Govt to frame four-year energy plan for outages

ECC forms committee that will give proposals in next 2 months.

Zafar Bhutta July 24, 2014


The government is planning to frame a four-year integrated energy programme in an effort to end prolonged outages, a move that comes in the face of its failure to manage the energy sector properly and load-shedding of up to 20 hours a day, sources say.

A committee, constituted by the Economic Coordination Committee (ECC) of the cabinet in its meeting on July 17, would come up with recommendations for the integrated energy plan for generation, transmission and distribution, sources say.

The committee, to be chaired by Planning and Development Minister Ahsan Iqbal, will finalise the recommendations in two months.

Its members will be the chairman of Board of Investment and secretaries of the Finance Division, petroleum and water and power ministries. The Ministry of Water and Power will provide secretarial support to the committee.

Consumer demand for electricity has risen past 20,000 megawatts, though production stands at a meagre 13,000MW, showing a gap of 7,000MW and forcing the government to resort to widespread outages across the country.

Soon after coming to power in June 2013, the PML-N government announced a new energy policy to eliminate power outages in the next three years but it failed to bear fruit even after one year.

In the meantime, power tariffs were increased by over 31% for domestic consumers and subsidy was eliminated for consumers using more than 200 units.

However, blackouts are still there with people trying to cope with the darkness even in Sehr and Iftar timings during Ramazan.

Circular debt, called one of the major problems that beset the energy chain, has surged again to over Rs300 billion and receivables of power companies exceed Rs500 billion while Pakistan State Oil (PSO) is owed over Rs190 billion.

Corruption in power firms still goes unchecked and recovery of electricity bills has not improved much, which besides electricity theft are the main causes of losses suffered by the power companies.

According to officials, the failure of Pakistan Electric Power Company (Pepco) to clear its dues has prompted PSO to seek an increase in its credit limit in order to pay bills of international fuel suppliers.

PSO has defaulted on payments for five letters of credit (LCs) worth Rs26 billion to global oil suppliers because of delay in clearance of its outstanding bills and international banks are reluctant to clear the LCs. Even fuel suppliers are hesitant to provide oil without advance payments.

Officials pointed out that Pepco recovered Rs4 billion daily from power consumers but it was allocating only Rs200 to Rs250 million for payment to PSO on account of fuel supply.

Published in The Express Tribune, July 25th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.