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Coronavirus
VERY HIGH
Pakistan Deaths
18,677
14024hr
Pakistan Cases
850,131
429824hr
Sindh
289,646
Punjab
314,517
Balochistan
23,016
Islamabad
77,414
KPK
122,520

ISLAMABAD: The government would be paying Rs1.5 trillion as capacity payment charges to the power producers by 2023, primarily because of the power generation contracts signed with them by the previous governments.

Speaking at the launching ceremony of documentary-drama “PaaniKay Pankh,” Prime Minister Imran Khan said whether the country uses electricity or not, the country is bound to make payment against capacity payment charges.

The prime minister revealed that the amount of capacity payment charges, which was Rs180 billion in 2013, increased to Rs500 billion in 2018 (when the present government came to power) due to new projects added by the previous government and by 2023 it would increase to Rs1.5 trillion, “even if we do not use electricity in winter, the capacity payment would have to be made and all this happened because of short-term planning and corruption”.

“The problem is that there is a huge gap in power consumption between winter and summer as power consumption from around 24,000MW in summer drops to 8,000 or 9,000MW in winter, and the country would still be making capacity payment against the entire generation, and this was happening because of short-term planning,” the premier added.

The prime minister deplored that the tendency to undertake only those projects that can be completed within a five-year cycle of election so that these could be showcased to people with a view to winning the election again caused a great damage to the country.

Instead of tapping available hydroelectricity potential and constructing water reservoirs, short-term decisions were made to produce most expensive electricity in the Sub-continent, he added.

He further stated that after 50 years, the government decided to build two new dams and hopefully Mohmand dam would be completed a bit earlier.

The prime minister said that 70,000MW a hydroelectricity potential was not utilised because after Tarbela and Mangla dams were built successive government preference was no longer the construction of new dams.

He said: “Pakistan’s industry can’t compete with India’s and Bangladesh’s, if we don’t subsidize it”.

The prime minister said that hydroelectricity was clean energy that mattered a lot for climate change as Pakistan was included in eight or nine most vulnerable countries in terms of climate change.

“Therefore, it is important for the country to produce clean energy. Water conservation is also the need of the country and with the construction of dams we will be able to conserve water as well,” he said and added that the “decade of darkness” from 2008 to 2018 destroyed all the institutions and increased the country’s indebtedness.

The prime minister also explained that Pakistan’s liabilities stood at Rs30 trillion and debt was of Rs25 trillion when the government came to power and it increased to Rs36 trillion, reflecting an increase of Rs11 trillion.

The prime minister also explained the causes of increase in the debt during the tenure of his government, and stated that out of the total Rs11 trillion increase, Rs6 trillion was borrowed for debt servicing of loans taken in the past; “depreciation of rupee against dollar for which the present government can’t be blamed contributed to the Rs11 trillion debt.”

He explained that the highest trade gap consequent to $60 billion imports and $20 billion exports as well as the current account deficit of $20 billion is responsible for the depreciation of exchange rate which has led to an addition of Rs3 trillion to the debt.

About the remaining Rs2 trillion, the prime minister said Rs800 billion was borrowed because of shortage in tax collection due to Covid-19 while some amount was borrowed for a stimulus package.

The prime minister said “the country does not need to indulge in soft image perception as was done during the Musharraf’s government of ‘enlightened moderation’ and we only need to promote self-confidence.”

The prime minister also stated that the country participated in the US’ war after 9/11, adding that the country also participated in the 1980s in the US war and glorified the Afghan Mujahideens and after 9/11 those who were promoted as Mujahideen were declared terrorists.

The prime minister said “unless we don’t pay taxes the country cannot provide education and health service to the people” and added that Pakistan is blessed with a huge potential.

“Self-confidence is required … all is required to bring about reforms in the system as old habits take time to change, there is a huge variety and diversity,” he added.

Copyright Business Recorder, 2021