Pakistan Power Policy Review

load sheddingLike citizens of any of the third world countries, Pakistanis are indebted to multilateral financial institutions i.e. World Bank, Asian Development Bank and above all IMF. World Bank helped in the construction of Mangala and Tarbella dams and Ghazi Brotha project. It also gave us independent power producers (IPPs), which are the major sources of electricity at present, Pakistan got the IPPs that operate in private sector and under ‘iron clad’ agreements.

All the power policies presented by the successive governments added to the miseries of consumers, prolonged outages despite persistent hike in electricity tariff in the name of recovery of full cost. This is mainly because of: 1) excessive reliance on thermal generation (mainly furnace oil), 2) rampant corruption, massive theft of electrify with the connivance of staff of utilities and failure in recovering outstanding payments, 3) highest losses are posted by distribution companies operating in the public sector, 4) circular debt continue to rise at a rate of Rs2 billion per day and 5) despite having around 20,000MW installed capacity output hovers around 15,000MW.

In the proposed policy emphasis is once again on adding new generation capacity, which is likely to result in another scam, people have not forgotten ‘Rental Power Scam’ of PPP government and distribution of nearly one trillion rupees to the IPPs by the present PML-N government without any audit and taking corrective measures to contain theft and improve recovery.

It is true that Pakistan needs to add new and efficient generation capacity but it will be a futile effort unless recoveries by distribution companies are improved. It is often said that major pilferers are poor, which may be high in number but the real culprits are those having access to power corridors.

Reduction of one percent pilferage can add Rs2 billion, enough to overcome circular debt. This does not require additional generation but recovery of the cost of using electricity. No one should be given a chance to use free of cost electricity.

 

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