Loadshedding

Capital suggestion

Is loadshedding a generation-capacity issue or a governance issue? That indeed is the mother of all questions. Let us begin with three facts. Fact one: the installed power generation capacity stands at 23,101MW (as per the Pakistan Economic Survey 2015-16). Fact two: on March 28, peak generation stood at 11,055MW. Fact three: on March 28, the government managed to utilise a mere 47.8 percent of the installed capacity.

Conclusion: The country-wide loadshedding that took place on March 28 – for at least sixteen hours in Punjab’s rural areas and for a minimum of six hours in Punjab’s urban areas – was not a generation-capacity issue. Clearly, the real disease is ‘mis-governance’ while the government is treating capacity. That’s like a medical doctor treating the liver while the malfunctioning is with the heart of the patient. Clearly, the patient will never recover.

Here’s the list of power plants that are lying idle because of mis-governance (the government continues to pay capacity payments to all of them): Uch Power, Nandipur, Halmore, Japan Power, Sepcol, Kohinoor and Bhiki. That’s a total of 2,784MW of idle capacity.

Here’s the list of power plants that are running at 50 percent of capacity because of mis-governance: AES, Nishat and Atlas. That’s an installed capacity of 787MW running at 50 percent. Imagine the Guddu Thermal Power Plant with an installed capacity of 2,220MW is producing 350MW because of mis-governance. Clearly, the current loadshedding is not a capacity issue. And the only thing that the government is bent upon is increasing the capacity. Clearly, the patient will never recover.

On March 28, country-wide demand, excluding Karachi, stood at under 15,000MW. And that translates to less than 65 percent of the installed capacity (meaning: if the government manages to utilise 65 percent of the installed capacity there will be little or no loadshedding). Here’s another stinger: On March 28, the system produced 11,055MW but the distribution companies were supplied around 9,700MW. That’s 1,355MW getting lost in thin air, euphemistically ‘line losses’, but in reality ‘mis-governance’.

The real problem once again, euphemistically is ‘circular debt’, which in reality is ‘mis-governance’. To be sure, as the government increases the installed capacity, the spectre of circular debt is bound to grow bigger and become ever more threatening.

Take an automotive manufacturing plant that produces 100 cars a day, for instance. Of the 100 cars being produced a day, 20 are stolen. Of the 100 cars being produced a day, 10 are sold but the sale proceeds are never recovered. This plant is bound to go bankrupt in no time. Let’s say that the government of Pakistan owns that plant. Ingeniously, the government of Pakistan’s solution to the problem is to set up another manufacturing plant (rather than putting an end to the theft and the issue of non-recovery).

Roll back to March 7, 2013. The PML-N came out with a 104-page election manifesto. The term ‘energy’ appeared 42 times: the PML-N made 42 power sector-related promises. In 2013, the circular debt stood at Rs480 billion. In 2017, the circular debt stands at Rs414 billion. In 2014, line losses stood at 18 percent. There’s been no improvement. In 2014, recovery stood at 87.8 percent. There’s been no improvement.

Loadshedding is not a generation-capacity issue. Loadshedding is because of mis-governance. The government is treating capacity; and mis-governance continues. The patient is not going to recover.

The writer is a columnist based in Islamabad.

Email: farrukh15@hotmail.com

Twitter: @saleemfarrukh