Pakistan's Military Sets an Example: Energy Companies Under Pressure

In Pakistan, there is a significant development in the energy sector that involves both economic relief and political tension. Five local energy providers have prematurely terminated their power supply contracts with the government under substantial pressure from security services. According to the Ministry of Energy, this measure is expected to save the cash-strapped government 411 billion rupees (approximately 1.48 billion USD) and reduce electricity costs for households and businesses. Under Prime Minister Shehbaz Sharif, the prioritization of national interest over personal interest is emphasized, with a semblance of voluntariness from the energy companies. However, the stories from practice tell a different tale: it apparently took not just a little persuasion but massive intimidation by the security services. An energy sector insider speaks of a threatening negotiation tactic that went far beyond simple discussions. Multiple times, senior executives were reportedly summoned to meetings with security officers, including Nadeem Anjum, formerly the head of the notorious Inter-Services Intelligence. Under the influence of these circumstances, the stock prices of the affected companies fell sharply within a month. Despite contrary assurances from the government and the military about a civilized negotiation environment, the termination of the contracts has had serious market impacts – shares of the Hub Power Company have fallen by over 30 percent, while those of Lalpir Power have experienced an even steeper downward trend. In the long term, the state's approach, which points to the growing role of the military in economic matters, could deter investors and jeopardize the planned privatization of state-owned companies. Experts foresee the possibility that the savings may be less than officially hoped, which could harm investor confidence in the long run. It remains intriguing to observe how this dynamic between the energy sector and state institutions evolves in a country experiencing increasing economic pressure.