Contractual and Relational Governance Mechanisms in The Power Generation Sector of Pakistan: Adopting Public-Private Partnership Models
DOI:
https://doi.org/10.58932/MULA0058Keywords:
Public-Private Partnerships, Contractual and Relational Governance, Power Generation (PG) Mechanism and Energy PoliciesAbstract
Public-Private Partnerships (PPPs) are the main element of participatory governance. Since the late 1980s, PPPs have become an essential element in infrastructural development worldwide. In Pakistan, the PPPs approach has contributed to the infrastructural development, especially within the power generation sector. Energy is an essential element of economic growth, and an energy deficit significantly affects progress, impacting the socio-economic development of the country. In this article, the researcher examines the effects of contractual and relational governance mechanisms instead of the principle of governance in the energy sector. Contractual and relational governance mechanisms have different dimensions that make the governance process align with policies and implementation processes. The poor governance mechanism and inefficient policy implementation have negative effects on the energy sector, which becomes the cause of the energy crisis and creates a vacuum for many other problems. PPP models and approaches directly impact the intergovernmental coordination and governance structure. Moreover, the infrastructure of the transmission lines is not capable enough to produce and supplying the maximum demand. The objective of this study is to analyze and evaluate the existing PPP models, governance mechanisms, regulatory framework, and strategies within the power generation sector of Pakistan.
References
Abednego, M. P., & Ogunlana, S. O. (2006). Good project governance for proper risk allocation in public–private partnerships in Indonesia. 24(7), 622-634.
Akbar, A., Ahmad, S., Nadim, M., Bhatti, M. A. A., & Khan, H. (2024). Affect of Hrm on Employee Motivation Towards Green Creativity and Initiatives. Center for Management Science Research, 2(3), 197-216.
Ali, F., & Beg, F. (2007). The history of private power in Pakistan.
Ali, S. S., & Badar, S. (2010). Dynamics of Circular Debt in Pakistan and Its Resolution. 15.
Andrews, R., Esteve, M., & Ysa, T. (2015). Public–private joint ventures: mixing oil and water? , 35(4), 265-272.
Anopchenko, T., Gorbaneva, O., Lazareva, E., Murzin, A., & Ougolnitsky, G. (2019). Modeling public—private partnerships in innovative economy: A regional aspect. 11(20), 5588.
Ahmad, S., Qamar, A. J., Bhatti, M. A. A., & Bashir, U. (2023). Integrating Islamic Ethics with Modern Governance: A Comprehensive Framework for Accountability Across Religious, Social, and Economic Dimensions. Al-Irfan, 8(15), 51-79.
Anwar, A., Arshed, N., Ahmad, S., & Hayat, N. (2023). Nexus of Electricity Demand, Circular Debt and Economic Progress: An Evidence from Pakistan. 5(1), 14-29.
Awais, M., & Wajid, M. T. (2024). Comprehensive Analysis of Pakistan’s Renewable Energy Landscape. In.
Aziz, R., & Ahmad, M. B. (2015). Pakistan's Power Crisis. JSTOR.
Bacon, R. (2019). Learning from power sector reform: the case of Pakistan. (8842).
Benítez-Ávila, C., Hartmann, A., & Dewulf, G. (2019). Contractual and relational governance as positioned-practices in ongoing public–private partnership projects. 50(6), 716-733.
Bashir, U., Saeed, S., & Abbas, S. K. (2020). Strategies for new product development in an emerging market. Advances in Social Sciences Research Journal, 7(4), 393-397.
Benítez-Ávila, C., Hartmann, A., Dewulf, G., & Henseler, J. (2018). Interplay of relational and contractual governance in public-private partnerships: The mediating role of relational norms, trust and partners' contribution. 36(3), 429-443.
Bano, S., Shair, W., Afzal, H., Nisa, B.- un, & Bashir, U. (2024). Pro-Environmental Behaviors and the Prioritization of Environmental Protection over Economic Growth. Journal of Social Sciences Advancement, 5(4), 137–145.
Bhutto, A. W., Bazmi, A. A., & Zahedi, G. (2011). Greener energy: Issues and challenges for Pakistan—Biomass energy prospective. 15(6), 3207-3219.
Bhatti, M. A. A., & Nazir, M. U. (2024). The Impact of Project Process Management on Sustainable Project Success in the Construction Sector: The Moderating Role of Risk Management Practices. Bulletin of Business and Economics (BBE), 13(2), 1065-1072.
Cantù, C. L., Schepis, D., Minunno, R., & Morrison, G. (2021). The role of relational governance in innovation platform growth: the context of living labs. 36(13), 236-249.
Cartlidge, D. (2006). Public private partnerships in construction. Routledge.
Casady, C. B., Eriksson, K., Levitt, R. E., & Scott, W. R. (2020). (Re) defining public-private partnerships (PPPs) in the new public governance (NPG) paradigm: an institutional maturity perspective. 22(2), 161-183.
Cheema, T. B., Haque, N. U., & Malik, A. (2022). Power Sector: An Enigma With No Easy Solution.
Cheng, Z., Yang, Z., Gao, H., Tao, H., & Xu, M. (2018). Does PPP matter to sustainable tourism development? An analysis of the spatial effect of the tourism PPP policy in China. 10(11), 4058.
Claro, D. P., Hagelaar, G., & Omta, O. (2003). The determinants of relational governance and performance: how to manage business relationships? , 32(8), 703-716.
Colombelli, A., Paolucci, E., & Ughetto, E. (2019). Hierarchical and relational governance and the life cycle of entrepreneurial ecosystems. 52, 505-521.
Crouch, C. (2011). The strange non-death of neo-liberalism. Polity.
Cruz, C. O., & Marques, R. C. (2011). Contribution to the study of PPP arrangements in airport development, management and operation. 18(2), 392-400.
Dolla, T. (2025). Exploring the Legal Perspective of the Impacts of COVID-19 on the Public–Private Partnership Procurement Model. 17(2), 06525001.
Du, J., Shen, Z., Song, M., & Vardanyan, M. (2023). The role of green financing in facilitating renewable energy transition in China: Perspectives from energy governance, environmental regulation, and market reforms. 120, 106595.
Edkins, A. J., & Smyth, H. J. (2006). Contractual management in PPP projects: evaluation of legal versus relational contracting for service delivery. 132(1), 82-93.
Engel, E., Fischer, R. D., & Galetovic, A. (2020). When and how to use public-private partnerships in infrastructure: lessons from the international experience.
Ferguson, R. J., Paulin, M., & Bergeron, J. (2005). Contractual governance, relational governance, and the performance of interfirm service exchanges: The influence of boundary-spanner closeness. 33(2), 217-234.
Florini, A. (2013). The coming democracy: New rules for running a new world. Island Press.
Gerrard, M. (2001). Public-private partnerships. 38(3), 48-51.
Gwary, M. M., Asindaya, Z., & Abba, M. A. (2016). Public-private partnership as panacea for effective extension service delivery: Review of experience and potential in Nigeria. 4(3), 50-55.
Hart, O., & Moore, J. (2008). Contracts as reference points. 123(1), 1-48.
Hashmi, M. U. (2020). Public-private partnerships in the light of the principles of good governance: Pakistan's case Middle East Technical University].
Hitt, M. A., Lee, H.-U., & Yucel, E. (2002). The importance of social capital to the management of multinational enterprises: Relational networks among Asian and Western firms. 19, 353-372.
Hodge, G., & Greve C. . (2007). Public–Private Partnerships: An International Performance Review
Review. 545-558.
Howell, K. E., & Annansingh, F. (2013). Knowledge generation and sharing in UK universities: a tale of two cultures? , 33(1), 32-39.
Imam, M. A., Ahmad, S., Bhatti, M. A. A., & Afzal, M. (2023). Contextualizing Research Approaches: The Role of Western and Islamic Philosophies in Shaping Methodology and Knowledge Creation. Al-Irfan, 8(16), 69-90.
Irfan, M., Suleman, A. H., Sarwar, U. B., Abas, N., & Saleem, M. S. (2019). SWOT analysis of energy policy 2013 of Pakistan. 2(1), 71-94.
Kamran, M., Mudassar, M., Abid, I., Fazal, M. R., Ahmed, S. R., Abid, M. I., . . . Anjum, S. H. (2019). Reconsidering the power structure of Pakistan. 9(1), 480-492.
Kendagor, J. (2023). Investigation on the Public-private Partnerships (Ppp) Success as Procurement Method for Infrastructure Development in Kenya: a Case Study of Public Universities in Nairobi Metropolitan University of Nairobi].
Kessides, I. N. (2013). Chaos in power: Pakistan's electricity crisis. 55, 271-285.
Khaliq, M. A., & Hamid. (2017). Multi-dimensional Efficacy of Public-Private Partnership in the Energy Sector of Pakistan. 37(2), 529-548.
Khan, M. I., Khan, I. A., & Chang, Y.-C. (2020). An overview of global renewable energy trends and current practices in Pakistan—A perspective of policy implications. 12(5).
Khatri, K. L., Muhammad, A. R., Soomro, S. A., Tunio, N. A., & Ali, M. M. (2021). Investigation of possible solid waste power potential for distributed generation development to overcome the power crises of Karachi city. 143, 110882.
Khurana, M., Garvin, M. J., & Mahalingam, A. (2022). Synthesis of relational practices for PPP contracts and their linkage with governance mechanisms. 148(12), 04022131.
Klijn, E. H., & Koppenjan, J. (2015). Governance networks in the public sector. Routledge.
Kuan, L. H. (2009). Public-Private Partnerships in Defense Acquisition Programs-Defensible?
Latief, R., & Lefen, L. (2019). Foreign direct investment in the power and energy sector, energy consumption, and economic growth: Empirical evidence from Pakistan. 11(1), 192.
Li, H., & Zhang, Y. (2007). The role of managers' political networking and functional experience in new venture performance: Evidence from China's transition economy. 28(8), 791-804.
Lu, P., Guo, S., Qian, L., He, P., & Xu, X. (2015). The effectiveness of contractual and relational governances in construction projects in China. 33(1), 212-222.
Malik, A. (2012). Power crisis in Pakistan: a crisis in governance?
Malik, A. (2022). National Electric Power Regulatory Authority (NEPRA). 51.
Masroor, F., Ashfaq, M., Siddiqui, M., Hussain, M. M., Shahbaz, M. H., Sadeghi, M. K., & Saeed, G. A. B. (2021). The Power Sector of Pakistan; A brief Review. 121, 35735.
Mirjat, N. H., Uqaili, M. A., Harijan, K., Valasai, G. D., Shaikh, F., & Waris, M. (2017). A review of energy and power planning and policies of Pakistan. 79, 110-127.
Mirjat, N. H., Uqaili, M. A., Harijan, K., Walasai, G. D., Mondal, M. A. H., & Sahin, H. (2018). Long-term electricity demand forecast and supply side scenarios for Pakistan (2015–2050): A LEAP model application for policy analysis. 165, 512-526.
Moskalyk, A. (2008). The role of public-private partnerships in funding social housing in Muhammad, G., & Rahman.
Muhammad, Z., & Johar, F. (2019). Critical success factors of public–private partnership projects: a comparative analysis of the housing sector between Malaysia and Nigeria. 19(3), 257-269.
Mukhtar, A. (2023). Pakistan’s Energy Insecurity: The Way Forward. In The Dilemma of Energy Security (pp. 232-253). Brill.
Munir, K., & Naqvi, N. (2017). Privatization in the Land of Believers: The political economy of privatization in Pakistan. 51(6), 1695-1726.
Naqvi, A. A., Uzair, M., Akhtar, M., Zaidi, A. A., & Kazmi, S. U. H. (2022). Statistical Approach to select the Best Suitable Solar Model for Global Radiation: Case Study of Karachi, Pakistan. 17(32), 17-27.
North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge university press.
Nuwagaba, I., & Molokwane, T. (2020). A qualitative analysis of public private partnership (PPP) project contracts in the roads sector. A contextual elucidation of Uganda national roads authority (UNRA). 11(5), 44-57.
Obayelu. (2018). Public-private partnerships for inclusive agribusiness sustainability in Africa. 83(3), 251-261.
Putri, C. M., Rahmawati, N., & Bashir, U. (2025). Examining the role of religiosity in shaping ethical perceptions of creative accounting among accounting students. Journal of Accounting and Investment, 26(2), 420-435.
Qureshi, M., Ikram, S. H., & Bashir, U. (2024). Role of Financial Innovation in Enhancing the Meezan Bank’s Market Share: Evaluating the Perception of Regional versus Branch Level Employees. Bulletin of Business and Economics (BBE), 13(2), 647-655.
Rafaqat, M., Azad, F., Ahmad, S., Aijaz, K., Ikram, S. H., Bashir, U., ... & Saeed, S. (2024). Impact of Governance and Strategy Performance on Employer Branding. Research Journal for Societal Issues, 6(2), 852-867.
Rauf, O., Wang, S., Yuan, P., & Tan, J. (2015). An overview of energy status and development in Pakistan. 48, 892-931.
Raza, M. A., Khatri, K. L., Haque, M. I. U., Shahid, M., Rafique, K., & Waseer, T. A. (2022). Holistic and scientific approach to the development of sustainable energy policy framework for energy security in Pakistan. 8, 4282-4302.
Recorder, B. (2023). Pakistan’s power sector circular debt swells to Rs2.31tr in FY23. Business Recorder. https://www.brecorder.com/news/40263993/pakistans-power-sector-circular-debt-swells-to-rs231tr-in-fy23
Rehman, M., & Habib, S. (2023). Power Generation Policies, Governance Mechanism and Utilization of Indigenous Resources: A Case of Pakistan. 9(3), 253-262.
Robinson, H., Carrillo, P., Anumba, C. J., & Patel, M. (2009). Governance and knowledge management for public-private partnerships. John Wiley & Sons.
Roehrich, J. K., & Caldwell, N. D. (2012). Delivering integrated solutions in the public sector: The unbundling paradox. 41(6), 995-1007.
Saad, S. K., Elshaer, I. A., & Ghanem, M. (2021). Relational risk and public-private partnership performance: An institutional perspective. 20, 100614.
Sanderink, L. (2020). Shattered frames in global energy governance: Exploring fragmented interpretations among renewable energy institutions. 61, 101355.
Shair, W., Tayyab, M., Afzal, H., & Bashir, U. (2024). Determinants of Utilization and Satisfaction: An Empirical Analysis of Agricultural Extension Services in Pakistan. International Journal of Agriculture Innovations and Cutting-Edge Research (HEC Recognised), 2(4), 41-51.
South, A. J., Levitt, R. E., & Dewulf, G. P. (2017). Dynamic stakeholder networks and the governance of PPPs. In Advances in Public-Private Partnerships (pp. 499-515). American Society of Civil Engineers Reston, VA.
Sovacool, B. K., & Florini, A. (2012). Examining the complications of global energy governance. 30(3), 235-263.
Sridharan, S., Singla, H. K., & Kariappa. (2025). An Investigation of Corruption in Public-Private Partnership (PPP) Projects from Project Life Cycle Perspective. 1-18.
Syed, J., Mahmood, S. K. A., Zulfiqar, A., Sharif, M., Sethi, U. I., Ikram, U., & Afridi, S. K. (2020). The construction sector value chain in Pakistan and the sahiwal coal power project. 271-287.
Teisman, G. R., & Klijn, E. H. (2002). Partnership arrangements: governmental rhetoric or governance scheme? , 62(2), 197-205.
Ullah, K., Raza, M. S., & Mirza, F. M. (2019). Barriers to hydro-power resource utilization in Pakistan: A mixed approach. 132, 723-735.
Vahdatmanesh, M., & Firouzi, A. (2018). Price risk management in BOT railroad construction projects using financial derivatives. 23(3), 349-362.
Valasai, G. D., Uqaili, M. A., Memon, H. R., Samoo, S. R., Mirjat, N. H., & Harijan, K. (2017). Overcoming electricity crisis in Pakistan: A review of sustainable electricity options. 72, 734-745.
Van Garsee, S. (2008). Public-private partnerships, concessions and public procurement law. 3rd International Public Procurement Conference Proceedings,
Waleed, M., & Sajjad, M. (2023). Warming Cities in Pakistan: Evaluating Spatial–Temporal Dynamics of Urban Thermal Field Variance Index Under Rapid Urbanization. In Climate Change and Cooling Cities (pp. 67-82). Springer.
Wang, H., Xiong, W., Wu, G., & Zhu, D. (2018). Public–private partnership in public administration discipline: A literature review. 20(2), 293-316.
Warsen, R. (2021). Putting the pieces together: Combining contractual and relational governance for successful public-private partnerships.
Wu, A., Wang, Z., & Chen, S. (2017). Impact of specific investments, governance mechanisms and behaviors on the performance of cooperative innovation projects. 35(3), 504-515.
Wulandhari, N. B. I., Gölgeci, I., Mishra, N., Sivarajah, U., & Gupta, S. (2022). Exploring the role of social capital mechanisms in cooperative resilience. 143, 375-386.
Xue, J., Yuan, H., & Shi, B. (2017). Impact of Contextual Variables on Effectiveness of Partnership Governance Mechanisms in Megaprojects: Case of Guanxi.
Zenger, T. R., Lazzarini, S. G., & Poppo, L. (2000). Informal and formal organization in new institutional economics. In The new institutionalism in strategic management (pp. 277-305). Emerald Group Publishing Limited.
Zhang, L., & Huang, S. (2022). Social capital and regional innovation efficiency: The moderating effect of governance quality. 62, 343-359.
Zheng, J., Roehrich, J. K., & Lewis, M. A. (2008). The dynamics of contractual and relational governance: Evidence from long-term public–private procurement arrangements. 14(1), 43-54.
Zheng, S., Zhou, X., Tan, Z., Liu, C., Hu, H., Yuan, H., . . . Cai, X. (2023). Assessment of the global energy transition: Based on trade embodied energy analysis. 127274.
