Cabinet meeting: Short on ideas, govt unveils ‘new’ energy plan

Extra day off and early market closures proposed.

ISLAMABAD:

Fearing that the temporarily controlled power crisis might erupt again, the cabinet has approved a bold – and perhaps overly ambitious – energy conservation plan. The proposal has three main aspects: two weekly holidays, the early closure of businesses, and a recovery campaign on defaulters who collectively owe more than Rs300 billion in unpaid electricity bills.

The decision to observe two weekly holidays in the provinces will be taken by the Council of Common Interests (CII), a powerful constitutional body set up to resolve disputes among federal units. Punjab was the only province to categorically state its opposition to the idea, but with murmurs of disapproval from the Khyber-Pakhtunkhwa government as well, it seems the plan still has a long way to go before it runs on the ground.

(Read: Daylight saving, 2-day weekend back on the table)

The main branches of commercial banks would be exempt from the extra weekly holiday, allowing business to function as usual in the industry. A comprehensive policy regarding this will be framed shortly in consultation with the central bank.

Chaired by Prime Minister Yousaf Raza Gilani, Wednesday’s cabinet meeting also decided to dissolve the Pakistan Electric Power Company (Pepco) this month and appoint professional management in distribution and generation companies, a move that highlights a rising trend of using the private sector for energy solutions.

(Read: Not so independent - Power producers to pay more for gas supply)

It was not clear how the power sector would be managed in the absence of Pepco. Insiders said the government would use a transitional team of experts for at least six months before establishing a new institution.

The cabinet also asked provincial governments to ensure that businesses and commercial areas closed at sunset and marriage halls at 10pm.

A government handout said that the PM had directed all defaulting ministries, divisions and departments to pay their electricity dues immediately or their power connections would be cut off. “A campaign will be launched for recovery of outstanding dues from private consumers within six months,” read the statement.

The handout also stated that possibilities for involving the private sector in the billing and metering of electricity consumption will be explored.

The cabinet also decided that a uniform tariff rate would be applied throughout the country, a move aimed at ending cross-subsidies in the sector. According to the handout, two months security deposit will be charged to new and defaulting consumers. Lifetime consumers using up to 100 units of electricity will be exempt from paying a security deposit.

Finance Minister Dr Abdul Hafeez Sheikh said the power crisis had hurt national economic growth, industrial production and social life. However, despite the measures proposed by his High Power Committee on Energy, there seems little hope that power cuts will end in the near future.

The PM has apparently asked the ministerial committee to submit an improved plan to deal with load-shedding, indicating that no immediate end is in sight. The PM also asked the energy committee to come up with specific financial plan at the next cabinet meeting.

Published in The Express Tribune, October 13^th, 2011.