Energy sector woes

Finance Minister Ishaq Dar recently told the Ministry of Water and Power to expedite work on ongoing energy projects as the PML-N makes a desperate attempt to keep its election promise of ending power outages by the end of its tenure. Despite clearing billions in circular debt as soon as it came into power, the amount owed has gone up again. Power outages are still persistent and present a grim picture in rural areas, while ongoing energy projects are sometimes stalled or face cost escalations. The import of LNG would mitigate some of the crisis, but the far-fetched promise of ending power outages is a long way off. Mr Dar conveyed the prime minister’s desire for an update on the progress of the projects and gave the directive to expedite work and the power ministry gave a much-expected response — work is on track, sir.

However, in three years of the PML-N rule, very little work has been done on reforming the power sector. Most of the talk has revolved around adding megawatts to the national grid and signing new energy agreements. While the slightly improved security situation has helped in getting foreign investors on board, the distribution and transmission networks remain obsolete. Experts claim that Pakistan doesn’t have the capacity to bear additions to its electricity network because of its obsolete transmission set-up. Chunks of rural areas continue to remain off-grid and those that are connected suffer through prolonged power outages. Cities also continue to face breakdowns. Power companies function the same way they have in the past — proving helpless and inefficient in resolving any crisis. Tariffs continue to rise to compensate for any losses that occur in any other sector of the economy, and subsidies have been rolled back. We hope that work on ongoing energy projects is completed in the given time frame — it will take some doing — but the evidence in the past three years indicates that is an unlikely outcome.

Published in The Express Tribune, July 6^th, 2016.

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