Impact of power crisis in Pakistan and the solution

 By Iqbal Sheikh

Seldom, if ever, employers and employees (malik aur mazdoor) agree on anything. They have come together in the face of massive load shedding in having a common nemesis – the local Water and Power Development Authority (WAPDA). This mutual suffering and sorrow has brought them together away from their history of creative antagonism, at least for now. Losing a job in a power loom shed in Faisalabad is just the beginning of a powered slide into hell.

We can now add a new fissure, of access to energy, energy haves and have-nots, to the many older fault lines in our society, the rich and poor gap, feudals and haaris status, mill owners and mill workers chasm, English speakers and the natives. Karachi has zero load shedding. Does the rest of the country deserve it? Khyber Pakhtunkhwa says we produce about twice the quantum of our load, then why are we subjected to load shedding? Sindh says we produce most of gas and Punjab produces only about 200 million cubic feet per day, why do we have to suffer gas load shedding? May be the Karachi Electric Supply Company (KESC) model is the model to follow, but today there is a KESC and the rest of us.

A friend literally heard a ‘giant sucking sound’ some months back near Hub as he looked at the power line evacuating power to KESC, referring, of course, to the 650 megawatts (MW) plus diverted to KESC. Though the political chattering class woke up to it later, the talk had been on for some time. My family and friends from Karachi on their calls and trips to Lahore studiously avoid comments on the power situation.

About 200 metres from my home, I pass by a mcmansion, which has its lights on when this entire middle class neighborhood of 1-2 kanal houses is a black hole. I guess I can keep things in perspective and explain away this discrepancy but what about the folks in rural Jacobabad and Peshawar who have the power for six hours and I have it for 16 hours on a good day, Karachi Defence has it on always. The atomisation of us does not stop at KESC versus the rest but goes down deep and cuts across all classical tax-ons with the one common thread, the poor suffering more.

At one level the deleterious impact of load shedding can be likened to that of indirect taxation whereby the poor are hit harder than the better off. The rich- the very rich, in any case, are different from you and me- suffer too, but have the resources to invest and work out of this malady. This denial of service inflicts even more drastic reduction in the poor’s ‘standard of living’ – sleeping inside the home versus sleeping in the great outdoors, on tharras, in parks and green belts swelling the ranks of the sleep deprived and the work denied. Wealth incumbency has never had better benefactors.

Denial of this survival good is apparently much worse than denial of education and health care. Lack of education, no big deal, nobody in the family went to college. Minor and major health crises- Allah ki marzi! People have been encouraged to adopt cultural ways, underpinned by pseudo-religious sanction, of reconciling to usurpation of their rights. Some charity, some anemic public services are available. There is no charity in this denial of electricity. The less they consume, the more they suffer. Hit the poor where nobody can help them. Let ‘em eat solar panels.

Consistent under investment in required generation platform has the now familiar ring of being the latest and perhaps the most potent weapon to deny opportunity, embed the inbred elitism and continue a generational transfer of wealth from the poor to the privileged in a society already plagued by lowest tax-to-gross domestic product ratio and record budget deficits. From the imaginary returns to savers, multiple wars, low direct taxation, to load shedding, the list goes on. The meek and the taxpayers shall inherit a country sucked dry and their children will carry this unbearable fiscal cross.

Unthinkingly or by design, this raft of foul policy consequences, policy surrender or inaction seems to have morphed into a social Darwinist’s dream experiment and the instruments are “starved ed and med and power sectors”. Unknown to the elite, these guinea pigs can mutate into bothersome frankensteins and their historic good behavior could not be taken for granted.

‘Demand management’ has greatly and fundamentally changed for the worse the chasm between the haves and have-nots and has now become the item ‘number one’ 1 on our social conversation agenda. People now exchange schedules of load shedding in their respective communities and even think of relocating to abroad or to Karachi. Many an entrepreneur has been wiped out as they did not/could not put up their captive generation and four hours a day, 16 percent of production loss, load shedding just killed them.

An unhealthy corollary of this unholy witches’ brew of policy consequences has been greater expansion in the parallel economy. A look at the KSE corporate results prima facie reads a good story and, except for some poor little rich fertilizer manufacturers, top lines and bottom lines of the corporations- and black sectors of the economy too- have been bulging, predictably without any appreciable impact on tax collection.

How do we cauterise this wound, before the society, as we know it, bleeds to death. The solution has to address both supply and demand side issues.

Our Manhattan Project: No matter which way you dice it, load shedding is essentially a supply side phenomenon. The system needs immediate induction of 3,000 – 4,000 MWs, or more of cheap- read coal-fired- power to tilt the balance of power from RFO to a cheaper mix. This is our Manhattan Project. If this crisis does not warrant a Manhattanesque response then God know what will. I shall not lose my sleep over the required $4 billion to $6 billion or the time, three to four years of construction period. Time, we need to manage, money is the easier bit.

Both, imported coal and indigenous coal IPPs should be pursued vigorously, whichever comes first. Presently, this scale of investment can only be provided by the government of Pakistan. If the government of Pakistan can sink close to a trillion rupees into the power sector in the last few years, why cannot they invest a few billion dollars in real present-value positive, infrastructure projects like these. When it came to crunch, the Republicans voted for TARP. No TARP, no capitalism. Market fundos overnight rechristened themselves into market socialists. It was a one night stand, so what. They got the money. The Citi was saved. They are capitalists again. If they can do it, why we cannot do, especially when nobody else will do it? We must not wait for the private sector. They are not going to show up at the party. They know somebody stole the punch bowl.

When the Manhattan Project achieves financial close- financial close shall taste different in this case- the private investors shall creep out of the woodworks and start knocking at PPIB/TCEB doors and promise more but not before the circular debt monster is slain and interred.

Induction of empowered independent boards of directors of discos and GENCOs, from the private corporate and professional sectors with full political support a la KESC shall do the trick. This reorganisation must itself be a part of a first step to privatisation. DISCOs are sterling silver just waiting for the alchemist who will turn them into gold.

Till the time these changes are implemented we shall keep doing what we are doing. If you are going through hell, we are, just keep walking.

The author can be reached at iqbalsheikh@outlook.com.

Source: Daily Times

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