
  The contracts are usually denominated in US dollars, exposing the government to exchange rate risks. As the Pakistani rupee depreciated, the cost of servicing these contracts ballooned, exacerbating financial stress and increasing circular debt. Avoiding hard currency indexation or including robust currency risk mitigation measures can protect economies from such shocks.

• “Take-or-Pay” Clauses Increasing Financial Burden
  Pakistan’s IPPs often include “take-or-pay” terms, forcing the government to pay for electricity capacity even if the power is not consumed due to demand shortfalls or inefficiencies. This inflexibility limits the government’s ability to manage the supply-demand balance and increases the fiscal burden.

• Poor Transparency and Political Interference
  Many IPP contracts lacked transparency in bidding and procurement, with allegations of corruption, over-invoicing, and political patronage leading to inflated costs (sometimes up to four times higher than comparable projects regionally). Countries should adopt transparent, competitive bidding processes with independent oversight to prevent misuse of funds and inefficient projects.

• Overreliance on Imported Fuels for IPPs
  Many IPPs in Pakistan rely heavily on expensive imported fuels, despite having domestic energy resources like coal. This reliance drives up electricity costs and vulnerability to international market fluctuations. Diversifying fuel sources and leveraging local energy resources can improve cost and energy security.

• Weak Institutional Capacity and Regulation
  Pakistan’s regulatory institutions overseeing IPPs have suffered from limited capacity, political interference, and a lack of autonomy, which has hampered the enforcement of contracts and sector reforms. Strong, independent regulatory bodies with technical competence and insulation from politics are crucial for sector stability.

• Growing Circular Debt as a Systemic Risk
  Structural inefficiencies in IPP contracts, tariff policies, and energy subsidies have led to an unsustainable circular debt in Pakistan’s energy sector, undermining utilities’ ability to pay producers and maintain infrastructure. Countries should maintain financially sustainable tariff structures and transparent subsidy mechanisms to prevent such spiralling debt.

• Lack of Contract Renegotiation and Dispute Resolution
  Pakistan’s government has struggled to renegotiate IPP contracts or resolve disputes effectively, which perpetuates financial and operational issues. Flexible frameworks for renegotiation under changing circumstances, along with clear legal paths for dispute resolution, can mitigate long-term crises.

In summary, Pakistan’s IPP model teaches that poor contract design, especially capacity-based payments, dollar linkage, and take-or-pay clauses—combined with weak regulatory oversight, political meddling, and corruption risks can devastate an energy sector. Other countries should aim for performance-based contracts, transparent competitive procurement, diversified fuel sources, robust independent regulators, and prudent fiscal management to avoid repeating Pakistan’s costly mistakes.

These lessons emerge from extensive studies and reports on Pakistan’s IPP experience, notably highlighting structural inefficiencies and governance failures that other countries can seek to circumvent for more sustainable and equitable power sector development.

A Personal Note: The Chai-Time Reality Check

I recall a conversation with a seasoned power sector veteran who said over steaming chai, “In Pakistan, accountability is like the monsoon; every year, it is promised with great fanfare. Then, after a few rumblings of thunder and some lightning strikes, the rains stop, and the old drought continues.” It’s a wry observation, but it captures the elusive nature of genuine reform in sectors weighted by entrenched interests and weak institutions.

The Final Watt: Until Accountability Flows, Bills Will Surge

Electricity powers Pakistan’s future. Without reliable and affordable energy, everything stalls: businesses, schools, hospitals, homes. The IPP saga and energy mismanagement narrate a larger story of how distorted accountability processes burden ordinary citizens for the gains of a few.

But change, as always, starts small and slow, strengthening institutions, building transparency norms, fostering civic engagement, and insisting that contracts serve the public good, not just private profit.

If Pakistan can harness accountability not as a political tool but as a governance principle, the long-consuming darkness of inflated power bills and interrupted supply can give way to a bright, equitable future.

References

1. Pakistan’s PKR2.1 trillion capacity payments crisis triggers power purchase agreement reforms — IEEFA, 2025

2. Govt strikes Rs3.69tr deal with IPPs, eyes power sector reform acceleration — Pakistan Today, 2025

3. Pakistan’s Energy Crisis: Challenges and Path Forward — ISSI, 2024

4. Flawed IPP Agreements — The Nation, 2025

5. Government approves revised deals with 14 independent power producers — Arab News, 2025

6. Power sector controversy: take-or-pay contracts — Business Recorder, 2024

7. Paying heavily for reckless contracts — Dawn, 2023–2024

8. Circular Debt Dynamics and Energy Sector Reforms — World Bank, 2024

9. Lessons from Independent Private Power Projects in Pakistan — World Bank, 2024

10. Integrity Pacts and Transparency in Public Procurement — Transparency International, 2023

Would you like me to also prepare a version including illustrative case studies, infographics, or a section about recent reform attempts and their outcomes?