What the provincial government really wants is for K-P to get cheaper electricity and for the rest of the country to pay far more than it currently does. PHOTO: FILE
is not sensible, one that is likely to spark inter-provincial tensions that the federation can do without. While we support devolution of more authority to the provinces and believe that it is reasonable for the provinces to demand that the energy sector be handed over to them for regulation and management, the reason the K-P government is demanding that it be handed over those is more than just a simple demand for greater provincial autonomy.
What the provincial government really wants — something that PTI leaders have been openly telling their constituents — is for K-P to get cheaper electricity and for the rest of the country to pay far more than it currently does. The province is currently the location of much of Pakistan’s hydroelectric production capacity, which of course, is the cheapest form of electricity in the country. The cheaper production cost of hydroelectric power is the reason why electricity bills in Pakistan are much lower than they would be had the dams in K-P not existed.
The PTI wants to ensure that consumers in the province are given access to that cheap electricity — and pay only for the cost of generating hydroelectricity — while the rest of the country pays for much more expensive thermal electricity. Effectively, the K-P government believes that it is currently subsidising electricity costs for the rest of Pakistan and wants to stop the deal. There are many, many reasons why this view is seriously mistaken, and the K-P government would be well advised to drop this demand.
Firstly, there is the very nature of hydroelectricity: it is very seasonal, producing far more in the summer than in the winter months. Yes, K-P would pay far less for its electricity in the summer, but it would also lose about half its electricity supply in the winter. In those months, the province currently relies on electricity produced from natural gas in Sindh and Balochistan, and power plants based in Punjab. The harsh reality for K-P is that it is nowhere near energy independent. The deal it currently has with the rest of the country works for a reason: yes, K-P pays higher prices, but it also gets a more consistent supply of electricity. And when it comes to electricity, the K-P government is far from innocent victims of an overbearing federal government. While it is true that Islamabad owns the utilities in the province, those utilities also have the second-worst line loss rate in the country (topped only by Balochistan), and responsibility for the enforcement of laws against electricity theft lies firmly with the provincial government. Indeed, the federal government has offered to turn over the management of the Peshawar Electric Supply Company (Pesco) to the provincial government if it so chooses, but the PTI has been saying that it would be meaningless without also being given management over power generation capacity.
We believe that in this case, the federal government’s demand is perfectly reasonable: show yourself capable of running the toughest part of the electricity system (distribution) before asking to manage the easiest part (generation). If Pesco only had to pay for hydroelectric power, its profit margins would be so large that it would have absolutely no incentive to take any action against electricity theft. That would be tantamount to a subsidy for people who steal electricity in K-P, paid for by law-abiding citizens everywhere, including those in other provinces. In the name of provincial rights, the PTI is effectively asking for a freebie. The party should be careful in making such demands. Its voters in other provinces are unlikely to take kindly to higher bills for no reason.
Published in The Express Tribune, December 30th, 2013.
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COMMENTS (12)
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Awesome! Everyone is fighting over scraps!
If they want Pti govt of KPK can purchase Tarbela Dam from the people of Pakistan (through Federal govt) including Land, equipment & human resource each of which was purchased by the people of Pakistan including every inch of land. Pti should concentrate on grand theft electricity going on in its jurisdiction & work on putting up its own power plants.
Kalabagh = 3800 MW Cashma I & II = 300MW + 300MW Cashma III & IV = 340 MW + 340 MW Cashma V = 1000MW Cholistan Solar Park = 1500 MW Nandi pur Thermal = 425 MW Chicho-ki-Malian = 950MW
So guys, take it easy. these are some of the new power sources planned inside Punjab on top of existing ones which makes Punjab self-sufficient..
you should also start counting the tonnes of wheat and rice and other agri produce that KPK or Sindh can produce and would need desperately.
KPK should get tarbela and Warsak.
KPk should also get Karak and Kohat gas.
Sindh can also keep their Thar Coal and gas.
Balochistan can also get full control of its gas.
And I truly support all of the above.
B ut after all of above, will you guys then allow Punjab build Dam(s) Kalabagh or Sabzbagh and many others wherever it wants inside Punjab territory? Will Punjab also allowed to keep and ell its wheat, rice, cotton and vegetables to the highest bidder in the world? rigt now, Punjab just does not store the wheat of whole of Pakistan but also supply them at subsidized rate.
Is it fair that KPK has to import energy at high rates and also import a lot of agri at high "market" rates? Market rates that are higher than normal due to manipulation and corruption. The benefits of the higher agri prices do to some extent hit the laborers and middle income group (and definitely the land owners), increasing demand and growth in the province... but what does KPK get out of it ??? Nothing except higher prices. So shouldnt they get something out of the resources they do have??
The federal government of Punjab (no thats not a typo) needs to open their eyes and start talking to all stakeholders to reach and equitable solution. Its time for national reconciliation. The election results were undoubtedly the worst possible outcome for the country. Having a confused punjabi based party leading the country is a disasterous outcome. If they were willing to take positive steps (or even any steps at all) it would have been ok but they continue to put their head in the ground and hope things get better.
It is clear that days of Punjab and Sindh enjoying a joy ride +++++++++++++++++++++++++++++++++++++++ are getting over. A more equitable regime is called for.
" If Pesco only had to pay for hydroelectric power, its profit margins would be so large that it would have absolutely no incentive to take any action against electricity theft. "
Once all KP gets electricity ..where is the need to steal?
KP will use the excess money to build thermal plants, use its gas reserves too... KP will become more than energy independent. It can "export" electricity to other provinces and to Afghanistan for more profit!
For more than 45 years K-P has been subsidizing the rest of the country like Baluchistan has with their gas, and it is time that K-P should own their production and distribution of electricity, if there will be any shortages in winters then K-P will have to pay extra to buy from other province which is a fair deal because they will have enough resources to pay for it. Why Baluchistan and K-P is lagging in development because their resources has been gobbled up by others without paying fair share for it. Let them control their own resources and be able to buy needed commodities from others from the income of their resources.
KP government is also holding negotiations with Chinese Companies to build gas fired thermal power plants in the districts of Kohat and Karak from where gas is supplied to Punjab as well.
". .. Yes, K-P would pay far less for its electricity in the summer, but it would also lose about half its electricity supply in the winter. In those months, the province currently relies on electricity produced from natural gas in Sindh and Balochistan, and power plants based in Punjab."
Please, also mention that KP also produces more Natural Gas than its demand and can easily use the surplus Natural Gas for the production of Electricity and which is already under consideration and a soon-to-be executed plan.
So, a humble request to the writer to please refrain from showing only one side of the picture.
The article omits an essential detail; KPK gets royalties for Tarbela and Warsak dams. Should they get power generation they would lose on royalties. Of course Sindh and Balochistan would reciprocate with a similar deal on gas with #KPK being on the losing end after a temporarygain.