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A dark future

BY IRFAN HUSAIN / 5 July 2007

PAKISTAN’S chronic power shortage is now assuming critical proportions. And what is worse than the unending electricity breakdowns is the lack of any planning to correct the situation.

Not all that long ago, there were many discussions about selling surplus electricity to India. Already, that moment seems an eternity away. With relentless population growth and economic expansion, there is a growing and entirely predictable shortfall between the supply and demand of energy.

The consequences of this crisis is available in the shape of the recent riots in Karachi, when suffering citizens finally lost their temper and took to the streets to protest the unending power cuts. But apart from discomfort and lost tempers, there is a direct economic cost of this growing gap. According to economist Shahid Javed Burki, the projected shortfall will result in a lower GDP per capita rise. The reduction in earning per head directly attributable to power availability will be $225 by 2020.

In his paper called ‘The Weight of History: Pakistan’s Energy Problems’, Burki gives an overview of our past and present performance in the energy sector, and discusses what needs to be done. Published in “Fuelling the Future”, a compilation of papers published by the Woodrow Wilson International Centre, Burki’s article focuses on the failure of political will to undertake the policies necessary to meet our energy requirements:

“During this period of economic stabilisation [1999-2002], the IMF forced constraints on the public sector, and the share of public sector development program (PSDP) declined to a historic low of two per cent of GDP – it had reached almost 11 per cent under Zulfikar Ali Bhutto (1971-77). Energy, and electric power in particular, was one sector that suffered.”

When Benazir Bhutto’s government approved a number of independent power projects (IPPs) during her second stint, there was a hue and cry over alleged corruption. Opponents vociferously denounced the deals. Nawaz Sharif, who followed BB into office, made it his business to hound the IPPs. But imagine life without them: today, they supply over 30 per cent of Pakistan’s electricity.

And after the way HUBCO was hassled by the general in charge of Pakistan’s Water and Power Development Authority (WAPDA), foreign interest in Pakistan’s energy sector declined. According to Burki: “His [Nawaz Sharif’s] government … harassed the IPPs and brought an end to the flow of foreign direct investment into the energy sector…”

Recently there was some fresh investment in the shape of the Karachi Electricity Supply Corporation (KESC) sale, but with WAPDA unwilling or unable to meet its commitments to supply power to the Karachi power company, the recently privatised firm is in deep trouble.

This summer, there was a period when the gap between supply and demand touched 3,000 megawatts (MW). Things will only get worse. According to the Planning Commission, while supply equalled demand in 2005, the shortfall will grow to 3.2 million tons of oil (TOE) equivalent in 2010, and 21.5 TOE in 2020. We all know that the claim that supply and demand were in balance two years ago is false. But then our planners in the air-conditioned premises of Islamabad’s secretariat were never in touch with reality.

A major reason for this situation is that Musharraf has failed to add a single megawatt to the national grid during his eight years in power.  Despite his endless talk about the need for dams, the hype has remained limited to feasibility reports and seminars. In the private sector, potential investors have been put off by the unrealistically low tariff offered by WAPDA. At the same time, civil servants have been reluctant to take the initiative for fear of being targeted by NAB, the national accountability bureau that has much to answer for.

NEPRA, the official regulatory body for the power sector, does not have the autonomy it needs to impose a rational price structure. With hydro-electric projects stalled due to a lack of political will and consensus, and thermal projects unable to get off the ground due to bureaucratic hesitation and lack of private-sector interest, a bigger crisis looms large on the horizon.

As the KESC privatisation has just demonstrated, the private sector does not have a ready answer for all our problems. There must be a sound plan based on political consensus that involves all the stakeholders. But the official Medium-term Development Framework 2005-2015 has been condemned by Burki as ‘a weak document in terms of laying down what the government needs to accomplish in order to address the various structural weaknesses the economy faces in the early 2000s’.

Despite these problems, Prime Minister Shaukat Aziz still had the gall to promise that his government would “bring electricity to every village in the country by 2007 under the Khushal Pakistan Program.”

There has been much talk about the need to tap alternate and renewable sources of energy like wind and solar power. A London-based friend who has been trying to set up a privately financed wind farm for years says he has been constantly thwarted by politicians, generals and bureaucrats. He has been asked to pay off sundry individuals, apart from being offered unrealistic rates for the electricity he and his partners hoped to produce.

Disgusted, he has given up. But he does inform me that during the time he wasted exploring the possibilities, the global demand and orders for windmills and solar panels has shot up with the rise in oil prices, as well the growing concern over greenhouse gases produced by burning fossil fuels. So even if somebody got approval to set up a wind farm or a solar power facility, it would take years before the project started producing electricity.

The Lakhra coal reserves in Sindh have generated endless talk about a coal-powered power plant. Indeed, all this hot air could have produced a few megawatts of electricity. Although there are technical processes being developed to handle the high moisture content of the coal, the project remains a pipedream.

Pakistan’s nuclear ambitions are all weapons-oriented, so nobody’s going sell us reactors to generate electricity. Thus, while our ancient reactor in Karachi produces slightly over two per cent of our electricity, it is doubtful that this percentage will ever increase.

So how are we going to meet our rapidly growing energy needs? Realistically, the future seems bleak. Although official documents project a rosy 7.5 annual increase, there is little discussion of where this additional power is going to come from. Talks with India and Iran over the gas pipeline drag on. And given the continuing unrest in Afghanistan and Balochistan, a gas pipeline from Central Asia is unlikely in the medium term. It would appear that from now on, every summer will be a long, hot summer.

Irfan Husain is an eminent Pakistani writer based in London. He can be reached at irfan.husain@gmail.com

 
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