Money Matters

The water course

By Ihtasham Ul Haque
Mon, 09, 16

As the Pakistan Muslim league-Nawaz (PML-N) tenure starts to slide downhill towards the next election, lofty promises and larger than life claims made by the ruling party before 2013 elections are becoming its worst nightmares. The government, therefore, seems to be making desperate efforts to deliver on mother of all promises in time – the end of power outages and load shedding by 2018.

Prime Minister Nawaz Sharif, while presiding over an important meeting last week, asked all the participants to make doubly sure that there were no blackouts much before the announcement of the new elections in 2018.

Battered by its missteps, the government appears to be panicking and has decided to further push its development agenda to meet its target of eliminating load shedding, which it believes, is once again going to be a major issue in the next election.

The ruling party, it is said, is cognizant of the fact that the Pakistan Peoples Party’s (PPP) massive defeat in the 2013 elections was because of the load shedding. Therefore, it wants 80 percent cut in blackouts in mid – 2017, while the remaining 20 percent could be removed little before 2018.

The question nonetheless is, will the government generate and add the 10,000MW of electricity in the national grid by 2018, as promised. There is scepticism about the current old and decaying power infrastructure, particularly the fragile transmission lines, taking the burden of additional 10,000MW of electricity.

Officials claim the transmission lines are being replaced. But many believe it is not possible without fresh budgetary allocations and billions of dollars in foreign investment.

The government is mainly banking on 3,600MW of electricity from LNG-based power projects, 1,410MW from Tarbela, and 969MW from Neelum-Jhelum hydro project. As the financial closure was achieved for the much delayed Neelum-Jhelum project, it is expected to be operational by 2017. The government is also hoping to complete the 1,350MW Sahiwal power plant before May 2018 under the umbrella of the China Pakistan Economic Corridor (CPEC).

There is development in hydropower for the first time in three decades. The present government is considering acquiring foreign expertise to develop new sites for setting up small, medium, and big hydropower generation projects.

In recent history, Egypt has made remarkable success to get rid of its acute power shortages by using indigenous resources and experts. The country plugged 13 percent demand and supply gap within two years in 2104. Last month Minister for Water and Power Khawaja Mohammad Asif met Egyptian Ambassador to Pakistan Sherif Shaheen and discussed the early possibility of acquiring local Egyptian power sector experts to help generate hydropower in the country. They also discussed new trade cooperation through Suez Canal and Gwadar port under the CPEC. For this, the Chinese authorities have also expressed willingness to cooperate, as it will offer them access to reach African and European markets in a big way.

“Hopefully Pakistani government will soon receive the Egyptian delegation of power sector experts, in the light of my meeting with your water and power minister,” Ambassador Shaheen said. The Egyptian cooperation, he said, is being sought by a number of countries aimed at generating hydropower in a record period of time. “We spent about $4-6 billion not only to meet our electricity requirements but also generate surplus power to exporting it to neighbouring countries.”

To forge improved trade and economic cooperation, particularly in the power sector and CPEC related projects, he would soon be meeting ministers for finance, planning, and ports and shipping to finalise issues relating to the power sector, and greater cooperation between the Suez Canal and Gwadar port.

However, he expressed dissatisfaction over the current level of $300 million annual bilateral trade. “I am looking forward to forge serious cooperation between the two countries which will, in the first place, benefit Pakistan to overcome its power shortages,” the ambassador said.  

Though a number of new coal-based and thermal power contracts were signed with Chinese companies, the 10 power plants of 6,000MW at Gadani near Karachi shutdown due to differences over the mode of payments, cast doubts on the plan to add 10,000MW by 2018.

The collapse of Nandipur power plant is another failure. According to the National Transmission Distribution Company, Nandipur project is generating only 230MW instead of 425MW, causing huge losses to the national kitty. Critics of the government, maintain that the project is not even generating 100MW of electricity, and that the recent destruction of its records due to fire speaks volumes about it.

There seems to be a consensus that power crisis cannot be removed without undertaking deeper energy sector reforms.

The good thing is that all government functionaries have lately been told to avoid giving dates as to when load shedding will end.

Punjab Chief Minister Shahbaz Sharif had been very vocal over the issue, and had even given dates when the constant blackouts will be over in both rural and urban areas. He is now keeping quiet, but the prime minister is often seen talking about the issue. He apparently fears that in case load shedding continues, his party may face defeat like the previous PPP government.

Ironically he skips mandatory constitutional meetings but holds regular meetings on development issues. He is not happy over the Supreme Court’s decision that asked the federal cabinet to ratify all the decisions of the Economic Coordination Committee of the Cabinet (ECC). The prime minister has directed the concerned authorities to file an appeal in the apex court to review its decision.  

The problem of chronic power shortage could not be resolved for the last many years, because the entire power system is outdated and requires meaningful institutional reforms. Wide ranging reforms are needed to cover the governance of the power sector entities and ensure the induction of new technologies like better and workable power meters and the pricing reforms.

Did the government cover these aspects in any power policy? The growing dependence on imported fuel oil for power generation is one of the factors hindering power production. Improving efficiencies and accurate billing is another important area that needs to be addressed. All this needs long term strategy and policy framework.

The electricity shortfall ranges from 6,000MW-8,000MW this year. With population reaching 200 million, successive governments failed to plan power generation.

The Nawaz government pledged to address the issue once and for all, but just focused only on thermal or coal fired power plants. The domestic inferior coal is not considered good to generate electricity; therefore, focus remained on expensive thermal power for which imported fuel is necessary.

Thermal lobby always manoeuvred governments when they decided to accord preference to hydropower generation. Time and again the people of Pakistan asked why no hydropower projects were planned after the huge success of Tarbela and Mangla dams. The 4,500MW Kalabagh dam, planned and approved in the 80s by major local and international institutions, was made controversial despite the World Bank approval of $5 billion funding.

About 40 percent water that goes to waste annually could have been utilised had there been no thermal lobby. Chinese and Indians have built hundreds of small and big dams and are mostly fulfilling their electricity requirements through hydropower generation.

Industry people are crying for want of uninterrupted supply of electricity and gas. Only recently they received some respite when the prime minister took some personal interest in the matter.

Major issues contributing to load shedding are theft and transmission losses. Other problems include inefficiency, corruption, mismanagement and faulty planning and its haphazard execution.

Successive governments avoided to focus on renewable energy and remained glued to thermal power generation through the infamous Independent Power Producers (IPPs).

It is high time to focus on hydropower generation. But will the thermal lobby allow such a move or it will continue to ruin any moves to provide inexpensive electricity, piling up the circular debt.

The writer is senior journalist based in Islamabad