EDITORIAL: The Overseas Investors’ Chamber of Commerce and Industry (OICCI) has once again put forward a set of power sector reform proposals that deserve far more than just polite acknowledgment. This is not the first time OICCI has flagged structural weaknesses in Pakistan’s electricity market, and it will certainly not be the last. Yet what sets the Chamber apart from many other lobby groups is the nature of its critique. Rather than centering the debate on temporary tariff reliefs or ad hoc subsidies, OICCI has consistently argued for reforms that address the underlying architecture of the power sector. That alone should compel policymakers to listen more carefully, particularly at a time when energy costs continue to erode industrial competitiveness and constrain economic growth. Pakistan’s power sector problems are well documented. High generation costs, capacity payments locked into inflexible contracts, inefficient distribution companies, weak governance and an ever recurring circular debt have turned electricity into a binding constraint on growth. Governments have come and gone, each announcing reform packages with varying degrees of ambition, yet the sector remains structurally fragile. Some progress has undeniably been made in recent years, especially in terms of slowing the accumulation of circular debt and rationalising tariffs. But these gains are precarious and reversible if deeper reforms are not pursued. OICCI’s proposals must be seen in this context, not as an isolated wish list but as part of a longer conversation on how to place the sector on a sustainable footing. A central thrust of the Chamber’s recommendations is the shift away from the entrenched cost plus model of power procurement toward competitive, auction-based mechanisms, particularly for renewable energy. Pakistan’s experience with guaranteed returns and take-or-pay contracts has been expensive, transferring risk almost entirely to consumers and the public exchequer. Capacity payments have ballooned even as demand growth has remained uneven, locking the system into high fixed costs. Competitive auctions, by contrast, have proven globally that prices can be discovered efficiently while attracting investment without excessive guarantees. For a country that is seeking to expand renewable energy while managing fiscal stress and external vulnerabilities, this is not a theoretical preference but an economic necessity. Equally important is OICCI’s emphasis on making the Competitive Trading Bilateral Contract Market (CTBCM) workable in practice. The promise of CTBCM lies in introducing competition and choice, yet progress has been slow and uneven. Power wheeling, in particular, has remained mired in uncertainty due to opaque charges and inconsistent regulatory signals. By calling for a transparent, cost reflective framework for wheeling and for unbundling use of system charges, OICCI is highlighting a core issue that affects investors and industrial consumers alike. Without clarity on how electricity can move across the grid and at what cost, the market will remain stunted and risk a loss of credibility. The Chamber’s proposals also reflect an appreciation of industrial realities. Export-oriented sectors increasingly face pressure not only on cost but also on carbon intensity. Access to reliable and competitively priced clean electricity is fast becoming a prerequisite for participation in global markets. Pakistan’s grid, still heavily reliant on fossil fuels, leaves exporters exposed to emerging trade measures such as carbon border adjustments. OICCI’s focus on renewable integration, grid modernisation and transparent tracking of clean energy consumption speaks directly to this challenge. These are not environmental niceties but commercial imperatives that will shape the future of Pakistan’s manufacturing base. Another notable element in the proposals is the call for the gradual introduction of day-ahead and intraday power markets. Such mechanisms are standard in more advanced electricity systems, allowing better price discovery, efficient dispatch and smoother integration of variable renewable energy. Introducing these markets in Pakistan will require institutional capacity, robust settlement systems and regulatory oversight. OICCI’s caution that these steps should follow adequate testing and readiness assessments reflects a realistic understanding of local constraints. Reform, after all, fails as often from overreach as it does from inertia. Grid modernisation features prominently in the Chamber’s agenda and rightly so. Without investment in transmission, smart metering, storage and real time monitoring, the energy transition will remain aspirational. Pakistan has already seen how inadequate grid capacity can lead to curtailment of cheaper generation while expensive plants remain locked in due to contractual obligations. Dedicated transmission corridors, modern control systems and battery storage are no longer optional add-ons but core infrastructure requirements. If these investments are delayed, the costs will ultimately surface elsewhere, either through inefficiencies or through higher tariffs. Institutional reform is another recurring theme. The transition from a centrally controlled power system to a competitive market demands clarity of roles and accountability. Strengthening the independence and technical capacity of the regulator, empowering a credible system and market operator, and streamlining approvals across multiple agencies are all prerequisites for investor confidence. OICCI’s proposals implicitly recognise that market liberalisation without strong institutions can be destabilising rather than beneficial. This balance between opening markets and reinforcing oversight is one that policymakers must carefully manage. Perhaps most striking is the forward looking nature of the Chamber’s recommendations on carbon markets and SME participation. The suggestion to develop a national carbon market framework reflects an understanding of where global energy and trade regimes are headed. Similarly, enabling small and medium enterprises to participate in the electricity market through aggregation models signals an inclusive approach to reform. Too often, power sector debates are dominated by large incumbents, leaving smaller consumers exposed to inefficiencies they cannot influence. Addressing this imbalance is essential if reforms are to gain broader economic traction. The real test now lies with the government. Pakistan’s power sector cannot be reformed through rhetoric alone, nor can it afford another cycle of half measures. Ignoring well-grounded reform proposals because they challenge entrenched interests would be a costly mistake. If the authorities are serious about restoring growth, improving export competitiveness and reducing the economy’s exposure to energy shocks, they must move beyond reactive policymaking. OICCI’s proposals offer a credible starting point for that shift. Whether they are taken seriously or allowed to fade into the background will say much about the country’s commitment to meaningful reform. Copyright Business Recorder, 2026