The prime minister is due to meet with Finance Minister Abdul Hafeez Shaikh, Petroleum Minister Asim Hussain and Water and Power Minister Naveed Qamar to discuss the financial crisis in the power sector that is largely to blame for the 8,900 megawatt power shortage in the country. The chief ministers of all provinces are also expected to attend.
The meeting is a response to the latest escalation in the crisis that has seen Pakistan State Oil, the largest oil marketing company in the country, suspend its supplies to the power generation companies that has not paid about Rs155 billion in outstanding bills.
The company says it will not resume supplies till the power companies provide bank guarantees that they will pay the oil company. Banks, the power companies say, are unwilling to provide the guarantees owing to the already gigantic accumulation of circular debt in the power sector.
The power companies, in turn, are waiting for Rs210 billion from the state-owned Pakistan Electric Power Company (Pepco), the firm created by the government to manage the finances in the power sector, including the disbursement of subsidies promised by Islamabad.
“The government has no option but to pay the dues it owes the power sector to continue operations,” said Abdullah Yousaf, the chairman of the Independent Power Producers Advisory Council (IPPAC), an industry group.
Pepco officials estimate that about 39% of the current shortfall is due to PSO’s suspension of supplies. They claim that they have provided the oil company about Rs8 billion on Saturday to resume oil supplies to the Hub Power Company and the Kot Addu Power Company, the two largest electricity generation firms in the country. Total power production in the country rose to approximately 10,000 megawatts on Sunday, compared to 9,000 megawatts on Saturday, said Pepco officials. This compares abysmally, however, to the estimated demand of 19,000 megawatts.
Adding to the problem is the closure of the Chashma nuclear power plant, which was shut down owing to a technical fault.
“PSO wants to avoid accumulating receivables, which have now crossed Rs155 billion for the company,” said one source.
Published in The Express Tribune, October 3rd, 2011.
COMMENTS (21)
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@H.A. Khan: Wrong, you can fool them all the time
Yes, Pakistan will do JUST fine without international aid and expertise. Seems like they have everything figured out...
Humility and honesty is much more becoming than empty rhetoric and foolish displays of ghairat. The country is an absolute wreck and everyone with a ounce of honesty knows it! You need all the help you can get!!
@Adeel759: wheels of the economy move on a number of factors while extraordinary situations require extraordinary measures. kindly note i have referred to extremism and intolerance in the society due a number of reasons.
@karim. If terrorists spending time with their families will do away terrorism, why dont terror hit govt announce 5 days a week off. Wheel of economy wil move if people have money.
Spineless solutions is out come of Spineless Leadership and that is the result of Spineless Voters.
Two weekly offs would serve many social aspects besides energy saving. Growing extremism, intolerance will subside as people will spent time with their families.
Further, it would provide a boost to leisure activities thus moving the wheels of the economy through consumption and tourism.
They should hold the conference without electricity in lahore for 8 hours. Only than they would understand what needs to be done. Mehal main rehnay walay, gali muhalay kay maslay kia samjhay.
SAB SAY PEHLAY PAKISTAN. PAKISTAN ZINDABAD. AMEEEN.
When you are unable to do anything constructive - call a conference to fool the people. Why not ask the last minister of Power to explain what happened to the RPP's, why the circular debt is increasing, why the project for building small dams through indigenous means has not been given priority and a lot more. If the government does not have the will to act , any number of conferences will be useless.
Load shedding can be managed if people who are lawyers,specialist doctors.foreign expatriates and all pakistani from shopkeepers to bus drivers to beaurocrates stop electricity theft and pay taxes and become imandar cetizens.70 billion rupees spent on distributing banazer income support on ppp workers can be used on making new dams like bhasha dam and many small dams
Power cut from 14 to 22 hours even in big cities, is indeed criminal and which is highly detrimental to industrial production and economy. The Indian Punjab is taking lead in getting uninterrupted 24 hrs supply in all big cities and towns and 20 hrs in villages whereas the electric supply in all parts of India has improved substantially this year and even far flung villages are recieving atleast 12 to 16 hrs supply.
You can't produce sufficient power, can't put together proper emergency plan for flooding, can't put together a mosquito abatement program, Karachi in chaos, cede control of almost half the country to the Taliban, have an international reputation as the nexus of terrorism, your allies don't trust you, and the IMF won't give you loans - the list goes on and on. Maybe you should consider a change in management?
They should look for eco-friendly means and provide free/cheap electricity. Make more dams/ produce solar energy.
in the End press Release :
Pakistanis should try to understand this was all done by previous government
Thank you
people should come out and march to Islamabad and remove them from goverment , that they want.
Conference : The confusion of one man multiplied by the number present.
Simple reason for power crisis: Government is out of money and rationing fuel because you can't print out money and pay to foreign oil companies you need forex. This drama about crisis is just a red herring, the government is bankrupt hence paralyzed to do anything else but make empty promises.
Call an APC and blame the Americans for this also and do nothing, three years of your Government you have done nothing except politicking and fooling the nation by keeping them involved in non-issues
Bad management and bad leadesrship.. What else can we say? I wish we could resolve this load shedding problem by addressing the strange issue of "circular debt".. The economy of the country is at stake. We are thrown back into dark ages..
Energy conference, national issues conference, flood conference, election conference, karachi situation conference, aid conference, security conference .. duhh! all they do is just sit in their air conditioned halls and poke each other! they all get free fuel for their cars and unlimited free electricity for their mansions! NO ONE CARES.
Wow.The PM just realised that there is severe power shortage.Was he and his team not aware.Was this issue not discussed in Cabinet meetings?.What was Minister of power doing...napping.
You can fool all the people some of the time and some of the people all the time but you cannot fool all the people all the time'?