Not a penny of sense between them-by Ahmad Rafay Alam

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Over the weekend, the Asian Development Bank agreed to extend the Pakistan Electricity Supply Company $242 million to “overcome its line losses in its power distribution systems.” This is part of a $810-million financing the ADB has also agreed to extend to Pakistan for a ten-year period for improvement of the efficiency, reliability and quality of electricity supply in the country.
According to the Census of Electricity Establishments 2005-2006, nearly a quarter of the electricity produced in Pakistan is wasted in “line losses” within the transmission and distribution system.Of course, all physical systems suffer loss through attrition. During the generation process nearly 4 percent of the electricity produced is lost through things like friction, noise and heat loss. This percentage is pretty much the same throughout the world. But, around the world, the average loss along the transmission and distribution network is in the 7-9 percent region. To think that 24 percent – almost a quarter of the electricity produced in this over-load-shedded country – vanishes into thin air means that criminal negligence is taking place.

If this system inefficiency could be reduced to single digits, halved even, we would more than meet the current deficit in electricity supply in the country (though in my calculations, we would simply plunge into deficit again, but that would be on account of a shortage of installed capacity against surging demand).

The Census of Electricity Establishments seems to be out of date. The articles reporting the ADB loan indicate that current line losses in the transmission and distribution system are as high as 40 percent.

Will this financing do the trick? Has PEPCO found a way of reducing line losses? Will this ADB financing achieve its stated “Project Impact” of “sustained economic growth and social development.” The answer is no. Never. Not this way. In fact, the behaviour of PEPCO and DISCOs (especially LESCO) needs to be brought to the attention of the public.

Let me set the scene.

The household sector has traditionally been the dominant consumer of electricity in Pakistan. According to the Census of Electricity Establishments, the household sector has consumed 42 to 46 percent of the electricity available in Pakistan. Commercial consumption hovered between 5.5 and 6.7 percent, while industrial and agricultural consumption remained about 30 and 11 percent.

There are also cross-subsidies in the electricity tariff system. Commercial and industrial tariffs are collected and used to cross-subsidise agricultural and household tariffs. One can see the clear policy in this. Agriculture is the backbone of the economy and rural areas are recognised as the location of most of poverty in Pakistan. It is important to provide subsidy here.

Household tariffs must be subsidised because, well, that’s where the voters are. Electricity is a public utility that is considered a right by many a night-time television viewer. It makes political sense, therefore, to keep the cost of this utility relatively cheap.

This arrangement engenders the following relationship between the subsidisee and subsidiser. Household electricity consumers consume their electricity literally at the cost of the workingmen and -women of Pakistan. The trading and industrial classes of Pakistan deserve to be singled out; for, if it weren’t for their hard work and uncanny ability to keep themselves afloat in these difficult times, the urban population of Pakistan wouldn’t enjoy its creature comforts. One’s ability to, say, watch a cooking show on TV in the evening and learn how to chop onions using a blender rather than a chef’s blade must be understood within this context.

The profits earned by the commercial and industrial classes are also what ultimately pay for a domestic consumer to live in a house that is singularly dependant on electricity. Brick and cement dominate our construction industry and house dwellers, when they get the first opportunity, buy air-conditioners in the summer and heaters in the winter because of the poor insulating and heat-retention quality of these materials.

One would expect, if not require, the Government of Pakistan to have made it mandatory for local government, development authorities and provincial governments to impose energy efficient building codes as a prerequisite for the $810-million ADB loan. In fact, according to the National Environment and National Energy Conservation Policies of 2005, the government should be committed to the goal of enforcing a building energy code.

If anyone in the ministry of environment is looking for something to do, it is this: Pakistan must immediately take steps laying out the foundations of an enforceable energy efficient building code. I stress on enforceable because what we have at the moment does not inspire confidence. One glimpse of the ENERCON’s building in Islamabad will provide proof enough of the National Energy Conservation Centre’s ability to practice what it preaches. Over the entrance, on the outside of the building, there is the exhaust of a split-unit air-conditioner, its tubes crawling along and defacing the façade of the building and into the office of, no doubt, a deserving public servant. Just the type of thing one would expect of a body that framed a rather toothless Building Energy Code of Pakistan that lies gathering dust in one of its record rooms.

What PEPCO has done accepting the ABD facility, and where the Government of Pakistan has failed the people of Pakistan, is to get Pakistan and Pakistanis into debt without really giving something back in return. This government is also ignoring the very clear words of existing policies. We need to be told why this is the case and what has been done to remedy the situation.

In June this year, the World Bank approved a $350 million loan for electricity distribution companies in Pakistan. The money is mean for, and I quote from the Bank’s Project Information Document itself, strengthening electricity distribution networks to reduce “losses and improve supply” and “to improve the system’s reliability and quality.” Just like the ADB facility. What the money is being used for is quite telling and brings the point into sharp relief.

One of the beneficiaries of the World Bank loan in Lahore is LESCO, which is looking to expand its network of 132kV grid stations in the city. It has chosen an area in the residential part of Gulberg, near a hospital and children’s school, to build something that is known to emit harmful electromagnetic radiation. It is using switching equipment that uses the incredibly harmful Sulphur Hexafluoride (SF6) gas. SF6 is the most potent greenhouse gas the IPCC evaluated in its Nobel Prize-winning report. It has a global warming potential of 22,000 times CO2. It is as if the Shehla Zia case never happened and that climate change is a doubtful proposition.

Of course, LESCO conducted an EIA of the project. A public hearing was held but the EPA Punjab issued only a “conditional” NOC. The grid station can be built, but LESCO has to go through another EIA process before it can be allowed to operate. But what is tragic about this incidence is that all the players in this transaction, from the World Bank, LESCO, the EPA Punjab, the CDGL, LDA, WASA and the Government of Punjab, thought only of the supply of electricity and not of energy efficiency. The $350-million loan should have been made only after our governments committed themselves to energy-efficient rules and sustainable building practices. Because of the failure on the part of government and government institutions, the urban elite in Gulberg get to enjoy their air-conditioners, fridges, heaters, televisions, computers and blenders at the cost of the commercial and industrial consumer, as well as the cost of load-shedding in rural areas.

The new $810-million loan is like widening a road to end traffic congestion. As is well established, this is about as smart as trying to lose weight by having your trousers taken out a couple of inches. Pakistan’s housing demographics are set to explode. Our population is booming, and in a few years there will be over 300 million of us. We owe it to the future generations to give them a more equitable Pakistan, and one that respects its resources. We need to begin thinking of energy-efficient building codes. We need to revamp the architecture syllabus, we need to introduce a guild network for building contractors and labour, we need to strengthen TEVTA to do so. We need to agree on how to measure the energy efficiency of buildings, we need to impose limits on the amount of electricity domestic consumers can use without incurring hefty penalty tariffs, and we need to do all this fast. The fact that foreign money is being obtained so that our public institutions can spend them without proper deliberation just shows that the parties involved in this entire transactions don’t have a penny’s sense between them.

The writer is an advocate of the high court and a member of the adjunct faculty at LUMS. He has an interest in urban planning. Email:

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