PHOTO: FILE
The power shortage is by far the biggest deterrent to economic growth in Pakistan. Add to that the fact that our energy mix has gradually tilted towards expensive power generation using furnace oil — from being heavily tilted in favour of hydropower two decades ago — as a result of which the government paid out over Rs650 billion in subsidies in the last fiscal year, which is not yet over.
Then there is the circular debt, also a malaise deeply rooted in the country’s beleaguered power infrastructure. According to an official of the water and power ministry, six power plants have been shut down due to this issue.
It is easy to see that the power sector and issues related to it are the biggest deadweight to our economy.
According to figures released by Nepra, the private sector is heavily investing in power generation and the bulk — about 80 per cent of this investment is directed towards cheap power like hydro or coal. Not only are they showing the wisdom to invest in the right areas, they have shown that they can raise the necessary finances to get this done and that they can get this done in a reasonable amount of time.
This is something the government should be doing instead of taking the easy way out and opting for expensive, short-term measures.
The Senate Standing Committee on Water and Power was recently informed that the Asian Development Bank has already offered financing for two blended coal thermal power plants. This is something the government should follow up on, to help resolve the power crisis.
Meanwhile, it is estimated that even if the incoming government does nothing to help the private sector in its endeavour to resolve the power crisis, but at the same time does nothing to interfere and delay it either, Pakistan will have significantly reduced its dependence on furnace oil in the next five years and also reduced the power generation shortfall.
Published in The Express Tribune, April 12th, 2013.
COMMENTS (4)
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@Abdullah: " Nothing can be worst than allowing private sector to monopolise the power industry. The private sector is only interested in making money/profit and soon electricity like water and milk will get out of the reach of the common man."
Monopoly is bad be it by the state or by the private sector and it is well experienced by all across the globe Private sector and maximization of profit is not be treated a a dirty word In state monopoly motivation is zero which deteriorate the services and increase the cost. . Why monopoly allow many players in the private sector to operate keeping the regulatory power with the state. In India privater players in power sector produce and a certain percentage over their production cost ( as assessed by the regulator) is allowed and still the electricity in India provided by private sector is comparatively much lower (if converted i PKR it will be Rs7.50 per unit.for commercial use. For domestic use it is further lower . This is when they have to invest in infrastructures too for distribution.. Let the private players and state go side by side. In my city electricity is provided by state and also by the private player. Industrial users prefer the connection from private player( though little costly) as it remains uninterrupted for 24 hours.
Shouldn't we privatize the country itself? Any country should be able to get it on rent - payable to the ruling elite. I cant see any other solution. If we have any infrastructure at all, most of it is due to British empire. We are letting history write that people in the region were better off in the colonial rule.
Nothing can be worst than allowing private sector to monopolise the power industry. The private sector is only interested in making money/profit and soon electricity like water and milk will get out of the reach of the common man.
Look at the price hike due to IPPs. What is needed is declaring power sector a public good and managed by the State on behalf of the people.
Now that is another matter that our state/system and current government is corrupt to core and no thinking.