YOU may not win an election by providing regular electricity, but you can easily lose one by failing to.
At the last general elections in 2008, the ruling PML-Q got hammered because of its failure to add to the national grid despite rising demand. The resulting loadshedding was a principal cause of its rout.
I recall all too well the claim of the ex (and forgotten) prime minister, Shaukat Aziz, that he would export surplus electricity to India. Luckily, negotiations broke down over the price, otherwise we would no doubt have been sued for breach of contract.A friend in England recently asked me about the riots in Punjab over the extended power cuts that were running to 20 hours in some areas. When I got to the notion of ‘circular debt’ in my explanation, I could see his eyes glazing over. He just could not cope with the concept of the government not paying its electricity bills.
And this, of course, lies at the heart of the present crisis. If public and private power-generating companies aren’t paid in time, they can’t pay their bills for the oil and gas they need. And when suppliers aren’t paid, they are forced to cut deliveries. This reduces power availability, and the lights go out across the country. Simple cause and effect.
In a recent article in these pages (‘Is circular debt the real issue?’ By Salman Khalid and Kamal Munir), the authors have argued that the real problem goes back to 1994 when the traditional 70:30 hydro-thermal ratio was changed, and a very generous tariff policy for independent power producers (IPPs) announced. Khalid and Munir argue that we need to increase hydro-electrical capacity, and use indigenous coal to generate power.
There is considerable merit in this argument. However, these are long-term solutions: people sweltering in the dark are
unwilling to wait for a dysfunctional government to do what several of its predecessors have been unable to for decades.
unwilling to wait for a dysfunctional government to do what several of its predecessors have been unable to for decades.
Building dams takes a lot of time and money, neither of which we have. And coal from Thar is reportedly of poor quality with a low calorific content. In any case, it will be several years before it can actually be used for power generation.
Even though Khalid and Munir term circular debt a ‘red herring’, it is nevertheless devastating the economy and has serious social and political implications. In a recent article on Pakistan’s energy crisis, the Economist came up with a figure of $6bn as the amount outstanding in the shape of circular debt. It also cites an estimated loss of three to four per cent of GDP as the cost of the power shortages.
The bankruptcy of the government’s energy policy was laid bare when the finance minister recently announced the federal cabinet’s plan to tackle the crisis. This included the decision to shut down offices for two days a week, and to close markets at sunset. Neither step has been greeted with rapturous applause by either the provincial governments of Punjab and Khyber Pakhtunkhwa or the business community.
One little-reported aspect of the whole mess was highlighted in a series of cables sent by the previous US ambassador to Pakistan, Anne Patterson. Revealed by WikiLeaks in this newspaper, they focus pitilessly on the cumbersome bureaucracy that is choking off any possibility of improvement. Patterson wrote in April 2008:
“The unbundling of the power sector has resulted in the formation of 14 corporate entities; three power-generation companies, one national transmission and power despatch company (NTDC) and nine distribution companies. These companies are each working under independent boards of directors. Yet, Wapda still controls the finances of all these companies and in turn must get permission from the Ministry of Water and Power to make payments to each entity.
“…While many proposals exist for creating new power generation, turf wars for operational control among the ministries and agencies have seriously slowed or completely halted the approval processes. …Timely decisions were not taken to utilise all available resources and no agency or ministry has the lead in implementing the National Energy Strategy.”
The cables paint a dark but accurate picture of the fallout of this confusion and neglect:
“With massive blackouts affecting every region and every demographic, energy policy and shortages are daily front-page news. Not a single megawatt of electricity has been added to Pakistan’s national grid since 2000 despite record-breaking economic growth and population expansion. With economic and manufacturing capacity slumping due to power outages, unemployment is increasing while tempers and temperatures are rising.”
I know we hate hearing the truth, especially from the Americans, but I would urge readers to go through the WikiLeaks cables that can be accessed on this newspaper’s website.
The Economist has also commented on the confusion and corruption surrounding the energy shortfall: “…the government of Asif Zardari has done little as the energy crisis has grown, dithering over its strategy even as it cooks up new schemes for new power plants to enrich its cronies. In the process, the government has squandered billions of dollars.” Had a few of these billions been directed towards clearing the circular debt, people in Lahore and elsewhere would not have taken to the streets.
Apart from the issue of unpaid bills, the problem of electricity theft and transmission losses of an estimated 30 per cent of generated power has not yet been tackled seriously.
In a land blessed with fast-flowing rivers, there is no reason for us not to increase our hydel capacity to lower electricity cost.
But as we saw during the Kalabagh dam controversy, people are very sensitive about the location of water storage lakes:
nobody wants their backyards inundated. But more importantly, those downriver don’t want to see their share of scarce water
further reduced.
further reduced.
Thus, Sindh has good reason to fear a further depletion of the life-giving Indus if more dams are built upstream. Farmers have seen canals irrigating their fields dwindle over the years. There is a serious inter-provincial trust deficit that will have to be addressed.
Above all, we need clarity of purpose if we are to solve this perpetual problem. What we don’t need is bureaucratic confusion and foot-dragging. Even more importantly, we need fewer snouts in the public exchequer trough.
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