The entire federal cabinet, led by Prime Minister Nawaz Sharif, has repeatedly claimed that load shedding would be eliminated by 2018, the year of the general elections – a commitment that, if achieved, is widely believed to brighten PML-N’s electoral prospects in an effective and meaningful manner.
To achieve this objective, the focus of the Sharif administration has been on new generation and a number of projects are expected to be completed by 2018 or soon thereafter, including 1320MW coal-fired Port Qasim power project, 3600MW LNG-fired plants in Bhiki, Balloki and Haveli Bahadar Shah, etc, 1320MW Sahiwal coal-fired plant, 969MW Neelum-Jhelum hydropower project and 1410MW Tarbela fourth extension project.
The problem however is one of inadequate capacity of our existing transmission and distribution system – a problem that was clearly and unambiguously identified by Asian Development Bank when directed by the PPP-led coalition government to undertake an audit of rental power projects, the subsequent audit report of the Auditor General of Pakistan and more recently State of Industry report issued by Nepra.
The total generation capacity is around 24000MW at present (as opposed to around 23000MW in 2011) while actual generation is considerably less due to: (i) generation companies’ obsolete equipment that disallows them from operating at capacity with some operating at as low as under 30 percent; (ii) the distribution companies operate at different capacity rates with Mepco, Pesco, Hesco and Sepco suffering considerably more system constraints than other Discos due to theft/poor bill collection rate – a major component of the intractable circular debt, and (iii) transmission network had the capacity to transmit 16000MW in late 2012, as per the then Water and Power Secretary Nargis Sethi, while the Sharif administration claims that it has increased transmission capacity to 16500MW. This capacity increase indicates that the incumbent government would have been better advised to first ensure that the then existing capacity of around 22500 to 23000MW was fully utilised – an objective that required a considerable improvement in governance as well as an initial focus on the country’s degraded transmission network.
That the Sharif administration chose to ignore the findings and subsequent recommendations of all these reports is extremely unfortunate. It has been reported that the Prime Minister, while inspecting progress of Bin Qasim power project more than a year ago, was informed by the Chinese Resident Engineer that while project completion was on schedule yet there was no network that would connect the project to electricity consumers. That situation remains relevant today and one can assume the massive economic cost on the treasury of a completed power project that is unable to supply to the consumers. Needless to add, non-use of any machinery does nonetheless require staff and maintenance costs.
It is disturbing that neither the relevant Water and Power Ministry nor the Planning Commission has raised its voice during the past nearly four years of the Sharif administration to emphasise to other members of the cabinet that the need to proactively tackle the serious issue of lack of transmission capacity should precede massive outlay on increasing the country’s generation capacity. In addition, lack of governance reforms was recently pointed out in an internal document by the KfW – a German development bank – which was leaked to the media; and strong exception taken by Khawaja Asif, the Minister for Water and Power, who demanded and received an apology though one would hope he did read the report’s findings which were based on a document released by a body under his Ministry’s administrative control.
To conclude, one must emphasise the fact that technical reports need to be read with a degree of interest instead of being allowed to gather dust and their conclusions must be used to guide annual sectoral injections by the government.