Back to the Dark Ages

Selection of articles picked up from external sources by Spearhead Research Team and registered users on issues pertaining to Economy, Investment, Energy and Development

Back to the Dark Ages

Postby Spearhead Research » Thu Apr 05, 2012 12:01 pm

Image

Back to the Dark Ages

F.S. Aijazuddin

IF, to read this article, you have enough light from your back-up source — either a UPS, a generator, a solar panel, or even a torch — you belong to the new elite in Pakistan. Others less privileged must wait until the sun rises.

The power shortage that is gradually causing us to slide into the Dark Ages is not a scourge sent by God to punish us for our sins but an ungodly, manmade torment brought on by an admixture of indifference and incompetence, compounded by greed.

One is not being unfair if one names two men — Shaukat Aziz and Syed Yusuf Raza Gilani — as being specifically responsible for the crisis, for they were both prime ministers (Shaukat Aziz from August 2004 until November 2007 and Yusuf Raza Gilani since March 2008) and whether they acknowledge it or not, the nation expected them to act during those 11 years of their stewardship.

But as Ayub Khan once complained of his two governors Nawab Kalabagh and Gen Musa Khan, one refused to listen and the other failed to understand. Shaukat Aziz began well enough by resolving the impasse over Hubco but then developed an antipathy towards Wapda that went beyond implementing the World Bank’s advice to unbundle it.

No matter how persuasive the argument to the contrary, Shaukat Aziz, who was also finance minister, remained convinced that Wapda’s role had to be restricted to the management of our water resources. Energy from thermal and other alternate sources were surrendered to the private sector. It was George Orwell’s 1984 rewritten: ‘Private Sector Good; Public Sector Bad’.

Over the past 20 years, power policies have superseded each other in rapid succession. A regulatory body (Nepra) leapt into the void. Boards for investment in power projects and alternative energy beautified themselves to woo investors. Wapda itself disintegrated under the novitiate hands of Pepco into eight generation companies, a transmission company (NTDC) and 14 distribution companies. All this multiplication and division and aggregation of authority (without attendant responsibility) had predictable consequences.

They did not resolve the growing problem of power shortages; they succeeded only in perpetuating them. Nor, if one was honest, could there have been a quick fix, however sentimental one may feel about the policy that spawned the IPPs. Power generation takes time to be brought on stream. It cannot be expected to come on at the flick of a switch. It takes up to two or three years to have one’s order for machinery fulfilled. Add to that another 18 to 24 months for installation and commissioning.

If thermal plants take up to five years to gestate, dams take even longer. For example, of the major hydroelectric projects being undertaken by Wapda, the Neelum-Jhelum project (969MW) even at its accelerated pace of construction, will be ready four years from now, in 2016.

The Diamer-Bhasha Dam (4,500MW) is expected to be completed in 2018. All of the other hydroelectric projects with a capacity of over 1,000MW being considered by Wapda — such as Bunji (7,100MW), Dasau (4,320MW), Thakot, Patan & Yulbo (2,800MW apiece), Skurdo (1,600MW), Tungus (2,200MW) and Kohala (1,100MW) — are still in the feasibility stage.

In 2008, Wapda projected that it needed Rs180bn ($2bn) to complete six on-going hydropower projects that should bring 1,471MW on stream. To begin the 15 it had on its planning table which could yield 25,270MW, Wapda required (in 2008 values) $45bn.

Should Wapda be able to find that sort of loose change, it will be of little electoral value. None of those 15 projects will be ready before 2018 — the expiry of the electoral term of the next government.

No one has denied that we are a nuclear power, in which case there would be a natural assumption that we had nuclear capacity that we were using, to borrow a term favoured by our neighbours, ‘for peaceful purposes’.

Our nuclear potential is circumscribed for a variety of reasons. It is limited to the various phases of the Chashma nuclear complex, and in any case can provide at best an additional 600MW. Solar and wind power plants as a source of energy? The product of wishful thinking by those who have champagne tastes and only beer money.

This overview of each government’s oversight might explain why recent governments saw in rental power plants the value an aspirin holds for a headache. Instant relief. The intention was defensible: if you cannot buy, then rent. The rush to assuage public needs for power, however, ran parallel to the desire to oblige friends.

Commitments were made, contracts signed, generous advances disbursed. No one bothered to read the bold print, until the recent order of the Supreme Court.

To the disgruntled protester holding a smouldering tyre in his hand, the figures revealed by the Supreme Court must challenge comprehension. Seventeen projects, 2,246MW to be rented for a rental term of between three to five years at a total rental value of $3.58bn. The chief justice said it all by dictating the telling sentence: “The RPPs’ mode of generation of electricity has proved a total failure.”

Like Clive, one ‘stands astonished’ at his moderation. What is left? The Turkmenistan-Afghanistan-Pakistan pipeline? Or the Iran-Pakistan pipeline? Both projects were given formal endorsement in 1995, more than 17 years ago. Even dinosaurs did not need so long to gestate.

Will India be more neighbourly than our good neighbour Sam? Apparently so, for we are told that Prime Minister Gilani has accepted Prime Minister Manmohan Singh’s offer of 5,000MW. Terms have yet to be discussed and decided. No doubt the Indians will want to do due diligence, in particular how the government juggles its existing obligations, to its power suppliers.

The circular debt in the power sector stands at over Rs350bn. Prime Minister Gilani has ordered Rs6bn to be released immediately. Has anyone calculated how long it will take him to empty that ocean using a seashell?

*** ** ***
Spearhead Research
Expert
 
Posts: 6749
Joined: Tue Feb 12, 2008 12:36 pm

Return to Economy & Energy

Who is online

Users browsing this forum: Google [Bot] and 1 guest

cron