Pakistan suffers frequent power outages that have a huge negative cost on businesses and general quality of life (story here: “Pakistan utility company fights to power chaotic port megacity“). Here is why privatization seems like an obvious choice:
1. “Power cuts lasting 12 hours a day or more have devastated Pakistan’s economy. The loss of millions of jobs has fuelled unrest in a nuclear-armed nation already beset by a Taliban insurgency.”
2. “At the state-run Peshawar Electricity Supply Company, the majority of staff are illiterate, most new hires are relatives of existing staff and 37 percent of power generated was stolen.”
In 2008, the government decided to privatize the Karachi Electric Supply Company. The new owners fired about 1/3 of the workers, cut off customers who didn’t pay their electric bills, and cracked down on people illegally tapping into the electric system.
The response was quite telling. First…