No end in sight for Pakistan's energy crisis

By AFP
Published: August 8, 2012
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It's a management crisis born out of indecisiveness, procrastination, not taking timely decisions, says Shahid Sattar. PHOTO: MOHAMMAD NOMAN / FILE

It's a management crisis born out of indecisiveness, procrastination, not taking timely decisions, says Shahid Sattar. PHOTO: MOHAMMAD NOMAN / FILE

ISLAMABAD: An endemic energy crisis blamed on years of mismanagement in Pakistan is crippling the economy and making millions of lives a daily misery.

Six weeks after Prime Minister Raja Pervaiz Ashraf promised that the electricity shortage would be his top priority, blackouts have reached a peak – reportedly up to 16 hours a day in urban areas and as much as 22 hours a day in the countryside.

But with political posturing becoming more acute as the weak coalition stutters towards general elections, there is no quick end in sight.

Unprecedented power failures blacked out over half of India for two days last week, affecting more than 600 million people when three national grids collapsed.

But in Pakistan, shortages day in day out highlight chronic underinvestment in infrastructure, long-term planning sacrificed to short-term expediency, lack of leadership, cronyism and corruption.

For ordinary people, it is almost unbearable, particularly during Ramazan.

Peak demand for electricity in the summer is around 18,000MW, with a third of that coming from air-conditioning, but power companies only manage to supply 13,000 to 14,000MW.

Angry protests and riots erupt every few days and the central bank has warned the energy shortages have effectively put a ceiling on economic growth.

The government’s Planning Commission says power cuts shaved three to four percent off gross domestic product (GDP) in the financial year 2010-11, with industry bearing the brunt.

At the heart of the problem is so-called “circular debt”, which the commission says stood at $4.4 billion in 2011-12.

The dual effect of the government setting low electricity prices and customers failing to pay for it means state utilities lose money, and cannot pay private power generating companies, which in turn cannot pay the oil and gas suppliers, who cut off the supply.

“It’s a crisis of management, a crisis which has been born out of indecisiveness, born out of procrastination, not taking the decisions required at the right time,” said Shahid Sattar, the Planning Commission’s member for energy.

He dates the problem to the rule of military strongman Pervez Musharraf, when a massive boom in demand was not matched by investment in new power stations.

Raja Pervaiz Ashraf, burdened by corruption allegations from his time as water and energy minister but sworn in as prime minister on June 22 after the Supreme Court sacked his predecessor, promised to fix it.

In mid-July, a Rs12 billion bailout led to a noticeable let-up in the blackouts, but since then cuts have been as bad as ever.

Opposition leaders have sought to make hay, with Punjab Chief Minister Shahbaz Sharif of the Pakistan Muslim League – Nawaz (PML-N) backing protests and complaining vociferously that his province is suffering an unfair share of the power cuts.

With polls expected by April and rivalry fierce between the PPP and the PML-N, led by Sharif’s brother Nawaz, there is little appetite for cooperation even on what analysts agree is a “genuine national crisis”.

But neither is there a quick solution for whoever wins. The government needs to pay its bills, but the country also needs to generate more power.

Major projects such as the $12 billion Diamer Bhasha dam, which is expected to generate 4,500MW, will not come online for another five or six years.

The rivers and valleys of the mountainous north may offer more than 50,000MW of untapped hydroelectric potential, but Sattar says power generated from it could be unreliable and cannot guarantee year-round supply.

Coal reserves have been found in the Thar desert, but the quality is uncertain and international donors are unwilling to pump money into such an environmentally-damaging form of energy.

The government is keen to develop nuclear power as it tries to wean itself off expensive imported hydrocarbons – the country spends 7.5 percent of GDP on buying fuel, according to the Planning Commission.

There are currently three nuclear plants generating a total of 740MW of power and there are plans to expand this to 8,800MW, but only by 2030.

Saeed Alam Siddiqui from the Pakistan Atomic Energy Commission said two new reactors to be built by the end of 2017 would generate an extra 680MW.

But as Pakistan is not party to the Nuclear Non-Proliferation Treaty, it is excluded from trade in nuclear materials and technology and can rely only on its neighbour China for help.

Parallel efforts to reform publicly-owned generating and distribution companies have met fierce resistance – an attempt to replace the CEOs of power companies last year ended in failure after industrial action.

With Pakistan’s 180 million population growing rapidly and demand rising by around 1,500 MW every year, a daunting battle lies ahead.

If no solution is found and violent protests continue, political analyst Hasan Askari warns Pakistan’s ability to function as a state could be under threat.

“If these people can challenge one government they can challenge any government,” he said. “Violence and agitation become the normal political style and you never have stability.”

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Reader Comments (15)

  • Ahmad
    Aug 8, 2012 - 12:33PM

    If our “great” leaders bring back the assests they looted from this nation and have some mercy on this nation, there will be no energy crisis.

    When there is a will, there is a way.
    When there is no will, there is no way.

    Recommend

  • Polpot
    Aug 8, 2012 - 12:47PM

    The next elections , PPP should ask a mandate for 120 years
    +++++++++++++++++++++++++++++++++++++++++++++
    Thats the time required to solve the Energy Crisis in Pakistan.

    Recommend

  • Nasir Mahmood
    Aug 8, 2012 - 12:51PM

    To tackle the national crisis, EC make it binding every political party to submit policy to solve this on emergency basis after coming into power after the election.

    Recommend

  • JB
    Aug 8, 2012 - 2:00PM

    Who’s to say that the country is functioning as a state. The country is being headed by politicians who are there only for themselves. Why not explore solar or wind energy? What is the think tank doing? Are they drunk? Why can’t they explore cheaper methods of electricity generation? I will tell you why…Cheaper methods would mean that the country may most probably have the means to generate energy on its own. That would mean no financial aid. That would mean no share to go into our so-called-leaders’ pockets!

    Recommend

  • Enlightened
    Aug 8, 2012 - 2:42PM

    What happened in East Pakistan is likely to be repeated, as people from Pakistan shall cross over to India due to terrorists attacks, shortages of electricity and gas. India is already gearing up for refugee camps along its border.

    Recommend

  • Lahori
    Aug 8, 2012 - 2:48PM

    It is a painful truth that the next government will not be able to end the crisis at all. It is a mark of the ineptness and cronyism that the incumbent government has shown. Inshallah may there be early elections and hopefully a good leader arise that steers Pakistan out of trouble.

    Recommend

  • huma
    Aug 8, 2012 - 3:10PM

    two words: Kalabagh dam

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  • Gratgy
    Aug 8, 2012 - 3:40PM

    Unprecedented power failures blacked out over half of India for two days last week, affecting more than 600 million people when three national grids collapsed.

    Six hours on one day and four hours on the next does not make up two days of blackout

    Recommend

  • Ajamal
    Aug 8, 2012 - 4:07PM

    Enlightened said “India is already gearing up for refugee camps along its border.”

    Well, 1/3 of India’s population is already living in slums, worse than refugee camps any where in the world.

    Recommend

  • Ajamal
    Aug 8, 2012 - 4:10PM

    If demand is actually increasing by around 1,500 MW every year as this article suggests, Pakistan is doomed since no government can cope with this huge demand.

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  • Falcon
    Aug 8, 2012 - 5:29PM

    Of all the political parties, I would side with PTI on this issue at this point. They have very strong technocrat panel on the energy issue, which includes Asad Umar, Dr. Farid Malik, Jehangir Tareen (although a traditional politician but familiar with the energy business), and Firdos Naqvi. They have already given their energy policy and Asad is right in saying that we should push for coal based energy at any cost since we don’t have a choice. The problem is coal based energy issue is being politicized by foreign donors. Pakistan’s current coal energy generation is less than 1% of total production while many of the world’s largest economies are producing much higher energy levels and are relying more than 30% on coal within their energy portfolio. It is sad that all the burden of ‘environmental responsibility’ is being pushed towards poor countries like us while the world itself is pursuing energy security aggressively using all means possible.

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  • SS
    Aug 8, 2012 - 5:35PM

    “He dates the problem to the rule of military strongman Pervez Musharraf, when a massive boom in demand was not matched by investment in new power stations.” Yea he tried with Kalabagh Dam but what did you guys do?

    Recommend

  • Cautious
    Aug 8, 2012 - 8:15PM

    So what have you done to make sure people pay for the electricity? The American’s gave you the technology to determine who’s stealing electricity – have you installed it an put that to use. The answers to both questions are obvious. When you fix the above two problems then hire an outside consultant to tell you what rate is required for your utility companies to stay in business and have enough money to invest in infrastructure (shouldn’t be up to politicians) – raise your rate accordingly and most importantly have all of your leaders get on the same stage and explain why the dramatic increase in electrical rates is necessary and why anyone who doesn’t pay is going to be cut off. Won’t resolve all issues but at least it’s a start.

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  • Akshay, India
    Aug 8, 2012 - 10:48PM

    @Enlightened: You got to be kidding me. No one in India is making refugee camps and no one from Pak is coming to India. Stop being delusional.

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  • Aug 8, 2012 - 11:30PM

    Big talk and no show. What a grotesque imitation of doing good for the country by making tall, tall, and tall promises of energy self-sufficiency.

    Where are the manipulators of the energy crisis? In Pakistan. Still up to financial mischief and involving themselves in ‘mega defalcations’ of funds.

    The NAB itself is a toothless tiger and makes reports that are being thrown out by the Supreme Court. Why is there disenchantment in the NAB? The biggest manipulator of the energy crisis is the PM who is being checked by the apex Court. Let ten PMs be sent packing home, but the law and accountability must prevail.

    Salams

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