KARACHI:
The IMF has completed its review of Pakistan and has approved a loan with the instructions to reduce inflation and increase electricity and gas tariffs for the public. On the other hand, ADB, OPEC Funding, Islamic Trade Finance and Saudi Development Fund are additionally providing loans for the construction of new hydropower stations in Pakistan.
It must be known that Pakistan’s maximum power usage is 20,000 MW, while the production capacity is 45,000 MW, for which the Government of Pakistan has to pay monthly fixed charges, called capacity charges. According to this, electricity in Pakistan will cost twice as much because of the extra production capacity. But to justify keeping old power plants active beyond their contracts, the government had to create a fake load-shedding issue. Following this, the government was selling even less than 10,000 MW due to the prescribed 8-hour load-shedding across Pakistan because it had to pay for 45,000 MW generation. This has created an imbalance in payments coming in and payments going out, which is now called the circular debt.
The government must be urged to fix this complicated issue by ending contracts and payments to 25,000 MW old thermal power plants, but the international organisations responsible for funding are simply overlooking this issue and funding even more power plants on loans to increase this imbalance even further. This is causing a direct impact not only on Pakistan’s economy, but every citizen’s life as well. As a result of this crisis in imbalance of power supply, the net produce of our industries is going down the hill and will continue to.
While the people of Pakistan have been suffering for many years from this fake load-shedding problem, there is no hope that the situation will improve in the foreseeable future. Interestingly, all this while the stakeholders have been busy minting billions by selling generators, diesel fuel, solar panels and UPS batteries. Much to our regret, this vicious cycle will continue destroying the country and weakening its foundations till the time the IMF and other organisations will continue giving us loans.
Shahryar Khan Baseer
Islamabad
Published in The Express Tribune, April 10th, 2024.
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